Are you under the impression that momentum investing is all about quick, frequent trades? Think again. Let’s debunk this myth by delving into the fascinating world of Mi NNF 10, a strategy centred around the Nifty next 50 index. Contrary to popular belief, momentum investing isn’t always short-term; it can span over two years or more, depending on how the momentum unfolds in certain stocks.
Consider the impressive trajectory of some of Mi NNF 10’s top performers. Take Zomato, for instance. From being dubbed as a mere “tomato” to soaring from Rs. 60 to Rs. 154, it’s a testament to the power of bias-free, non discretionary investing. By making unbiased decisions and sticking with winning stocks, investors can reap substantial rewards, as evidenced by Zomato’s remarkable journey.
Another compelling example is Varun Beverages. While its story dates back further, Mi NNF 10 seized the opportunity when the stock entered the Nifty next 50. Purchasing Varun Beverages at around Rs. 700 upon its index inclusion, it has since surged to nearly Rs. 1300 or Rs. 1400. Imagine if Varun Beverages had joined Mi NNF 10 earlier—the gains could have been even more substantial.
Trent is yet another intriguing case. Despite sporting a PE ratio of 120, a red flag for many investors, it climbed from Rs. 2000 to nearly Rs. 4000. This underscores the importance of not being swayed solely by valuations in momentum investing. While lower valuations may appeal to value investors, the big winners often emerge from highly valued stocks driven by momentum.
In essence, momentum investing thrives on identifying and riding the winners, regardless of conventional valuation metrics. By embracing this approach, investors can capitalize on the market’s momentum and unlock significant growth opportunities. So, if you thought momentum investing was all about fleeting gains, these examples prove otherwise. It’s about staying focused, making unbiased decisions, and letting the winners lead the way to success.
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