Advantage in lagging behind

Many ask me how one can grab a multi-bagger stock. There are many ways. But there is one neat way of doing it and it is relatively easy. Everyone knows that India lags behind many countries in terms of how we do business. And we all know that US, some of the European countries and Japan are well developed nations (I write here only about the business aspect). This is where the investor has the advantage. The well developed nations had good communication infrastructure even before 2000 when India was in the early stages of adopting latest communication technologies and the foreign companies involved in this business had multi-billion dollar market capitalization. We had our Bharti Televentures that owns Airtel brand listed in Indian Stock Market in the year of 2002 at a price of 45 and it's price went down even to 35 levels. Now it is trading at 350+ levels. So in a span of 3 1/2 years, the stock of Bharti Televentures has become a 10 bagger. How did this happen? The logic is simple. India was less penetrated market for mobile telephony and there was a huge scope for development. And Bharti Televentures was the only private company listed in the stock exchanges and they had good management. Well, it is easy to say now they had good management and a great vision. But the investor has to do the research only in this aspect - the quality of the management and the quality of the major shareholders. Once the investor is convinced of the company's management and its major shareholders, then he can put his money into that company's shares and forget about it till the communication market is nearing the stage of maturity. As everyone watches the market, in the next few years, Bharti Televentures would become 20 bagger for those who invested in this stock in 2002.

Bharti Televentures is not the only company to illustrate this point. Pantaloon Retail is another and it is even more a success in terms of capital appreciation. This company was trading at around 20 in the year of 2001. In the bull run that we saw recently, this touched 2000 levels and now it is trading at 1700+ levels. As one can understand, it is almost a 100 bagger. So what does Pantaloon Retail do? They are into organised retailing of food, clothings, consumer durables and many such things. And we have the good example of Walmart and other big retailing companies in well developed nations to find out the potential of this industry.

Now, I think one can agree there is an advantage in lagging behind. :) BTW, it is not the investors who are lagging behind. Rather, it is the nation or some part of the economy lagging behind and the potential that is left unexplored. One can also correct the mistakes that the leaders made earlier. Having said that, I would also agree there is a great advantage being the first-mover.

Well, the point is made. But what are the sectors that have huge potential in the future here in India?
1. Supply Chain Management [Food Processing is one among that. But there are also other processes that will get organised]. The companies that are directly involved in this business aren't the only ones who will be benefitted. There are also associated industries that will benefit a lot. If supply chain management has to be successful, the infrastructure for transport and communication should be well developed. I think one can understand the related industries that would be involved here. I would write more about some of those industries later.
2. Organised House Rentals by corporates. One can also think of organised house brokers as an industry. Well, broker is a generic word. One can image the effect of all those brokers getting organised based on their industry.
3. Organised Car Rentals
4. Organised film industry where the films would be produced by corporates

I've just given some examples. There can be many one can think of and each would have their own potential.