The Buffett Way
But Then You Will Never Ever Have To Worry About Money.
Dear Friend,
Life doesn't seem fair.
For some people, a stock market crash - as we saw for the most of 2008 and early 2009 - means taking just a small hit on the standard of living. At most, it means less of eating out, traveling to less expensive foreign locations, and buying less expensive clothes and accessories at luxury stores.
But then for some, it means working extra years to make up for the lost funds that were set apart for child's education or self-retirement. It could even mean working on a second job to earn back the money lost in a stock market crash.
You know some people have so much money that they do not have to worry about it. They are free to choose how they spend their entire lifetime, even if their investments crash.
Maybe you are one of them, too.
But if you're not quite there yet, mark our words - we are about to show you a way to 'safely' create tremendous wealth over the next few years so that you will never ever have to worry about money.
In fact, over the next few minutes, we are going to unravel in front of you a simple, yet foolproof investment strategy that has made millionaires out of several small investors.
We will also tell you about the man - Warren Buffett - who has propounded and practiced this very strategy...
...to multiply his wealth a whopping 3,400 times over a 44-year period!
In short, we will explain to you an investment strategy that would have turned an investment of Rs 10,000 invested in 1964 to a whopping Rs 3.4 crore at the end of 2008.
Or for that matter...
If you are wondering what this money could have bought you, read this...Rs 20,000 into Rs 6.8 crore, or... Rs 50,000 into Rs 17 crore, or then... Rs 700,000 into Rs 238 crore!
While we explain to you this investment strategy that has multiplied money 3,400 times over a 44-year period, you will also understand how you can practice it to generate tremendous returns on stocks over the next few years.
- Rs 6.8 crore could've bought a fleet of 11 Mercedes S-class for you to have started a luxury car rental business
- Rs 17 crore could've bought you a plush 5-bedroom apartment in South Mumbai!
- And then...Rs 238 crore could've bought you a private luxury jet today!
Let us introduce...
. . .Just Like Warren Buffett, The Greatest Investor Of All Time
Let's face it. There are literally thousands of people out there around the world and in India trying to invest just like Warren Buffett. But only a few are actually getting Buffett-like results.
See, it's no wonder why so many people want to emulate Buffett by investing like him. After all, this legendary investor is, without doubt, the greatest stock market investor of all-time and has consistently generated stupendous returns for a very long period of time...
...like multiplying his investment in stocks such as -
Yes, these returns are real! In fact, we will soon show you how Buffett has achieved this.Washington Post - 81 times in 36 years, or... Coca-Cola - 15 times in 21 years, or for that matter... Gillette - 9 times in 14 years
But before that, let us reveal to you...
To Invest Like Warren Buffett
As we proceed, here’s a question for you.
Assume that a stock that you bought a week back when you thought it to be a safe and sure bet, falls by 20% on a single day.
Suppose that the stock we are talking about here is Infosys, India’s second largest and most respected IT services company.
If you were holding Infosys on 10th April 2003, were you disturbed seeing the company’s stock price crash 37% over a matter of the next two days?
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Assume for once that you knew that this company i.e., Infosys sold something that was going to revolutionise how companies operate globally. You also knew that it was managed by competent and visionary people, and had a consistent track record of growth - that is, until it missed brokers' quarterly earnings estimates by a few rupees in April 2003 and got pounded down by 27% in a single day, and 37% over two.
What did you do?
You might've sold this stock and cursed yourself for buying it in the first place.
Or then, you might've sat tight and done nothing until you recovered your loss...and then sold.
Nevertheless, if your answer is that you studied and reconfirmed your assessment of Infosys...then bought more of the stock as it crashed, you must be happy to know that you have grown your money nearly 7 times over the succeeding 6 years.
Buffett says, "Take advantage of the market's temporary insanity to load up on quality stocks at bargain prices." And if you held on to Infosys as it crashed, you would have done just that - taken advantage of the market's temporary insanity to load up on a quality stock at a bargain price.
See, it is this very strategy that has not only helped Buffett become the second-richest man in America with a net worth of US$ 37 billion, but has also made him the most watched - and copied - investor across the world.
Now, if you wish to invest the way Buffett did to create his huge wealth...
'The Value Investor'
. . . And Build A Stock Portfolio That Will Multiply Your Wealth
Several Times Over The Next 5 to 10 Years!
'The Value Investor' is a new offering from Equitymaster.
Reduced to its essence, our mission through this service will be to identify 12-15 stocks over the next 2 years by following Warren Buffett's time-tested investing principles.
Through 'The Value Investor', we will help you identify companies, which will see their stock prices multiply 4 to 6 times over the next 5 to 10 years.
As Buffett has done, 'The Value Investor' will help you achieve such returns by identifying businesses...
These are some of the critical parameters that Buffett gives weight to while identifying his stocks...and our process through 'The Value Investor' is not going to be any different.
- With strong fundamentals: Simple and understandable businesses, having consistent operating history and favourable long-term prospects.
- With strong management teams at the helm: Rational, candid with shareholders, resisting the compulsion to act just to prove a point.
- With stable financial history: Stability in high profit margins and return on equity, sustained growth in earnings, less capital requirements on an incremental basis, low or nil debt on the books.
- Selling at attractive valuations: Keeping a strong margin of safety, available at a significant discount to their intrinsic values.
Simply put, we will be identifying companies that are doing simple businesses that can be easily understood, have consistent earnings history and sustainable growth path, are managed by honest and competent people, and whose stocks are available at attractive prices with an adequate margin of safety.
After all, Buffett has made his entire fortune - US$ 37 bn at last count - following these very principles of investing.
And he's achieved tremendous success with not one, not two, but several stocks that have multiplied several times over a number of years.
Like his investment in Coca-Cola, where every 100 dollars he invested in 1988 now stands at nearly 1,500 dollars...or simply put, an investment that has multiplied 15 times in around 21 years! See this...
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Among other reasons, the key factor that prompted Buffett to buy Coca-Cola (as he later clarified) was that he believed in the simplicity and sustainability of its business.
See, it's not so easy identifying simple and sustainable businesses like Coca-Cola, but then this is what we will be striving to do for you through 'The Value Investor'. After all, we have done this in the past as we'll soon show you.
But before that...
You know, the 15 times return on Coca-Cola is just among the lesser returns that Buffett has made over the years. Washington Post, the newspaper company that he started acquiring in 1973, has till date multiplied his money a whopping 81 times! And this is keeping out the significant dividends that the company has paid out over these years.
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As per the reasoning he later offered, Buffett bought Washington Post simply because the company, apart from doing good business, was selling at a much lower price than its true business value.
'The Value Investor' will emulate Buffett's mantra of buying stocks when they are selling cheap as compared to their true worth.
Another of Buffett's investments that turned extremely successful was 'Gillette', the shaving products major. Buffett's simple reasoning to buy Gillette can be summed up in his own words - "I go to sleep in peace every night realising that every morning when I wake up, millions of men will wake up with me and shave."
Not to mention that Buffett multiplied his investment in Gillette almost 9 times in 14 years.
That Can Multiply Your Wealth Several Times
Over The Next Five To Ten Years?
See, these examples of Coca-Cola, Washington Post, and Gillette validate the basic tenet of Buffett's strategy - invest in companies you believe will provide long-term investment value, rather than investing in fads or 'hot' themes that may be profitable in the short run, but are likely to run out of steam in the long run.
In a very similar way, the core of 'The Value Investor' will be to identify a portfolio of a few 'such' stocks for you that will multiply your money several times over the next ten years.
Let us make it even clearer....
To help you make your investment decision, wouldn't you want to see it through the eyes of Buffett?
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"Success in investing doesn't correlate with I.Q. once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing." - Warren Buffett
"There seems to be some perverse human characteristic that likes to make easy things difficult." - Warren Buffett |
Now, you obviously can't call him up to get his advice. But you can be a part of the 'The Value Investor'.
No second-guessing, no listening to vague advice, and no more worrying about whether you're making the right decision.
In short, 'The Value Investor' will be the 'next best thing' to asking Buffett himself if you are making a good investment decision.
Yes, it will be really that simple!
Also, with 'The Value Investor' on your side, YOU WILL NEVER HAVE TO...
'The Value Investor' will take all the guesswork out of investing.
- Wonder 'which' is the right stock to buy for the long term and 'when' the right time to buy it is - We will do it for you.
- Dissect financial statements of endless number of companies - We will do it for you.
- Read endless annual reports - We will do it for you.
- Listen to the contradicting stock gurus on TV - With Buffett on your side, you can switch off these other 'gurus'.
- Sweat over the slightest price moves your stock undergoes - Now that will come with your practice of this process.
But how could this be? How could something so simple produce such phenomenal results?
See, we fully agree to what you must be thinking right now.
Believing and following any principle, even if it is proven and simple, calls for absolute faith in it. And we do not expect you to believe us without getting fully convinced about our claims.
In fact, you must be itching to ask us many questions.
Like...
Your Question # 1. "How will you identify those above-average stocks?"
Answer: Simply put, if the company is doing well and is managed by smart, honest and visionary people, eventually its stock price will reflect its inherent value. As you will come to know over the next few months, we will devote most of our attention not in tracking share prices, but in analyzing the economics of businesses, while also assessing their managements.
See, our answer is not plucked out of thin air. In fact, in the past, we have identified above average stocks for our subscribers ...and that is what brings us the greatest happiness.
By advising the 'right' kind of stocks, following the 'right' kind of investment principles, we have seen our subscribers multiply their money several times over the past few years.
Take for example Titan, which we had recommended in July 2003. We asked ourselves - what could be a simpler business than selling watches and jewellery? And we had a difficult time answering this question. Apart from its simple business, we also believed that Titan had all the qualities to become a wonderful business over the long run. The stock was also trading cheap then, with its price being just around 0.4 times its sales per share.
Our conviction paid off...and till date, Titan has multiplied almost 19 times since that recommendation.
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Now consider Voltas, a stock that we first recommended in June 2003. The stock was then trading at just around 0.3 times the company's annual sales per share despite the company having all the ingredients of becoming a robust growth story in the future.
After restructuring its business, Voltas has not looked back and those who acted on our recommendation then have multiplied their money almost 20 times till-date.
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Then look at the automaker M&M, which we had first recommended in April 2003. Now this was a company under trouble when we had recommended it. But our belief in it was based on the turnaround of the company's tractor business that had seen sales decline for the five years preceding our recommendation. We also expected tremendous value creation from the company, especially from its IT subsidiary - Mahindra-British Telecom (MBT, which later became Tech Mahindra).
Investors who acted on this recommendation then have multiplied their money around 16 times till-date.
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See, these companies - Voltas, Titan, and M&M - were all simple businesses when we had identified them six years back. And these stocks were then trading at very attractive valuations compared to what we had thought were their true business values.
Over the years, these stocks have generated huge returns for investors who bought them then, and have had the patience to hold on to them over the years.
There are similar other examples that we can talk about...like Tata Power, which has multiplied around 12 times since our recommendation of January 2003...
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...or for that matter, Thermax, which has also risen around 13 times since our May 2003 report...
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Your Question # 2. "How many stocks in total will you identify for me?"
Answer: We will apply Buffett's investing principles to focus our attention on just a few companies. And how many will be a few?
Even the world's best investors have discovered that, on an average, just fifteen stocks give your portfolio enough diversification. For you, a legitimate case can be made for ten to twenty.
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...given that we will be searching for the right kind of opportunity available at the right price, there might be times when we would have nothing to recommend.
But similarly, there will be times when given the market's mood, as we saw for the whole of 2008, we will find several opportunities to recommend to you. We will then recommend stocks in a bunch. |
Similarly, there will be times when given the market's mood, as we saw for the whole of 2008, we will find several opportunities to recommend to you. We will then recommend stocks in a bunch.
Within the next two years however, you can expect to receive from us 12-15 recommendations that will complete your 'Value Investor' portfolio.
Your Question # 3. "How much allocation do I make towards each of your recommendations?"
Answer: It will be advisable that each investment you make you should have the courage and the conviction to have at least 6% to 10% of your portfolio in that stock.
Only such a concentration will enable these stocks to have a really meaningful impact on your portfolio.
Your Question # 4. "How long must I hold those stocks?"
Answer: There will be no hard and fast rule. While selling a stock from the portfolio for taking advantage of a better opportunity is advisable, as a general rule of thumb, the idea will be to hold the stocks for somewhere between five to ten years.
"Why Should I Do This?"
Okay, let us put it the other way - what could be the opportunity loss for you for not practicing 'The Value Investor' strategy and otherwise following the herd?
See this chart...
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The above chart depicts the increase in book value per share of Buffett's company Berkshire Hathaway vis-ŕ-vis the performance of S&P 500 during the period 1964 to 2008.
While the S&P 500 multiplied by around 42 times during this period, Berkshire's book value multiplied 3,400 times!
Simply put, it's a difference between turning every Rs 100 to:
See, by talking about these kinds of comparisons, we do not wish to lead you to believe that these returns can be achieved by you by following Buffett's investing style.Rs 4,258 (S&P 500), or... Rs 340,163 (Berkshire).
In fact, in this modern age, it simply isn't possible to beat the market as Buffett has done so successfully over his life.
So we do not want to promise you the moon (...this one's really invincible!)
However, what we will promise you is that by being part of 'The Value Investor', you will generate tremendous wealth for yourself over the next few years...
...by becoming an integral part of the process that aims to emulate Buffett's investing principles and take advantage of the wealth-generating opportunities that are available here in India.
"How Capable Is Equitymaster To Do
What Buffett Has Done?"
You know, many investors in the US have become wealthier by...
Not only retail investors, there are several fund managers in the US who do exactly this.
- One, buying what Buffett buys, and/or
- Two, investing in the stock of Buffett's holding company Berkshire Hathaway.
But then copying Buffett's investments in India isn't possible for the fact that Buffett hasn't bought any Indian stock (simply because markets here aren't deep enough to stomach the size of stock purchases he can make in the US).
Second, you cannot really buy a Berkshire stock sitting here in India to benefit directly from Buffett's investing philosophy.
So how do we plan to help you earn Buffett-like returns sitting here in India advising Indian stocks? And do we have the pedigree to do that?
We appreciate your questions.
To say the least, our philosophy all these years has been to recommend stocks that pass the strict evaluation tests as practiced by the best investors in the world - from Benjamin Graham, Peter Lynch, and John Templeton, to of course Warren Buffett.
And we have done this with immense success for our subscribers...and that is what brings us the greatest happiness.
By advising the 'right' kind of stocks, following the 'right' kind of investment principles, we have seen our subscribers multiply their money -
See, we will be fooling ourselves if we tell you that we have been 100% right in all our recommendations all these years...we have had our share of mistakes...
- 20 times in Voltas over a period of 6 years;
- 19 times in Titan Industries over a period of 6 years;
- 16 times in M&M over a period of 6.2 years;
- 13 times in Thermax over a period of 6.2 years;
- 12 times in Tata Power over a period of around 6.7 years.
...but most of the times our subscribers have benefited enormously from our recommendations...all those who have believed in our long term philosophy of viewing companies and recommending stocks of only the worthy ones.
In fact, over 80% of all our buy and hold recommendations since 2003 have met their targets within the recommended time periods.
And all these years of precious experience is now what we bring to you by focusing on the learnings of Warren Buffett, one of the great investing gurus we have talked about and have followed intensely.
We are so confident of these principles that we'd also invest some of our own money in the stocks we recommend to you through 'The Value Investor'.
Yes, you read that right. We will be investing Rs 100,000 in every stock that we recommend to you through 'The Value Investor'. And just so that you have an advantage, we will be buying the stock 10 trading sessions after we recommend it.
In short, we'll be on the same side as you.
'The Value Investor' is your (and also our) chance to practice sound investing principles and generate tremendous returns over the next few years...just like Buffett has done.
To Immediately Start Investing Like Buffett!
You won't believe how simple the process we follow in the 'The Value Investor' will be until you try it.
Not only will this service help you step-by-step in building a portfolio of 12-15 stocks that pass the strictest of Buffett's investing principles, you will also discover through our monthly newsletters...
| √ | How to identify the right kind of businesses to invest in. Apart from telling you specifically which stocks to buy, we will also reveal to you the key success mantras of a business even if we do not recommend that stock because of reasons like valuations. |
| √ | How to know the right price you should pay for a business. We will ensure that you never again pay too much for a stock. This benefit alone is worth thousands and thousands of rupees. If you take nothing else away from 'The Value Investor', please make sure you learn how to follow this crucial valuation method. |
| √ | How to keep you protected from the most severe of bear markets and economic slowdowns. You will discover Buffett's secrets of making your portfolio recession-proof. |
| √ | When to sell your investment. The decision to sell a stock shouldn't be based on vague opinions, but real hard facts. 'The Value Investor' will tell you precisely when a stock should be sold. |
As we have mentioned above, you will find all these investing gems through our monthly letters, which will also talk about -
| √ | Exciting investment ideas we will be pursuing. |
| √ | Excerpts of our interaction with companies' managements, suppliers, competitors, and customers. |
We will also be there to solicit any questions you might have on our choice of stocks and the rationale we give for such a choice.
| "It's bad to go to bed at night thinking about the price of a stock. We think about the value and company results; the stock market is there to serve you, not instruct you." - Warren Buffett |
After all, you will be following hard, time-tested rules of successful, profitable investing.
See, 'The Value Investor' isn't another 976-page Buffett biography (as 'Snowball' was) or an academic examination of his investments. This is a systematic process to actually invest like Warren Buffett.
Of Learning, Disciplined Investing And Ultimate Wealth Creation
When you subscribe to 'The Value Investor', you will not be simply buying a service...you will participate in a journey of learning the art of value investing, disciplining yourself to be different from the herd...and creating tremendous wealth for yourself and your family.
And we must tell you one very important fact...
...at the end of the subscription period, you will own a lifelong treasure...in the form of the reports we send you, the discussions we have, and the portfolio of stocks we recommend to you.
We promise you that we will be candid in our reporting to you through our monthly reports. As Buffett would have promised, our guideline is to tell you the facts that we would want to know if our positions were reversed.
For All Market Conditions
We're totally convinced that this is the single best investment strategy for all market conditions. And our results are there for you to see.
Finally, be aware that you have our special guarantee of satisfaction. 'The Value Investor', unlike other investment advisory services, will provide you with specific and actionable advice on stocks.
You will know exactly what to buy, and at what price. All of the details you will need will be provided to you. And you will also receive our monthly updates.
At An Attractive Invitation Price
The price is immaterial at this point. Because you can try 'The Value Investor' FREE to see if you like it...till 30th November 2009 (we release our first report on 2nd November). If you vote thumbs down anytime during this period, we'll return every rupee you paid (minus a 10% refund fee), and you can keep everything you've received up until that point. Simply notify us by 30th November 2009.
So what do you say? If you are ready to try the simplest and easiest way to generate tremendous wealth you'll ever find... take us up on this no-risk offer today.
By signing up till October 31st 2009, you're going to get a wonderful discount on your subscription!
While the 'The Value Investor' is priced Rs 10,000 for a 1-year subscription, you can subscribe before October 31st 2009 and get enrolled for the service at a special price of just Rs 9,000... a straight 10% discount.
Or let us make you an even better offer...
Instead of 1-year, what if you subscribe to 'The Value Investor' for 2-years? Well, you can then avail of a huge 40% discount on the rack rate of Rs 20,000 for a 2-year subscription.
Simply put, you can avail of a 2-year subscription to 'The Value Investor' at just Rs 12,000!
And wait, that's not all!
When you sign on to 'The Value Investor', you will also receive FREE...
1. Security Analysis - Sixth Edition
Also known as the Bible of value investing, Security Analysis by Benjamin Graham and David Dodd has now completed 75 years since its first publication way back in 1934.
Here is what Warren Buffett has written in the foreword for this edition of this magnum opus -
"There are four books in my overflowing library that I particularly treasure, each of them written more than 50 years ago. All, though, would still be of enormous value to me if I were to read them today for the first time; their wisdom endures though their pages fade. Two of those books are first editions of The Wealth of Nations (1776), by Adam Smith, and The Intelligent Investor (1949), by Benjamin Graham. A third is an original copy of the book you hold in your hands, Graham and Dodd's Security Analysis...Together, the book and the men changed my life."
This book, which includes a CD version of the Second edition of Security Analysis, usually costs Rs 795/-. (Your copy will reach you within 7 days of your signing up for The Value Investor)
But if you subscribe to 'The Value Investor' before October 31st 2009, you can grab the 'Security Analysis' absolutely FREE.
Wait, here's more!
2. Special Report - 3 Sectors For Long Term Investors
As you subscribe to 'The Value Investor', you will also be eligible to receive our free research report - "3 Sectors For Long Term Investors". This is a macro report that we have prepared exclusively for you, and will discuss the three sectors that are likely to provide some wonderful investment opportunities for the next 10 years.
This report will be a valuable resource for you in your search for some brilliant investment themes.
You can get this report absolutely FREE as you subscribe to the 'The Value Investor'.
But wait, here's more!
3. Equitymaster Stockmarket Yearbook 2010 (CD Version)
When you subscribe to 'The Value Investor', you will also receive the Equitymaster Stockmarket Yearbook 2010 FREE!
If you are looking out for investment opportunities and do not know where to start the search, or if you have an interest in tracking the progress of leading Indian companies, or if you are looking for a gift for someone who you wish to initiate into the world of smart investing, the Equitymaster Stockmarket Yearbook 2010 can be a wonderful gift we can offer you.
While the Yearbook has a cover price of Rs 750/-, you can get it absolutely free once you become a subscriber to 'The Value Investor'. (Your copy will reach you within 7 days of your signing up for The Value Investor)
And there's more...
4. Equitymaster Portfolio Tracker
During your subscription period, while 'The Value Investor' will help you identify Buffett-style stocks, you can also use our Portfolio Tracker for free to manage the portfolio so created.
Portfolio Tracker is an online utility to help you track your stock (and even mutual fund) investments!
It's online, and will be available to you 24 hours a day.
It's always updated with the latest stock prices...and you can also create a number of customised reports to understand your portfolio better.
The Portfolio Tracker usually costs Rs 330/- for a year. But by subscribing to 'The Value Investor', you will get it FREE.
Investor', you will receive. . .
- A monthly report on the first Monday of every month, starting November, 2009
- Security Analysis (Sixth Edition)
- Security Analysis - CD Version (Second Edition)
- Equitymaster Stock Market Yearbook
- Exclusive Report - 3 Sectors For Long Term Investors
- Online Portfolio Tracker
So, what are you waiting for?
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1-Yr Subscription :Rs 10,000* You Pay: Rs 9,000 (Save Rs 1,000!) Click here! |
2-Yr Subscription :Rs 20,000* You Pay: Rs 12,000 (Save Rs 8,000!) Click here! [Best Offer!] |
that will keep on evolving
Even after a quarter of a century, our research process at Equitymaster is evolving as we look at new opportunities on a daily basis. We will endeavour to ensure that the portfolio we advise you through 'The Value Investor' remains appropriate for your changing needs and financial aspirations.
We don't mind telling you that our advice is second to none. So we're offering you a clear no questions asked money back (minus a 10% refund fee) guarantee till 30th November 2009 in case you are not satisfied with what you receive.
We hope we have opened your eyes to this brilliant investment strategy that exists for you. We are looking forward to our future correspondence and to establishing a long-lasting and very profitable relationship.
To your wealth,
Rahul Goel
Chief Executive Officer
Equitymaster.com
P.S.: We offer the easiest money-back guarantee in the business. Till 30th November 2009, take your time and decide if 'The Value Investor' is right for you. If not, just ask us any day before this date i.e., 30th November 2009 and we will send you the refund (minus a 10% refund fee). And while you do so, you can still keep the books and the report as a thank-you gift just for trying out The Value Investor.
P.P.S.: This offer closes on October 31st, 2009.
P.P.P.S.: For any queries, contact - 1800-209-3786 (Toll Free) or 092232-63403 / 092233-20146 or Write in to us.