Commonly used investment options are:
Historically, the Indian share market with compound returns of about 15% per annum has outperformed all other investments. Warren Buffett, one of the richest persons in the world has created wealth through shares.
IPOs are not as safe as perceived by investors. Before going public, companies are not required for as many disclosures as post IPO. Many a time, it has been observed that certain company policies changed post-IPO like Dividend payout, etc.
"It's almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller (company insiders) to a less-knowledgeable buyer (investors)." - Warren Buffett
Whenever we buy some aticle we always compare the 'Price' we pay and the 'Value' we get, consciously or sub-consciously.
When an investor buys a stock he hardly compares the current price with its worth (Value). The worth of the stock is known by various names like Fair Value / Real Value / True Value / Intrinsic Value. Without knowing the Fair Value it is extremely difficult for an investor to have strong confidence and develop a conviction.
Mathematically, 'Fair Value’ is the sum total of all future receivables from the company suitably discounted at current prices. Even a small error in predicting the lifespan of the company or its growth rate or the discount rate used can make a big error in arriving at Fair Value.
Often investors use standalone PE ratio, or compare the stock PE with Industry PE or look for high a dividend yield, which is not the correct way. Apart from past performance, one needs to consider the future prospects, quality of management, promoter stake, etc. Thus finding worth is a combination of quantitative and qualitative tools.
We at Smart VERC use different techniques for Growth and Value stocks. PEG (Price Earnings to Growth ratio) works very well for the Growth stocks and has proved a very effective valuation technique. While for Value stocks there is no single parameter, every stock needs to be dealt with differently. At the core of the core what we are looking for in this fast-changing world is 'If I acquire a stake in your company, when will my money get doubled?'
Overall, the valuation part is not as difficult as made to be. It comes through experience and a better connection with the subconscious mind. To compare with, it is like driving a car which for outsiders looks very simple but if you ask a driver to explain, he may find it very difficult even to tell you at what rpm he changes the gear from second to thord!
Day Trading: In Day trading the buying and selling transactions are closed within the same trading day. Ask yourself what specialty you have that market should reward you against millions of investors fighting to earn returns in a short period. Investors should avoid it. It creates excitement, insomnia for many investors. Hardly anyone has created long term wealth via Day-trading. Highly risky!
These stock derivatives can be used for Hedging as well as Speculation. Hedging is safer, while Speculation has a very high degree of uncertainties and could be a risky proposition.
Warren Buffett describes Derivatives as “financial weapons of mass destruction”.
Ability to find ‘Fair Value’ with fairly good accuracy, big enough stomach to digest emotional upheavals, patience and efficiently managing a portfolio.
|Book name||Publisher||Writer||Price (approx.)|
|One Up On Wall Street||Simon And Schuster||Peter Lynch, John Rothchild||Rs 400|
|Beating the street||Simon And Schuster||Peter Lynch, John Rothchild||Rs 400|
|The Little Book of Valuation: How to value a company ...||Wiley India Pvt Ltd.||Aswath Damodaran||Rs 350|
|It's When You Sell That Counts||McGraw-Hill||Donal L. Cassidy||Rs 600|
|The Winning Investment Habits Of Warren Buffett & George Soros||Truman Talley Books||Mark Tier||Rs 1800|
Many people dream of striking rich, by playing the share market. To make this castle-in-the-sky a reality, one needs to be much disciplined. Heeding to tips from brokerage firms or hot stocks from free advisors can break you very fast. If someone is promising the moon and stars (unbelievably high returns), be cagey, be wary of shady business practices.
Remember: Honest investment advisors will never make ridiculous claims. Anybody claiming to get you astronomically high returns should be watched with suspicion.
Look for the qualification, track record, understanding of a business, and experience of the advisor. Ask your advisor how many crashes he has seen and what actions he recommended to his clients in those moments.
Building long-term wealth under the guidance of a good investment advisor is very easy. Be ready to pay advisory fees of about 2% to 3% if he is able to get you 20% plus long term returns.
Finding a good advisor is more difficult than finding a good stock.
Smart Billionaire Picks (part of Smart Gains) started on 30 May 2001 has gained @26.38% per annum.
Success is attributed to:-
We follow the bottoms-up approach. First the Company fundamentals, then the Industry and last the Economy. Occasionally, we do provide our views on the macro and micro parameters of the economy. In the long term, primarily it is the company fundamentals that will decide the share price, the market has a very little role.
Worldwide it has been proved time and again, that beating a well-diversified large company portfolio consistently and year after year, is almost impossible. BSE Sensitive a broad-based index is derived from a basket of 30 stocks which are highly diversified (industry-wise) and mostly industry leaders. To our knowledge there is no Mutual Fund or any entity which has out-performed the BSE Sensex for more than 10 years in a row.
We are proud to share that Smart Billionaire Picks (SBP, a part of our advisory product 'Smart Gains') started on 30 May 2001 has outperformed 76.74% of the time and delivered 26.91% compound returns compared to 14.33% from BSE Sensitive Index during the same period.
Any stock that is a part of ‘Smart Billionaire Picks’ is a good buy at the current price. Those who wish to follow can replicate in proportion to the weights assigned. Since the start on 30 May 2001, the aggregate returns of these picks is almost double the BSE Sensex returns on a CAGR basis.
This collection of stocks is only for demonstration purposes. It should not be construed as a solicitation to buy or sell any stock. It can be very useful for those who wish to learn how to diversify in terms of weightages, sectors, Groups etc, how to Add / Hold / Exit from stocks and respond to changing market conditions. Advice is based solely on the valuation of the stock, with no bearing on past price behavior. As a policy we always remain fully invested, hence Cash not indicated which is always an insignificant amount, but captured in ‘Total’.
For more about SBP Click here,
Visit the page Products at a glance.
Advised stocks have a reasonably good margin of safety in terms of the difference between the advised price and the intrinsic worth of the stock.
Still, there are chances of volatile stock returns:-
Thus there is no guarantee of returns, but long term track record indicates a very high success rate and rate of returns.
Categorically, we state that ‘We do not promise or provide any guarantee for success for the advised stocks in any of our 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 Fast Track Gains’ was launched with a notional sum of Rs 1 lacs which multiplied two times in just 10.3 months.)
Investors may consider buying more shares of the company, if:
For the stocks advised by us, investors can exit If the stock price reaches Target or hits Stop Loss or we advise you to exit.
For the stocks not advised by us, investors can check for the following:-
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, change of CEO, 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 our ‘Watch List’. As and when the stock price recedes below ‘Fair Value’ by at least 20%, the stock is advised for various services suiting Risk-Return profile and investment horizon.
For more visit the page Investment Philosophy
Since the start of the journey on 31 May 2001, it has delivered fabulous returns. CAGR during this long journey stands tall at 27%. This basket has seen many ups and downs, the dotcom bust, several scams, elections and many more major events. Interestingly, all the time it remains fully invested. Changes are made only on Wednesday morning around 10 am. Those who are ready to invest for long-duration (minimum 5 years) with average risk-return profile may follow it with matching individual stock weightages.
It is strictly prohibited. This is a single-user subscription. The system will automatically block access if there are attempts for multiple/parallel logins. Also, we may terminate your subscription to all the services without any refund for the remaining subscription.
At times confirmation emails are delayed because of technical issues. Rest assured your money is safe. We have integrated one of the safest payment gateways. Drop us an email at firstname.lastname@example.org or call +91-9131361959 and we will look into it.
Once you subscribe, the Invoice can be accessed from the Dashboard after log-in.
No, subscriptions are non-refundable.
The total returns from stocks is dictated by the total portfolio returns which in turn depends on the weightages assigned to individual stocks. To keep the investments diversified (to mitigate the stock specific risk) investors are advised to invest in line with the 'Weightage' assigned in the product subscribed.
Investors are strictly advised not to borrow money for investment in stocks under any circumstance.
One complete business cycle which lasts for about 4 to 5 years can be considered the as long term.
To get rewards of compounding one should invest for multiple cycles. Often investors invest for much lesser periods and get trapped in down-cycles despite the company under consideration having sound fundamentals.
You may kindly write to email@example.com or send Whatsapp message at 9755920780
This is a model basket of stocks to demonstrate and educate investors about the importance of weightages, diversification in terms of market capitalisation, industry and business groups and last but not the least the way to generate better returns by picking fundamentally sound stocks and waiting patiently for the opportunity to exit or add more.
Both the schemes are well suited for long term investors. Smart Freedom Stocks is more suited for lumpsum investments, while Smart SIP is appropriate for regular monthly investment.
Pick of the Week
One stock is advised with a complete research report. Based on the individual profile, investors should select the stock as per applicable parameters like risk, expected returns, holding period, etc. The complete report is available in PDF format on website dashboard area. Also, regular reviews are available. This part is useful for medium term investors willing to invest between 3 to 24 months.
Past advice up to 24 months is also accessible.
On the date of the publication, you will be notified in brief about this pick via WhatsApp Message, Email, and Mobile App notifications
Smart Billionaire Picks (SBP)
Select picks from the 'Pick of the Week' are included in this basket of stocks. This feature is useful for long term investors. Started on 30 May 2001 with Rs 1 Lac the basket has already crossed Rs 1 crore and is growing at a CAGR of 26% plus.
SBP offers a good way to learn and practice to manage stocks in terms of Risk appetite, Weightage, Diversification, etc. Changes are made only on @Wednesday before 11 am. WhatsApp messages will be delivered only if our contact number (9755920780) is saved in your contact list. In case you are not receiving notifications, please contact us.
Date of Publication: No fixed date. 12 to 15 stocks are advised in a year as and when the opportunity arises.
On the date of the publication, notification is sent via Mobile App, Email, and WhatsApp, WhatsApp messages will be delivered only if our number (9755920780) is saved in your contact list. In case you are not receiving notifications, please contact us. Sell notifications are also sent if the stock hits the Target, or Stop Loss or expiry of Holding period or any other reason.
Research reports are available in the Dashboard area on the website.
The latest issue cannot be Saved / Downloaded / Printed. All previous issues can be printed and saved.
In all advisory products the subscribers have an access to the past advice and the period varies from product to product with a minimum period of 24 months for 'Smart Gains'.
Smart Gains has two sections-
If any stock advised under 'Pick of the Week' reaches Target then investors should exit the stock. If the same stock is also present in SBP and investor is ready to hold for the long term, then he can follow the advice under SBPIt is possible that the stock may be advised to sell in 'Pick of the Week' but we may remain invested in SBP for the same stock, due to good long term outlook.
It is also possible that we may exit the stock from SBP but remain invested in 'Pick of the Week'.
In all our advisory services we furnish weightage/allocation.For example: If we provide a weightage of say 4% for a particular stock, and suppose your portfolio size is Rs 10 lacs, then your investment in that stock should be 4% of Rs 10 lacs i.e. Rs 40,000/-
The investment amount may vary from person to person depending on -
As a thumb rule, one should have an investment (percent) of about (100 - Age). For example, a person with an age of 35 years should have an investment of about 65% of the total corpus (Real estate, Gold, Stocks, etc) invested in the stock market (including direct stocks and Mutual Funds).
Fresh investors must start small and raise the investment steadily once he/she gets accustomed to the stock market volatility.
His command over managing Stocks in a portfolio is par excellent.
You have accomplished my long search for good investment advisor.
I have observed that your Recommendations have always been correct. I have been benefited tremendously by your recommendations. Keep it up.
By far the smartest investment advisor I have come across.
Congratulations on 18 years of Smart Gains. Following for more than 13 years now and still keep a lookout for it every Wednesday morning.
I had attended your Workshop and found very effective in your investing strategies. Impressed by your humbleness and strong conviction in your philosophy. You are a true blessing for investors.
I'm in association with Mr. AK Asnani - Smart VERC for just over three years & have been benefited a lot from Value investing mindset by attending 2 seminars & 1 workshop in Ahmedabad.
I am glad to share that after attending a seminar titled 'How to Dance with fear' I learned how to overcome fear in a simple and highly practical way.
Feeling blessed to have come in your contact and proud to have you on my side.
There was a time I felt that the stock market is not my cup of tea. But after meeting with you, the scenario has changed. Thanks for encouragement.