The citizens of Ukraine will never forget the date of 26th April 1986. Almost 32 years ago, at midnight, the Chernobyl Nuclear Power Reactor had exploded due to a faulty devised experiment. As per the reports, the power regulatory systems were shut down and the graphite rods were withdrawn from the core by the untrained personnel. Such blunders worsened the situation and magnified the impact of chain reactions that were occurring inside the reactor.
Image: In The Presence of Humans | Source: DailyMail
Consequently, the reactor exploded with a thrust of around 350 Hiroshima bombs and released a substantial amount of radioactive rays in the environment. It was established as one of the worst industrial disasters in the history. Following the accident, in the next few days, lakhs of people were evacuated and the adjoining areas (around 2500 sq. km.) were abandoned.
It’s been three decades now and a lot of surprising things have happened since then.
32 years ago, since the day the humans were forced to abandon the place, Nature started reclaiming its territory. The place of destruction soon began to be a diversified land of flora and fauna. When the humans were removed, Chernobyl started offering a wide array of habitat to a range of wildlife species.
At present, this place is a home to Pine Forest, Wet Grasslands, Lakes, Deers, Boars, Birds, Termites, Red & Grey Wolves and abandoned houses.
Image: In The Absence of Humans | Source: ArchDaily
When Left Untouched, the aftermaths of the devastation turned out to be extraordinary. When Left Untouched, the devastated city regenerated itself post the apocalypse. When Left Untouched by the humans, the wealth of Nature (flora and fauna) started to prosper.
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This strategy is equally influential when we talk about the outcomes of our investments. The process of wealth building is purely a pursuit of controlling our temperament to act. The moment we learn to master our irrational behavior and emotions, the odds of achieving remarkable returns start flipping more in our favor. By being a little more patient, we can leverage one of our best competitive advantages (patience) and accomplish the results that we often desire to achieve. By ignoring the frivolous noise from the mainstream media, we can improve our outcomes by manifolds.
When left untouched, our investments ride on a compounding engine that runs with multi-years of thrust and compounds the money like nobody else.
Consider the case of Hero MotoCorp. Limited, the ONE Thing that shaped the investing career of Mr. Raamdeo Agarwal. What used to be a micro-cap company of few hundred crores in 1995, became a mammoth with a market cap of Rs.63000 Crore in 2018. His vision to foresee that people would shift from scooter to motorcycle rewarded him handsomely.
Since the day he invested in 1995, he chose not to touch his investments even during the choppy rides. During the dot-com bubble, when people were selling their houses to buy technology stocks, Hero Motocorp didn’t move an inch. But this didn’t deter him from staying invested for the next 20 years. When left untouched, his initial investment of Rs.10 Lakh kept filling his kitty with a consistent inflow of dividends worth Crores.
Image: Hero MotoCorp. (2008 – 2018) | Data Source: Investing.com
When left untouched, not only Hero Motocorp, numerous other companies too turned around the wealth of their stockholders and made them fabulously rich. Maruti Suzuki, Tata Consultancy Services, Infosys, Wipro, and Piramal Enterprises are few of them.
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When I look around, I observe that most of us are biased towards playing a short-term game. We can’t think beyond a few quarters. With a little turbulence in the market, our irrational behavior takes the lead and makes us do what needs to be avoided. With an insufficient temperament to resist inactivity, we feel forced to touch our portfolios and sell what needs to be held. We don’t even realize that our own patience, when bundled with a long-term approach, is one of the single biggest moats we possess. It’s the key to the treasure trove.
The blueprint to accumulate a huge wealth lies in the fact that maximum returns are achieved when our highly convicted ideas are left untouched. As per the book The Thoughtful Investor by Basant Maheshwari, Asian Paints has given a handsome CAGR return of around 29% during the period 1984-2013. This implies that over a period of 29 years, an investment of Rs.10,000 would have been worth Rs.1.61 Crore.
But these returns never came in a linear fashion. One had to go through many dry spells of zero and negative returns in order to enjoy the handsome returns.
After all, when left untouched for decades, we have the power to turn our money from a Pawn to the Queen of Chess.
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You’ll also love reading: Story of a Small and Midcap Investor
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The cover image has been taken from Life Spectator
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