Majority of the small cap investors are trying to find next multibagger stock to make huge money and retire at a serene location as depicted in the picture. It makes perfect sense, after all getting 100x returns can do wonders to your personal wealth. But getting multibagger returns are easier said than done. Not only because it’s difficult to find a multibagger stock but also due to other challenges. Many stock advisory services also lack a crucial element in their approach and thus investors never receive multibagger returns even with a paid stock advisory service. At AI, we believe in making investing simpler for investors & this post is dedicated to highlight major challenges which keeps multibagger returns away from many of us. It includes a unique challenge which most stock advisory companies will shy away from telling you.
With increasing retail participation in Indian equity market, there is a strong inflow into small cap universe. Such is the impact that small caps have beaten large & mid caps, second year in a row. Most people have jumped in this narrow space to search for next multibagger stock. While it is difficult to spot a multibagger from pure data analysis, it can be little easier if you are actively taking a note of economic trends around you. At AI, we are sharing our view & personal experience on this.
Information Technology Industry has been around since 1970s when a mini computer was not really mini in size! Fast forward to 2017, a lot has changed and it will keep on changing in future as well. Such is the nature of this industry. Most of the industry leaders are not listed on Indian stock exchanges, rather they are listed on American stock exchanges. As an investor, you might be thinking how to ride such trends & possibly make most of the listed companies in Indian stock exchange? Additionally, there are visa issues & a general downtrend in all IT stocks. Allow us to explain in simpler language as we do at AI. It’s a little longer article, so we are publishing it on weekend. Happy reading!
We have heard of averaging down a stock in case it’s price falls significantly below the initial buying price but do you average up your stock? If not, AI strongly recommends you to do it for your top bets.
Averaging up a stock is buying more shares in case stock price moves significantly above initial buying price.
As human beings, we are driven by emotions and tend to bother too much about stocks that are in loss as compared to the once which are in profit. It’s a very normal behavior for all of us but do we know exactly when to average down or average up? Mostly, its driven by our feeling of the day & amount of money in hand rather than based on solid logic. In this article, we will try to understand the benefits of averaging up which is specially important for long term small cap investors.
2017, has been a good year for Indian stock market so far and sensex has already crossed mount 30k. It has been the same story for most emerging markets across the world. We saw good gains in rural, real estate & FMGC sectors while automobiles, pharma & IT remained sluggish.
The big question in everyone’s mind is how far this rally is going to continue & what sectors to invest now.
This is a key question in every small cap investor’s mind. How to identify a multibagger early & hold on for outsized returns? It’s easier said than done!
But AI believes, it can be done if we learn how to evaluate a small cap stock with a robust & ever-evolving process. The key characteristics to look out in a small cap stock is quite different from large caps. We, at AI, have an applied process in place to identify next multibaggers. With it, we are sure that we are gonna hit bull’s eye more than often.
Below are key pillars of our process while searching for a multibagger. Of course, you can outsource this to us by subscribing to our service (click here) but we also encourage our readers to slowly ingrain the concepts of small cap investing. It will be very good on a long run & you will know what you are heading towards.