You cannot guess what happens in few years

3 min read

In this insightful analysis, we’ll examine the performance of four prominent banks over the past four years: ICICI Bank, Axis Bank, HDFC Bank, and Kotak Bank. Starting with ICICI Bank, we observe a remarkable gain of 110% since January 2020, showcasing its robust performance over this period. On the other hand, Axis Bank has registered a 50% gain, while HDFC Bank and Kotak Bank have shown relatively modest growth, with HDFC Bank at 21% and Kotak Bank at 0%.

Unforeseen Outcomes: Varied Performance

The contrasting performance of these banks highlights the unpredictable nature of the market. Despite assumptions based on legacy and branding, the actual outcomes have defied expectations. Who would have anticipated that HDFC Bank, known for its historical success, would deliver only a 21% gain over four years, while Kotak Bank would show no growth at all? Such disparities underscore the need for structured approach in selecting & investing stocks.

Structured strategies, guided by principles such as the BBC principle (Bhav Bhagwan che), offer a potent approach to navigating market uncertainties. By adhering to systematic criteria rather than relying on gut instinct, investors can identify and capitalize on emerging trends. The BBC principle facilitates the removal of underperforming stocks from one’s portfolio while nurturing investments in high-performing assets, ensuring a dynamic and resilient portfolio.

Embracing Momentum Investing

Momentum investing emerges as a powerful strategy for maximizing returns and minimizing risks in the stock market. By recognizing and capitalizing on the momentum of winning stocks, investors can harness the full potential of market trends. This approach advocates for allowing winners to thrive while promptly exiting positions in underperforming assets, thereby optimizing portfolio performance.

The key takeaway from this analysis is the importance of embracing structured strategies and momentum investing principles. Rather than relying solely on historical legacies or brand reputation, investors can benefit from a dynamic approach that prioritizes performance and growth potential.

Spotlight : The Casino Math behind Mi NNF 10

In today’s rapidly evolving world where the rate of emergence of new market leaders is at an all time high, having an agile strategy at work becomes an absolute must.

You might be good at identifying a good stock or a sector but what if it doesn’t turn out well ? What if another stock or a sector starts performing relatively better ?

Is your strategy agile enough to dump the sluggish stocks and identify new leaders ?

Below is a chart depicting the performance of all the trades that Mi NNF 10 has taken since going live on 12 Nov 2020 (till 24 Apr 2024)

Some of momentum investing’s core principles that can be evidently validated from this chart are ;

– Winners are allowed to run far while losers are discarded early. The biggest winner has clocked 285% while the biggest loser has returned (-37%). 

– 44% of the trades are loss making while 56% are winners. 

– 76% of the trades fall in this crowded zone of -20% to +20% but the stat that makes the strategy successful is that the average winner returns a healthy +39% while the average loser returns only -9%. 

– This is the casino math that has enabled the strategy to outperform its benchmark by a very healthy margin. 

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    You cannot guess what happens in few years