Recently I read an excellent article from Prof. Sanjay Bakshi that appeared in Outlook Business. In this article he writes about the reasons for paying up for quality business like Nestle India. From 1981 to till date this stock returned 32% per annum. At this rate of compounding Rs 1,000 invested in this stock would have become Rs 54,67,538.72 after 31 years. Your initial investment got multiplied by 5467 times. But there is one problem. Most of us would have sold the stock after it doubled or tripled in value. We sell our winners too early. In March 2000 the NASDAQ Composite index hit a peak of 5048.62. In Oct 2002 ... (full story)