Sunday, 18 April 2021

2 SHARES OF AMAZON BOUGHT IN 1997 ARE NOW WORTH AN HOUSE AND MUCH MORE !!





In his annual letter to shareholders, Chairman of Amazon, Jeff Benzos shared a story of a couple who bought 2 shares of Amazon in 1997 and after a phenomenal rise of 172000% are now buying a house with selling a part of their shares. 
Note... only a part not full. 

The letter is attached herewith. 










The 2 shares grew to 24 shares after 3 splits. 


See the content of the letter. 



Jeff Benzos says 
"I am approached with similar stories all the time. I know people who've used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity - and the list goes on. I'm proud of the wealth we've created for shareowners. It's significant, and it improves their lives."
He further said "Remember that stock prices are not about the past. They are a prediction of future cash flows discounted back to the present. The stock market anticipates."



See how much they have GROWN ALONG WITH THE COMPANY. 

The couple was NOT lured by short-term profits. 
They bought it with a clear focus on LONG TERM and most importantly HELD THE SAME 
The couple admit they were attracted to book profit but reminded themselves of the LONG TERM GOAL and held on
And now they are reaping the benefit

1 share is now worth $3,400
those 24 shares are now worth $81,600which in Indian Rupees is approx Rs.61 lakhs 
Yes you read it right

Want to know the cost?
To make it simple for you to understand......I will present in Indian Rupees
Amazon came out with an IPO of $18 per share
Indian Rupee was 42.15
So, the 2 shares cost the couple Rs.758
and now in 2021, the couple (if they sell) will get Rs.61,20,000



Those 2 shares of Amazon bought in 1997 at a cost of Rs.758 is now worth Rs.61,20,000 /- 

WHAT A FASCINATING TRUE COMPOUNDING STORY. 


Investment = Rs.758
Present Value = Rs.61,20,000

a compounded return of 53.5% 
A CAGR of 53%
Yes... a return of 53% year after year COMPOUNDED !!!
Business Insider says based on the closing price of the IPO day of Amazon, the returns are 172499% 

If I round off this investment to Rs.10,000 then it will look like this

Investment = 10,000 (in 1997)
Present Value = 8,07,38,000  (in 2021) 
Yes that 10,000 investment would be worth Rs.8 crore today 


Where the Real Estate Fans?


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PLEASE NOTE :

An individual stock can boom or bust and you need to keep a constant vigil.
I would still stick out my neck and say a combo of 
Term Insurance
20% Direct Stock
80% Equity Mutual funds 
is the best way to create Super Wealth over a long period of time.

DO NOT YIELD TO TEMPTATION. 
IF IT IS FOR YOUR KIDS EDUCATION GOAL......FOR GOD'S SAKE ....HOLD IT TILL THEN. 
DO NOT SELL 



Jeff Bezos in his final letter as Amazon CEO: ‘The world wants you to be typical. Don’t let it happen’
So don't be a typical Indian Investor and put money in FD and Gold
Be different, look at Equity mutual funds
So, DON'T RETIRE RICH
Become Financially Independent and Retire SUPER WEALTHY by following WEALTHY HABITS 

All the best
Srikanth Matrubai
Author - DON'T RETIRE RICH




You are strongly encouraged to consult your financial planner before taking any decision regarding this investment. The views expressed here is the authors personal views and should not be intrepresented as a recommendation to invest/avoid.
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH
Do read the book and give your valuable feedback and request you to post positive comments on the Amazon. https://amzn.to/3cHUM6M/ You can purchase the book on amazon and flipkart Please subscribe to my TELEGRAM channel https://t.me/MutualFundWORLD/

Thursday, 15 April 2021

CORE AND SATELLITE APPROACH TO INVESTING

 

 

WIN-WIN approach to Wealth under all market conditions

 

 

The SECRET OF WEALTHY Investors is that they follow strategies and approaches which take less of their time but at the same time, give better returns than the average portfolio and one approach which the majority of Wealthy Investors swear by is the CORE AND SATELLITE approach to investing.

 

THE CORE AND SATELLITE approach is suitable for ALL TYPES OF INVESTORS and for all types of markets.

 

A poll in the Financial Times (June 2020) found that more than 2/3rd of  400 list of leading advisors have built core-satellite portfolios for their wealthy clients.

 

 

CORE AND SATELLITE approach is one of the simplest, effective, proven way to derive the best of both worlds of having a good decent all-weather portfolio and also make good returns

 

CORE & SATELLITE approach is to SPLIT your portfolio into 2 components namely the CORE part and the SATELLITE part.

 

CORE part of the portfolio focusses on LONG TERM and focus on BUILDING A STRONG FOUNDATION and making sure that nothing can shake the strength of your portfolio. CORE component tends to have Large Caps, High Dividend Yield, ETFs, REITs, and even Debt exposure.

 

SATELLITE part of the portfolio focusses on giving you that EXTRA kicker (the extra returns) and focuses on companies which could become MULTI-BAGGERs and consists more of Mid-caps, Small-caps, and even Theme/Sectors with clear-cut idea to MAXIMISE returns.

 

 

 

CORE is the bedrock and broader-based and the intent is to PROTECT

SATELLITE is more company-specific (could be theme/sector funds too) and is geared towards EXTRA returns.

 

 

CORE part of the portfolio is BORING and seldom needs your attention. CORE tends to give returns on par with Index and maybe just a bit slightly more

 

SATELLITE part of the portfolio is more geared towards the EXCITEMENT and needs constant monitoring and the investment requires constant regular monitoring.

 

 

 

Benefit of Core and satellite is

It increases the productivity ....in a sense.... you can now FOCUS on creating that EXTRA returns via the SATELLITE component of the portfolio as CORE component does not require that much energy and research

 

Of course, cost too as only the SATELLITE is being moved in and moved out whereas CORE will STAY as it's intended for long term

 

To begin with... FOCUS more towards building up the CORE part of portfolio till you get a hang of things and only later when you have sufficient knowledge.... you should look at SATELLITE and increase the same.

This applies to both Mutual funds as well as Direct Equities

 

 

The default is to have 30% in Satellite part of the portfolio and 70% in Core part of the portfolio.

 

Young investors and slightly aggressive oriented investors do tend to have 60% in Satellite and 40% in Core

 

The percentage of your exposure to Core and satellite depends on various parameters like your Risk Profile, Time Horizon which an experienced MFD/CFP would be able to do for you.

 

It’s generally the rule of thumb that the exposure to Satellite component of the portfolio is to be gradually reduced as you approach your Retirement.

 

 Do read my book  DONT RETIRE RICH and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/



The Perfect CORE & SATELLITE portfolio brings various benefits like

a) Provides adequate Diversification.

b) Stable Portfolio hugely cushioning the negative surprises.

c) Requires less time than a full-fledged regular portfolio

d) Reduces transaction cost as only the SATELLITE component is tinkered with.

e) Tax Outgo too is reduced

f) Beats Inflation

g) The right balance between Risk and Returns.

h) High Potential to outperform the Markets.

 

Core and Satellite is like having the BEST CRICKET TEAM full of Top-Quality Batsmen, Top quality bowlers and an amazing combination of All Rounders who can beat any team on any pitch on any day!

 

 

NOTE:

The SATELLITE part of the portfolio should be Complimentary to the CORE part and should make the portfolio COMPLETE in all aspects.

The idea is to PROTECT and at the same time, INCREASE RETURNS without compromising on the safety aspect.

 

 

 

 

 

To conclude the CORE & SATELLITE is an approach, ultimately to make this approach successful, you need to have the right kind of funds/stocks to compliment them and for that, you need to have someone who is EXPERIENCED enough who has successfully handled investors portfolio overall types of market cycles.

 

Hence, it’s a request to please contact a proven successful experienced MFD who has been there and done that and surely you will be on the Expressway to super Wealth Creation Road.

 

 

 

Please note that there is no such thing as the BEST WAY TO BUILD A PORTFOLIO.

Having said that CORE & SATELLITE is a proven concept and should be seriously considered for a trouble-free Wealth Creation Journey.

 

All the best in your Wealth Creation Journey and Please DON’T RETIRE RICH.
FIRE AND RETIRE WEALTHY WITH WEALTHY HABITS!

Regards,

Srikanth Matrubai

SRIKAVI WEALTH











Author : DONT RETIRE RICH





You are strongly encouraged to consult your financial planner before taking any decision regarding this investment. The views expressed here is the authors personal views and should not be intrepresented as a recommendation to invest/avoid.

Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on the Amazon. https://amzn.to/3cHUM6M/
You can purchase the book on amazon and flipkart

 Please subscribe to my TELEGRAM channel https://t.me/MutualFundWORLD/

2 SHARES OF AMAZON BOUGHT IN 1997 ARE NOW WORTH AN HOUSE AND MUCH MORE !!

In his annual letter to shareholders, Chairman of Amazon, Jeff Benzos shared a story of a couple who bought 2 shares of Amazon in 1997 and a...

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