Consistency is the key in Stock Market too

Feb 28, 2018

Stock Market loves consistency of a company. For example, Titan Company gained 6 times in profit from 2008 but price has gained 16 times.

But a question has arisen seeing few data on screener. EPS has not risen. Net cash flow has risen manifold . Reserve is also very high compared to 2008. Net cash flow rise is very high.

If you see small increase in profit of a company over years then you can expect far more rise in stock price over years to come. This is better for smaller companies. Well established companies like HUL many not give this much return. Because smaller company can grow faster. Smaller and newer companies has low trust at first so it can be available on cheaper valuation.
Challenge is to find companies which can grow consistently over many years. This can give you multi-bagger return at very low risk in stock market. Here if you see if a company is rising 20% per year then you can think that your gain will be far better after few years of consistent growth.

Consistency is the key.


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