I have no clue why many investors – including some pundits – look at only the price of a share. When I talk of multi baggers like Supreme Industries (most people may not know about this Wealth creator par excellence) they only talk about the share price.

What you should be actually looking is ‘what would have happened if you had invested all the dividends back into the same share” . This is called the TOTAL RETURN INDEX.

When you look at Supreme, Colgate, PnG see what would have happened if you had used the dividends to buy more shares of the same company. If you did that even Noida toll bridge can look like a multi bagger soon – if the company continues to be priced here – but with a huge dividend payout. Of course given its parentage I doubt whether Noida will make money for its shareholder on a long term basis – but just giving an example. A wrong one perhaps.

I am sure that the MOTILAL OSWAL Wealth study can be done differently – using the dividends for using the money to buy more shares of the same company. I have no clue why they ignore dividends – I can only guess – it takes more effort. Our psus will ALWAYS look like value destroyers – because all of them have huge payouts. Take the case of Nhpc and Ntpc for example – both these are good yield shares and for the people who bought it at the original price – I mean the IPO price the dividend yields are close to double digits. That is almost like a fixed deposit with some capital appreciation too. It is sad that all these ‘wealth’ studies call NTPC a wealth destroyer. Re-work your returns and the answer will be different.

The Sensex of 1979 which started at 100 – could be at about 40,000 at the least if you took the dividends to be reinvested from 1979 to 2017. The sensex (most indices in the world) ignores dividends even though it does price in the splits and bonuses.

I wish for the following 2 …

a) TRI since 1979, after all dividend details can be got from companies

b) Wealth studies considering dividends