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Indian markets have compounded investors' wealth with a 6.6% compound annual growth rate, surpassing the USA with 6.4% CAGR and only 3.3% by China since the year 1900. The CAGR shows real compounding which means it is adjusted for inflation and takes into consideration the currency depreciation that happens over the years. This rate of return to compound one's wealth over a century may seem lucrative but only applicable to those who show the patience to not interrupt the compounding process.
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Investing gurus like Warren Buffet and Charlie Munger have shown the importance of concentrating on long-term investments and not getting carried away by trends. Warren Buffett and Charlie Munger under performed Nasdaq Index by 155% in 1998 & 1999, the peak of the tech bubble. However, from 1992 to 2008, Berkshire Hathaway had a 14% CAGR vs the Nasdaq which made only 8% CAGR over the same period. Even our very own Big Bull, Rakesh Jhunjhunwala had amassed tremendous wealth by strategically holding onto select investments over extended periods. He acquired high-quality businesses and focused on companies with the resilience to withstand market fluctuations.