Value = Cost + (Cost X Gain/Loss%) Stock market is a bust place post Covid19. Many new investors […]
It been tough for equity investors. Market has tanked. Impact is more aggravated at individual stock levels. This is in sharp contrast to 2016 or 2017, where money was easily made over free sms tips or television news channels. Unfortunately, this is the true face of stock market which will keep on popping up at regular intervals. You need a strategy to tackle it otherwise all your gains made during bull years will vanish in thin air. If you don’t have enough time or expertise, it is a wise decision to buy a professional subscription.
Once you decide to approach a professional help, the issue arises in choosing the right stock advisor. If you search on google, you will find tons of websites claiming to be the number one. This further adds confusion. In this article, we discuss a checklist which should be considered before buying subscription of a stock advisory service.
“Money is sowed during bear phase and harvested during bull phase”
Ongoing correction has opened up rare opportunities for wealth creation by 2022. We invite you to join our premier wealth creation service by clicking here.
During our conversation with clients, we were surprised to learn that most of them had no clue about FIFO (First In First Out) rule which is applicable on all demat accounts as per IT Ruling Section 25(2A). If you are looking for selling some portion of your shares (lets say 100 out of 200 shares) then FIFO rule can impact your average purchase price for remaining shares. Let’s try to understand where it applies and how it can be used to our advantage as well.
Title of this post may surprise you but once you finish reading, you will understand my point of view. On AI post, this time we thought to write something which not only benefits us financially but also physically. As my father once said “Better to run on tracks than later run towards hospital”. I am sure most investors or traders are glued to computer screens ignoring health concerns & pushing themselves to the limit. It is not a good habit and may hamper your investment success as well. If you are one of them, then this article is dedicated to you my friend.
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How often we wish to have a magical formula which can be used to find next multibagger. Well, you are in luck as legendary investor Joel Greenblatt has a magic formula for multibagger returns. This formula was backtested on S&P 500 and guess what, it gave an average yearly return of 30% and beat S&P 500 96% of the times. This formula was developed for US stock market and keeping in mind US accounting pratices & taxation laws at that point in time. While many mutual fund houses & researchers use this magic formula to filter stocks from Indian stock market, they seldom publish these results openly in public forums.
At AI Post, we are committed to bring best of investment knowledge to our Ace readers free of cost. No need to pay for training institutes 🙂 In this article, we apply Joel Greenblatt’s magic formula on Indian small cap stocks to see which stocks are worthy of this filter at current market prices.
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In tennis, the word “unforced error” is described as a missed shot that is entirely a result of the player’s own blunder and has nothing to do with opposition’s skill. Mostly the player with lesser committed unforced errors wins the game. In investing also, if we can minimize unforced errors, the chances of getting multibagger return shoots up.
World of small cap investment is full of risks & rewards, but at times investors tend to go overboard & increase their risk unnecessarily. Blindly taking more risk does not increase return, in fact it’s detrimental to your wealth. In this article, we will figure out the most common mistakes which many small cap investors commit. We believe if a small cap investor can manage “unforced errors”, there is no stopping of his wealth multiplication.
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If you are a long term investor then ongoing correction is more of an opportunity rather than disaster. Currently, we are in a phase where there are plentiful opportunities. If you have the right process & patience then in the next couple of years, some of these small caps will touch a new high and in the process shatter previous all time high records. Coming back to process, we can take a clue from legendary investment gurus and apply their investment process to unearth such hidden gems.
@ AI post, we are writing a series of posts in which we publish stock watchlist of famous investors by applying their filters on Indian small cap stocks. Last week, we had Benjamin Graham (click here to read) and today we have Warren Buffet. We are keeping the language simple and contents precise.
“Be fearful when others are greedy and greedy when others are fearful” – Warren Buffet
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Smallcaps have fallen like a pack of cards. Correction has been severe but much awaited after sharp rally over the last couple of years. This correction has also opened up many exciting opportunities. This is the time when ace investor will buy promising smallcap stocks to enjoy multibagger returns in 2022-23.
We have seen a full cycle within smallcaps. This cycle gets repeated every 5-6 years. Last time it happened around 2012-13 and ace investors enjoyed returns few years later. However, mastering this is not easy since in every cycle, multibagger stock name will change. Today’s multibagger may not necessarily survive this correction. So, key to superlative gains is to wisely choose next set of multibagger stocks.
@ AI post, we are writing a series of posts in which we will publish a stock watchlist of famous investors. It may be wise to analyse what legends will buy in today’s market post correction. This list is curated by us based on their principles. More than stock list, there is a lot of learning as we touch upon investment principles of these legends.
We want everyone to understand the concepts and since we know that people don’t have more than 5 minutes of attention span, so we are keeping the language simple and contents precise. For the purpose of this study, we are running filters only on smallcaps, so midcap & largecap are not considered. True to our ace reader’s interest!
Today, we have Benjamin Graham. Next week will be his disciple Warren Buffet.
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Keeping up the tradition, we continue to post different varieties of topics under AI Post. Today, we are publishing investment story of one of our subscribers. He wants to keep his name confidential but agreed to share his investment experience with us. There are plenty of lessons in his story and I am sure at some point of time, all of us have committed to same mistakes during early days of our investment journey. Without wasting more time, over to him.
Most of the readers of AI Post are either young or middle-aged people, who are tech savvy and use smartphones extensively. If you are one the them, today’s article is dedicated to you.
We all know that inflation is the biggest enemy which we face in our financial life. Interstingly, inflation can be different for different sectors. For example in telecom, instead of inflation, it is deflation as call rates keeps on dropping. For groceries, it is in the range of 6-8% for last 20 years. Do you know the worst of them? It is not one but two. It is Medical Inflation (14% annual) & Education Inflation (10% annual). In some ways, they are related as well (we will explain it later). The problem is that no one can escape medical inflation as our human bodies are bound to grow old and catch diseases. The question is not “if” it will happen but “when” it will happen. You are ace reader of AI Post, you should be prepared and not caught unaware.
In this article, we will discuss trends in medical inflation, role of private insurers and medical colleges, and how badly it can impact us in future. Of course we have a solution as well and it is not just buying insurance. We are stock advisor and not insurance advisor, but we continue to encourage our readers for their overall well-being even if it is not linked to our core business activity.
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We wish our readers a great 2018, full of wealth & WISDOM
As 2017 comes to an end, investors are reviewing their portfolios to re-adjust. Some are searching for new stock ideas and media is obliging them by dishing out top stocks for 2018 like candy machines. While this makes a good readership/viewership, it is not beneficial for you. On the other hand, the smart investors are taking a little timeout and re-visiting concepts to improve and mature as an investor. This is the only recipe to ensure repeated success in 2018 and rest of the years to come.
In this article, we bring you our best AI posts of year 2017 along with commentaries (must read) which explains what makes them rank so high. You might have missed them earlier due to busy schedules or simply because of joining late, however better late than never. We will also briefly touch upon our stock recommendations for year 2018 🙂 So please spare some free time to read through this AI post, it is gonna take some time but it is worth while.
Is it possible to create an investment which pays me for lifelong & beyond? This is a question every investor must have asked himself at some point in time. What if you are told that it is very much possible. There is solid mathematical certainty behind it. Last 30 years of market statistics are also supporting us. You can create such investment & enjoy lifelong earnings. The best part, you can even pass this to future generations as your legacy.
Next question will be why it is not known till date? Well, everyone who has a basic understanding of equities, knows but not realizes because of certain predispositions of financial industry. I highly encourage you to read this article entirely. This can be one of the life changing articles, you will ever come across on Internet.
To achieve high returns from a well diversified portfolio, shall I invest in lot of stocks to find some multibaggers or shall I restrict to fewer stocks. We are sure this question must have come to your mind when you started investment in equities. In the famous report published by J. Evans and S.H. Archer in 1968, they advised to have 20 to 30 stocks. While a recent study released in 2014 by Vitali Alexeev and Francis Tapon, advises 90 to 110 stocks. There are no right or wrong answers and researchers are divided between 20 stocks to 200 stocks. We at AI, believe that it entirely depends upon your investment style & preference but even then, there are certain rules to follow. Let’s find out in detail.
“One who does not know, does not know that he does not know”
Socrates | 400 Before Christ, Athens
With the surge in return from equities, there is a barrage of new investors who have abandoned real estate or other forms of investment and diverted their money into equities. Most of these investors are first timers and they believe that free hot tips from what’sapp or other informal sources can make them wealthy. Alarmingly, most of them are investing big in “Unknown” small cap stocks by relying on these informal sources. Some have made profit and some have made loss, but the relentless rally in small cap means no one has lost hope. Last year around this time, a friend of mine asked my opinion about a hot tip stock “High Ground Enterprises” which was hitting upper circuit every now & then.
This is a follow-up post from our guest author Suyash as the grand saga of ‘cryptocurrency boom’ is unfolding before us. Bitcoin and other similar cryptocurrencies are in lot of news these days due to recent ban from China. Suyash, being a keen follower, has some more insights on the latest developments.
PS: For understanding basics of cryptocurrencies like Bitcoin, please read the earlier article – Understanding Bitcoin bit by bit
Over to Suyash!!
The battle between central banks and cryptocurrencies has begun. China recently banned Initial Coin Offerings (ICOs) from introducing new cryptocurrency tokens in China market. There are also indications that China plans to ban cryptocurrency exchanges. In contrast, other central banks & governments (including RBI) are taking a different line. In this article, we will try to make sense of these moves and how it impacts cryptocurrencies.
Averaging up a stock is an excellent strategy for gaining greater returns (in monetary sense) on already performing stocks. After all, if you own a stock which has gone up 50%, there is a temptation to invest more if future looks promising. While this line of thinking is perfectly fine but its execution has to be carefully planned. If this is not planned carefully, it takes just one lower circuit to put you back in loss. In this article, we will give an example with a real stock (Can Fin Homes) and also we will advise the best possible strategy to average up carefully.
During 1990s, stock market was considered as a rich man’s investment option & common man was staying out of whimsical world of “share bazaar”. It was often believed that share investment is similar to gamble & good people should stay away from it. Scams like Harshad Mehta & UTI 64 only consolidated that belief. However, things have changed since last decade & domestic participation has gathered pace in last 3 years. However, the question remains if it will continue in future & how much it can impact Nifty in coming years? Let’s try to find out.
Bitcoin is the new buzz word in market & this article aims to educate our readers about cryptocurrencies and their basic ways of working. This post is written by our guest writer Suyash Sathe and we are thankful to him for taking time out of his busy schedule while working for a singapore based american investment bank. He is a value investor who made his first investment at an early age of 16. Over to him!
Everyone invest in small cap stocks for getting multibagger returns. Interestingly, many stocks achieve great returns in due course of time but alas we sell them too early. We can have the best of research process backing us but at the end, it all boils down to how much actual profit we are making. The question remains unknown to most investors as in how much time shall one wait before booking complete profit. In this article, we will try to analyse a recent multibagger stock’s journey ‘Avanti Feeds’ and understand why it is tough to achieve multibagger returns & how to overcome them.
There has been flash flood of money into the equities in last couple of years and this snowball is becoming bigger & bigger as it rolls down the hill. Falling interest rates have only pushed normal person to suddenly discover his risk appetite and start pouring money from bank deposit to stock market. While domestic participation is the best thing that can happen to any country’s stock market but are these new joiners well prepared before taking a plunge into the risky world of equities? The side effects of neglecting the risks associated with equities are huge. Let’s try to find out what all should be covered using Maslow’s theory as a parallel.