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Frequently Asked Questions |
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| What is the secret success of 'Smart Portfolio' ? |
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Expertise in deriving the stock’s intrinsic value, |
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Foresee the industry and economy trends |
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Control on greed and fear |
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Maintaining a well diversified and balanced portfolio. |
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| Forecast about the market ? |
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Generally, we do not predict the market movements in the very short term. Occasionally, we do provide our views on medium to long term prospects. |
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| What is 'Smart Portfolio' ? |
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Smart Portfolio is a regular feature of ‘Smart Gains’ and was started on 30-05-2001 with an initial investment amount of Rs 1.00 lakh. Objective : To beat BSE Sensitive Index and earn decent returns. Since start investment has multiplied by more than 18 times. |
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| Why the stress is provided on beating the BSE Sensex ? |
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Worldwide it has been proved time and again, that beating a well diversified portfolio consistently, is not an easy task. BSE Sensitive Index is derived from a basket of 30 stocks which are highly diversified (industry-wise). Even in our country, there are only handfuls of Mutual Funds which have beaten the indices consistently. |
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| 'Smart Portfolio' was started long back, how to benefit from it now ? |
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Any ‘Hold’ advice appearing in the newsletter is as good as a buy advice for fresh investors. Thus, a fresh investor can buy all the stocks in proportion to the weight-age assigned in 'Smart Portfolio' to beat the BSE Sensex. ‘Smart Portfolio has performed excellently well since start and has generated almost double the gains recorded by BSE Sensex and NSE Nifty. We are confident that it will continue to beat the indices in times to come. |
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| What is the basis of categorization of stocks in smart gains newsletter ? |
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Value Stock : After considering all the factors we arrive at intrinsic value (fair value). If this intrinsic value is considerably lower than the ruling stock price, then it is called a value stock. |
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Emerging Blue Chip : The company with fast rising sales, and cash flow, whose products command premium in the market, whose product has acceptability by large population. Generally they have low equity and their stock undergo considerable volatility. |
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Hot Stock : Stocks which are forming certain technical pattern at the same underlying companies are undergoing major transformation. Investors ought to bear extreme caution when investing in such stocks. |
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Growth Stock : Stocks of those companies which are expected to grow faster than the industry average. Such stocks command higher than the average P/E ratios. |
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Dark Horse : Stock going un-noticed on the bourses and is expected to beat even the stalwarts. |
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| Do You Provide a Courier Service ? |
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Yes, kindly refer 'Subscription Form' |
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| I receive Smart Gains quite late. |
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Every issue of Smart Gains is dispatched on scheduled date before 13.00 pm, in person. If possible, please indicate landmark near to your residence. |
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| How “Smart Portfolio Index” is calculated ? |
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On start date (30-05-2001) Smart Portfolio value = Rs 1.00 lacs BSE Sensex value = 3662 Smart Portfolio Index = 3662 (Equated to BSE Sensex) Today (06-12-2006) Smart Portfolio value = Rs 11.03 lacs BSE Sensex value = 13,691 Smart Portfolio Index = Initial Smart Portfolio index X (Today’s Smart Portfolio value / Initial value) = 3662 x (11.03/1.00) = 40391 An initial investment of Rs 1.00 lacs in 'Smart Portfolio' has grown to Rs 11.03 lacs as against Rs 3.82 lacs in BSE Sensex Smart Portfolio beats BSE Sensitive Index by 3.55 times ! Smart Gains is a fortnightly equity research newsletter from the house of VERC being published since 2000. VERC is an outfit, engaged in hard core equity research activities since 1989. Smart Gains contains equity calls, based on fundamental basis. Normally four to five stocks are advised in every issue along-with IPO Monitor, Recommendations Review, Smart Portfolio and occasionally we provide Market views, Industry watch, etc. |
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| I have a query about a company, to whom shall I contact ? |
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All research related queries can be addressed to anand@smartverc.com |
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| Which product I shall subscribe? |
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Visit the following link Products at a glance |
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| What is the guarantee of success of the stocks advised in services? |
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Categorically we state that ‘We do not promise or provide any guarantee for success for the advised stocks in our various services’. Yes we do claim to have expertise in valuing a stock with fairly good accuracy. We also claim to have patience and guts to start new schemes when our peers dare to even talk of the stocks. (In March ’09 ‘Smart Value Gains’ was launched with a notional sum of Rs 1 lacs and it surpassed Rs 4 lacs in just 11 months. Again in June 2009 a new scheme ‘Smart Fats Track Gains’ was launched with a notional sum of Rs 1 lacs which multiplied two times in just 10.3 months!). |
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| When to average down the cost of acquisition? |
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Bring down the cost of acquisition by buying more shares of the company you already own, if: |
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The company has almost assured bright future. |
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Ruling price is at least 20% below your average buying cost |
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The stock occupies no more than 5% portfolio weightage, and |
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The industry (to which the stock belongs) weightage is below 10% in your portfolio. |
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When to sell a stock? |
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If the stock valuations are justified |
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Had this stock not been in your portfolio, would you buy it today? If the honest answer is ‘No’, then it is time to make an exit. |
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If the stock refuses to participate in a major and prolonged rally.
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If then prospects have changed and are not favorable for the company growth.
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What is the procedure for stock selection in your various products? |
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Any key development which can change the fortunes of a company (like acquiring a big order, Budget impact, changes in raw material prices, technology tie-up, Strategic investor acquires stake, changes in industry prospects, or any other event which can have significant impact on its future prospects) is scrutinized for other fundamentals like P/E, book value, liquidity, return on equity, trend in Profit margins, Debt /Equity ratio. Satisfied with fundamentals the stock is included in ‘Smart Stocks’ list. (Presently, ‘Smart Stocks’ list has a library of 187 stocks.)
Based on our in-house developed Valuation model, ‘Fair Value’ is derived for all the stocks. This Fair Value is compared with the ruling Share price. |
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if ruling price < Fair value by at least 10% the stocks is advised in Smart Gains |
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If ruling price < Fair value by at least 25% the stock is advised in Smart Reports. |
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If ruling price < Fair value by at least 5% the stock is advised in Smart Futures & Options |
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If ruling price < Fair value by at least 5% and stock Futures are not available, then the stock is advised under Smart Chart Gains |
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Can I buy a stock if it is ruling at say 4% above or below your advised price? |
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We always look for opportunities with at least 30% returns in 12 months |
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In case we find a better stock (may be with identical risk and higher expected returns or same risk and better management etc), we replace the least preferred stock in Smart Portfolio with this new stock. |
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Since we are targeting no less than 30% returns, a variation of upto 5% will not make much difference in total returns. Moreover, this variation in aggregate will over a period of time gets reduced to almost zero. |
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Even in case of exceptional cases, a variation of 5% in a single stock (as in case of Godrej Consumer Products) can make a maximum variation of only 0.25% in total portfolio returns (assuming one has 20 stocks in portfolio). |
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Last but not the least, we are there to serve you for long-long time. Tons of opportunities will come which can make your portfolio post handsome returns, just stick to our recommendations. Large numbers of investors have benefited and we are sure your portfolio too will post handsome gains as the time passes by. |
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