Free Report: The 2020 Smallcap Guide

3 Perfect Stocks to Buy for a Financially Happy New Year

Jan 1, 2020

Editor's note: Dear reader, on behalf of everyone at Equitymaster, the Profit Hunter team wishes you a very happy and prosperous new year!


Richa Agarwal, Research analyst

If you caught the recent Arvind Subramanian interview, you know the New Year doesn't sound very bright.

The former Chief Economic Adviser wrote "Clearly, this is not an ordinary slowdown. It is India's Great Slowdown, where the economy seems headed for the intensive care unit."

What a grim note to start the New Year on!

How can it possibly be a happy one then?

This about sums up perhaps the biggest reservation most investors have with respect to stocks right now.

But is that a really a good enough reason to stay away from stocks?

I'll let ace investor Warren Buffett answer that one. In a CNBC interview, he said:

  • I don't pay any attention to what economists say, frankly.Well, think about it. You have all these economists with 160 IQs that spend their life studying it, can you name me one super-wealthy economist that's ever made money out of securities? No.

    If you look at the whole history of [economists], they don't make a lot of money buying and selling stocks, but people who buy and sell stocks listen to them. I have a little trouble with that.

I can't really argue with logic like that.

And it's bang on. I'll tell you why.

Here's an excerpt from Working Paper by the Indian Council for Research on International Economic Relations in 2009.

  • The Indian economy was on a cyclical slowdown after a five-year record boom and there was every hope that the economy will go for another strong growth phase after this brief slowdown. The global crisis has changed that outlook and instead will deepen and prolong Indian economy's slowdown. It has dealt a severe blow to investment sentiments and consumer confidence in the economy. The policy response so far has been prompt in the form of monetary easing and fiscal expansion but the impact may not be much in the near term. A major worry is the severe weakening of India's fiscal position and balance of payments during this crisis period. The basic question is how long it will take to revive the investment and consumer demand which are falling precipitously.

    It would be, therefore, realistic to say that the GDP growth rate for 2009-10 would be in the range of 4.8 to 5.5 per cent.

The punch line: India's GDP grew at 8.6% in 2009-10 and at 8.9% in 2010-11.

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So it's a chronic problem with economists. With all their studies and analysis, they understand the economy alright. But does that mean they can predict its fluctuations?

The answer is a big NO.

The reality is, despite all the gloom and doom, the economy could start looking up before you know it.

But as I've been writing, because of the dull economy, small-cap stocks have fallen significantly and many are trading at very low levels currently.

And those who are wise enough to bet on quality smallcaps at the time of crashes, when fear rules, and sentiment is down, make a killing in the stock market.

And as we head into the New Year, what we're seeing now is one such phase of phase of fear.

To be sure, some of the economic concerns are real. And the companies with bad managements and balance sheets will only destroy more wealth.

But if you could choose your small-cap stocks wisely, rebound riches could be yours.

Keeping this in mind, I've shortlisted three stocks that I believe are not just safe amid a volatile economic environment, but could set one for handsome gains in 2020 and beyond.

Hidden Treasure subscribers can read all about them in my special report: Rebound Riches: 3 Stocks Set to Become India's Next Mega-Stocks.

If you aren't a member of Hidden Treasure, I recommend watching the video of my Rebound Riches summit. I talked about these stocks at the summit but please note the video won't be available for long.

I wish you a very Happy and Prosperous New Year!

Warm regards,

Richa Agarwal
Richa Agarwal
Editor, Hidden Treasure
Equitymaster Agora Research Private Limited (Research Analyst)

PS: More than 5,000 people have watched my Rebound Riches Mega Summit. They have received my top 3 stock recommendations. In case you missed the summit, you can watch it here. Please note this video will not be available for much longer.

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Equitymaster requests your view! Post a comment on "3 Perfect Stocks to Buy for a Financially Happy New Year". Click here!

8 Responses to "3 Perfect Stocks to Buy for a Financially Happy New Year"

manoj

Jan 14, 2020

where are stock names?

Like 

mathew

Jan 13, 2020

send me

Like 

ROHITKUMAR

Jan 7, 2020

which 3 perfect stock to buy for financial year
pl. mention

Like 

Souvik Bhattacharyya

Jan 6, 2020

Please mention the names of the three stocks.

Like (2)

Tushar

Jan 4, 2020

Not able to find the details about 3 perfect stocks to buy this year.
Please share the stocks information

Like (1)

S RAMESH KUMAR

Jan 2, 2020

Please send 3 perfect stocks to buy

Like (5)

Sudhir Tiwari

Jan 2, 2020

So much webinars,so much offers
But all on market rates.one publisher gives many stocks.you should give at least one multibagger stock free to your subscribers as a new year gift.

Like (3)

SURYAKANT PATEL

Jan 1, 2020

yes

Like (3)
  
Equitymaster requests your view! Post a comment on "3 Perfect Stocks to Buy for a Financially Happy New Year". Click here!