Of Tata, Tortoises, Junior Bluechips, Phase One Alert, and more... - Views on News from Equitymaster

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The Equitymaster Research Digest

Of Tata, Tortoises, Junior Bluechips, Phase One Alert, and more...
Oct 26, 2016

  • How 'the hare and the tortoise story' plays out in the stock market
  • Our latest Hidden Treasure special report is live... Junior bluechips (October 2016)
  • An update on the first Phase One Alert recommendation
  • Why Tata fired Mistry...a saga that has just begun

We have all heard the story of the hare and the tortoise. A slow-moving tortoise beats a fast-moving hare in a race. The moral of this story is simple: Slow and steady wins the race.

But did you know that this story plays out in the stock market too? Yes, indeed. And my colleague, Rohan, has explained how. Using a long-term comparison, he showed that shareholders of a 'slow tortoise stock' made 31.1% more money that the shareholders of a 'fast hare stock'. If you are wondering how, you can find out here.

But here's the secret in brief...

  • Focus your search on small companies
  • Narrow down the ones operating in a niche segment (it helps if the niche is in a boring industry)
  • The company must be dominant in its niche
  • The historical numbers must be decent
  • It must be a dividend-paying company
  • Find out if the management has done anything suspicious or unethical in the past (annual reports will give you the answer)
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