D.I.Y works! – Subramoney

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I posted a video ( https://www.youtube.com/watch?v=HPrgqn8spe8 ) and was wondering whether Hdfc and Reliance have outperformed Berkshire Hathaway – since 1980 (around IPO time for Hdfc and Reliance Industries).

The (obvious) pre-condition is that the student has to take into account all the dividends paid by both these companies. Using the Modigliani Miller theory, the dividends have to be converted to equity shares on the ex-dividend date (for uniformity), bonuses and split to be considered too of course.

In case of Hdfc the holders got 200 shares of Hdfc bank, 800 shares of Amc and 400 shares of Hdfc life. These have to be priced in along with the shares of Hdfc Ltd. This is a painfully long process – so only a student who wants to do a story this big should get into this. It is a longish exercise -if done honestly. If somebody wants to give a stupid answer like “I did not get the dividend paid details”, then it is not worth attempting.

On Twitter I got answers from people who do not even know about split, bonus, etc. Amusing, but a huge waste of my time dealing with these …….

Also Read on FinMedium:  The Momentum mindset | Value Investor India

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Subramoney
As a professional trainer, Subra trains a lot of people – corporate employees, promoters, non-finance managers, fund managers, entrepreneurs, life insurance agents, journalists, PR agencies, and anyone who wants to learn. His style is simple – He tells stories of real people, real experiences, and breaks down complicated topics into easy to understand lessons.
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