Will India’s Growth Stocks really grow in the Long Term?
Investors generally classify stocks into two broad categories - value stocks and growth stocks. But we are of the opinion that such a classification exists only in the mind. Value and growth in our opinion, cannot be separated from each other. We believe that they are joined at the hip. However, this discussion is for another article. Here, let us assume that value and growth stocks do in fact exist.
In a fast growing economy like India, most stocks tend to be classified in the ‘growth’ category. This is especially true for stocks from sectors like auto, infrastructure, telecom, media, financial services, retailing, FMCG, pharma, and realty. Or practically almost all major sectors of the economy!
A lot of companies from these sectors are growing by leaps and bounds. Some have also made their shareholders rich in the past. But will history repeat is questionable! Will all companies from these sectors continue to grow fast in the future? Will these be able to provide good returns to their shareholders in the future?
When you look around at the huge opportunities that the Indian economy presents to companies from these sectors, you might believe that good times will definitely follow them. You might also believe that, you as an investor will end up making tidy profits from them over the long run. These beliefs are given, we think. After all, it’s normal to expect good returns from stocks if companies are growing fast.
Real rest of the article here >> What’s wrong with India’s growth stocks?
Source: EquityMaster.Com
