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The Equitymaster Research Digest

Your Most Fundamental Doubts Answered, Making Buffett Jealous, and More...
Nov 3, 2015

The lifecycle of a stock. It's topic that is difficult to understand for most investors.

That is the reason we keep returning to this topic time and again, eespecially when we need to explain to subscribers the core philosophies behind each of our recommendation services.

Rahul Shah revisited this topic in a recent issue of Research Digest. Several subscriber queries prompted him to re-tell the story of how stocks have a lifecycle of their own. He also explained why investors should look at the stocks at each stage of the lifecycle a little differently. This is precisely what each of our product teams have specialized in over the years.

Now, investing is as much an art as a science. There is no perfectly scientific way to explain how investing at different stages of a stock's lifecycle works. But as Rahul explained, this has more to do with whether we are betting on the stock's earnings growth or its intrinsic value.

So while services like StockSelect (safe bluechips), The India Letter (Megatrend stocks), and Hidden Treasure (promising small caps) have their respective earnings criteria, ValuePro and Microcap Millionaires focus on the discount to intrinsic value.

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