'I Don't Know' Strategy for the Next Brexit Moment - Views on News from Equitymaster

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The Equitymaster Research Digest

'I Don't Know' Strategy for the Next Brexit Moment
Jun 29, 2016

  • Secret to steepest profits from the stock markets in the long term
  • Brexit and Rexit don't matter
  • PSUs: The epitome of value destruction

Reams have been written on how to get great returns. While the rules are simple and similar for all, returns on the same stocks could be different for different investors. It depends on when they choose to enter and exit the stock.

If you ask me, keeping all other factors constant, the earlier you spot a great investment opportunity, the higher your chances are to multiply returns. The formula is : Catch them (great businesses) young.

The big investors have a limited universe of well-known stocks. Following their lead will hardly help you beat the markets. If you are just imitating their investments...reading and following what everyone else is...your chances to earn huge returns will be limited.

To outdo the markets, I believe the small-cap space is the place to be. The space has its challenges, sure. But that's where the opportunity lies. Unlike well-known stocks that are being chased by too many people and too much money (leading to limited upside), the return potential in lesser-known stocks can be astronomical.

Returns from Investing in Fundamentally Strong Stocks When They Were Not So Liquid
  Returns* on Rs 1000 when stock has low liquidity, Rs Duration (Years)
Cera Sanitaryware 61,298 10
Balkrishna Industries 202,718 13
Hawkins Cookers 26,436 9
Pi Industries 36,802 6
Swaraj Engines 10,564 12
Zensar Technologies 10,713 11
VST Tillers Tractors Ltd 63,928 12
Vinati Organics 20,093 8
Mayur Uniquoters 404,104 12
Elgi Equipments 28,281 14
Total Capital as on 9th June    2016 (Rs) 864,935  
Overall Returns 8,549%  
IRR 45%  
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