We all have read that forwarded mail, right? The one about how Wipro made some gazillion bucks for you over the years? Some of us thought about it, many of us dismissed it as a freak case. I probably fell into both categories. But periodically, that image does crop up in the mind. According to that forwarded mail, 100 shares in Wipro some 30+ years ago would now have grown into some obscene quantity like 96L shares which, at today’s prices, would be worth over 500cr. To this we got to add some 100+ cr worth of dividends that the company paid over the past 30 years and the figure becomes even more mind boggling.
This is often quoted as an example of how wealth building is possible in the market. Every word of it is true. But how many such shareholders of Wipro have you met? I have spent 37 years in the market and I haven’t yet met anyone who said I am one of those. Imagine, I could have done this- had I had 10000 to invest in 1980- I was already in the market then! Unfortunately didn’t have that kind of money. Not many people did. Because 10000 bucks was a bloody fortune in those times- you could probably have bought a flat for that price in some suburb then! You would think that by now, at least one person would have come forward to say that his dad or granddad was one such soorma of the market! I cant believe the vanity of man will not permit him to take such credit when it is on offer. The fact that no one has come forward could well mean that this exercise of astronomical return is a theoretical one.
But then, money can always be got- if you are determined to get it somehow. What cannot be got, however, is foresight and patience. Who had the foresight that Wipro would actually give out all those bonuses (I counted 10 instances of them) and do two stock splits (100 to 10 to 1 paid up)? Who could have foreseen that they would get more dividend income than about 25% of the listed stock’s market caps? It sounds incredibly good to hear these kind of stories. I ask you this- can Wipro do something like this again? I would wager that most of us would say No. But why not? Because it seems too outlandish to us to make that kind of forecast today! Now think back to 1980- if someone told you that 20-30 years from back then the stock would give you more money than you could ever imagine, would you have believed that person? I doubt it very much.
So its really the patience that gets the reward. But is it only in investing? Is it not also true for trading? Just go back and examine your trades. If you had been patient with your stock, would you not have ended that trade in a profit? Of course this assumes that you picked the trade well- just as you would have to pick your investment well. After all, in 1980 for eg you could also have bought W.G Forge or Ramacast or MP Poly or some such. They were as poorly or as well- known as Wipro was! They are nowhere to be found now. The key element therefore is patience. And for developing patience in a trade one also needs education, a change in the mindset, a methodical approach, a good knowledge of what one is doing etc.
No one is born with patience as a virtue, I am sure. It is a developed trait. Let’ s all learn to cultivate it-for our own betterment. I don’t dispute the fact that the Wipro story is true. But I totally reject the possibility that someone can have the kind of patience; I reject that anyone will have that kind of foresight; I reject that anybody today will be able to withstand the barrage of newsflow from TV channels and websites. Hence I reject totally the possibility that the kind of returns that Wipro has theoretically given is possible to be reproduced in real time.