Hello viewers, welcome to Info Thirst. Today, we are going to discuss the Coffee Can Investing. Before we get into the topic we would like you to Follow us by clicking the follow button. Now that you have done that...So let's dive into it…
So about three or four decades ago in the USA. In west a bunch of people happen to purchase physical shares of companies and to save them from moisture and rotten put them in 10 coffee cans. Eventually by the time, they all forgot about it, did not see it and 10 years later when they found these coffee cans and took out those shells. They realize the value of the stocks had grown exponentially and ended up making them on very well. Between 1984 - 1986 this gentleman in the USA called. Mr. Robert Dobie then coined the term coffee can investing, which is basically investment strategy by which you buy shares and then you forget about them. Essentially, you are invested in stocks for the long term, which is for a minimum of 10 years.
Now, a lot of people in India, tend to track the performance of stocks in those companies only after buying the shares, and then their influence on whether to sell or buy more is bases on everyday price movement, which is not really the best strategy to be investing in stocks. You need to be invested in the long term for 10 years. So how do you select these talks that are essentially three criteria given to be selecting stocks for your coffee can investing portfolio. The first one, these companies should have a market cap of over a hundred crore rupees. Second they should have a return on Capital employed of minimum, 15 percent per annum over the past 10 years. The third, Revenue growth annually should be minimum of 10%. If you're talking about financial companies, which giveaway loan, their book should be growing at a rate of 15 percent annually for the past 10 years.
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