Money is made when you fool Mr Market

As I have noted many a times earlier, Mr Market is right most of the time, but not all the times. An investor makes a lot of money when he bets that the market is wrong and later it proves to be wrong. Let me take two examples here:

1. Blue Star in 2001. The company's average share price in 2001 was around INR 35. In the next 7 years, i.e. between 2002-2008, the company gave away dividends worth INR 96.5. Any retail investor who bought 1000 shares of Blue Star @ INR 35, would have got INR 96.5K as dividends in the next 7 years and today those INR 35K would be worth 750K (The company announced 5:1 split in 2006). In 2001 itself, company was giving away INR 5.5 as dividends, i.e. yield at INR 35 would have been 16%. Mr Market avoids companies with such a high dividend yield since it fears the company will cut the dividend or will go bust. Mr Market turned out to be wrong in this case.

2. CRISIL in 2001. The company's average share price in 2001 was around INR 100. In the next 7 years, i.e. between 2002-2008, the company gave away dividends worth INR 124. Any investor who bought 100 Shares of CRISIL got INR 12.4K as dividends in the next 7 years and his INR 10K would be worth 235K today.

Can I see these kind of opportunities today in Indian Stock Market? Have a look at the top dividend yields page on Moneycontrol.