Wed Sep 25 03:30:19 UTC 2024: ## Forget ‘The Next HDFC Bank’: Multibaggers are a Myth, Says Veteran Investor
**Mumbai, India** – Veteran investor and author, [Name of the author] of First Global, debunks the popular myth of predicting multibagger stocks. In a recent article, he cautions investors against chasing “the next HDFC Bank or Amazon” with the promise of a 25-year hold.
The author uses his own experience as an example, recalling the “Strong Buy” rating he assigned to Amazon in 2001 at $0.75 per share, a decision met with skepticism from Wall Street. Similarly, he highlights HDFC Bank’s initial public offering in 1996, where his firm predicted its potential for growth.
While these calls were based on strong analysis and business insights, the author emphasizes the impossibility of predicting long-term stock performance. Even industry giants like Jeff Bezos and Aditya Puri couldn’t have foreseen the exponential growth of their companies.
“The truth is that no one can know beforehand which stocks in a portfolio become multibaggers,” he writes. He further points out that even renowned investors like Rakesh Jhunjhunwala and Warren Buffett have acknowledged that only a small fraction of their portfolios contribute to exceptional returns.
The author advocates for a diversified approach, suggesting a portfolio of 25-30 stocks across sectors. While acknowledging the possibility of some “dud” investments, he emphasizes that a well-researched and diversified strategy can potentially yield a few multibaggers, offsetting the losses from underperforming stocks.
“Life is about probabilities,” he concludes, urging investors to avoid the “survivorship bias” that focuses solely on successful investments while overlooking the many that failed. Instead, he advises focusing on building a strong portfolio with a diverse range of stocks, accepting that some will underperform while others will outperform.
First Piper 