We use the fundamental research approach to carefully identify businesses which are fundamentally strong, have a long operating history and have bright prospects to grow in the future.
Read more about our investment philosophy here.
What will you receive as part of the portfolio recommendation service?
- Stock recommendations (buy/sell) with a detailed research report for each investment.
- Risks to monitor in each of the stock investment.
- Suggested model portfolio with recommended position sizing ie how much money to put in which stock.
- Updates on each of the businesses/companies held in the model portfolio.
Who is this service for?
- You are a DIY (Do-it-Yourself) investor
- You are looking for help on stock research
- You want to take your own stock investment decisions, but also want to seek professional stock recommendations.
- You realize that it is not practically possible to research all the companies listed on the stock exchanges by yourself
- You want to pick the best stock investment ideas that other professional investors have already researched in-depth.
Fees for the Portfolio Recommendation Service
Rs 18,000/- per year
FAQ = Frequently Asked Questions
- How many stocks will the model portfolio consist of?
The model portfolio will typically consist of 8 to 10 carefully chosen investments.
The purpose is to diversify, but not so much that our portfolio starts looking like a mutual fund portfolio. We will not make big money on our 20th best idea.
At the same time, concentrating only in two or three companies may turn out to be risky because there are always unknown risks that businesses face.
- How many stocks will you recommend every month?
We will be using the value investing approach to identify favourable opportunities to invest in. Our purpose is to make money in the markets and not buy/sell stocks. Once we have chosen good companies to invest in, our job is to monitor the portfolio well and not necessarily buy into new companies.
Depending on the opportunities that the market presents us, after we buy our initial set of companies, one may expect to find a new investment say once in three months. In most cases, it will make sense to put more money in companies that we have already invested in.
- What returns can I expect?
Please check out the audited performance of the model portfolio.
You can expect to make a return of twice the nominal GDP (ie GDP growth + inflation) ie around 15% CAGR returns over a 3 to 5 year period.
- Typical Investment – Case Study
You may read about one of our portfolio companies – AIA Engineering a stock we are holding for the last 4 years
AIA Engineering is a debt-free company with a differentiated product and very healthy profits. Today, it supplies to more than 120 countries in the world and keeps growing steadily. It is the largest company in the world in its field of operation viz high-chrome grinding media.
- How is investing in equities different from investing in other asset classes (fixed deposit, gold, real estate)?
Unlike other classes (fixed deposit, gold, real estate), returns in equity are never linear. The returns from the equity markets are always lumpy – sometimes up and other time down. Thus, when stocks are down, we don’t know whether the stock price is down because we made an investment mistake or it is just a temporary price movement.
This is exactly what makes equity investing difficult for most people.
And this is exactly the reason why one can make far more returns in stock markets than in other asset classes – fixed deposits, gold & real estate.
- What will you not get?
I only do fundamental research.
I do not use technical research, futures & options or intra-day trading.
I know a lot of people who have made a lot of money in stock markets using all kinds of investing strategies – option selling, currency trading, commodity trading etc.
However, in my experience, fundamental long-term investing is far more safe way of investing in the markets. We want to make a lot of money in the markets, but do not want to expose ourselves to completely unnecessary/avoidable risks.
So, you will not get
- Buy today, sell tomorrow ideas
- No technical research
- Futures & Options
- Some of the stocks I bought on recommendation have fallen; what should I do?
Investing is a game of probability and patience. We must expect returns to be lumpy, sometimes down, other times up. If some of our portfolio stocks have fallen from our purchase price, we will re-evaluate the risks to the business. In such a scenario, we have to be sure of our research.
If the company is still fundamentally strong and the business is growing, adding more customers, launching new profitable products, entering new geographies (Eg Dmart finally entering Delhi market) we will continue to hold the stock.
- How will I make money if some of my stocks have fallen?
Imagine that you invest Rs 100 in a portfolio of 10 stocks – Rs 10 in each stock.
Suppose after 5 years, 8 companies go bankrupt, their stock price goes to zero and you lose 100% of your investment in these companies.
Stock price 2 of the 10 companies increases by 10 times after 5 years.
Your original portfolio increases to Rs 200. Your annualized returns is 15% CAGR – not a bad performance.
This means with a success rate of only 2/10, we have still made a annualized returns of 15% over a five year period.
What does this example tell us?
It is important to make money on the overall portfolio, not on every stock that we invest in.
Equity investing is a very forgiving business, even after losing money in several stocks, we will make overall money if we identify a few good companies.