How to Make Your Fortune in Stocks with 0.5% of the Market

'Start with the A's.' - Warren Buffett

How would you take this advice to find the names of the best stocks in the market?

Would you shrug it off?

There are 2,400-odd frequently traded stocks in the Indian market. Barely 800 have failed to offer triple digit returns in the past year.

This means even by a random selection, 2 out of every 3 stocks would have doubled your money in past 12 months.

So, the advice to begin researching stocks starting with the A's would hardly hold water.

But then, this advice came from the legendary Warren Buffett, around two decades back.

In an interview in 1993, Buffett was asked how small investors should start selecting stocks.

And he recommended no shortcuts.

When the interviewer protested citing there were 27,000 listed US equities, Buffett's advice was to go in the alphabetical order.

The legend believed no investor can be truly successful without sifting through thousands of companies.

Now, if you think of it...only a handful of stocks that were listed two decades back offered the real big returns.

Stocks like HDFC Bank and Titan that compounded at 25 to 30% per annum were one among thousands even back then.

So, the research to find them had to be thorough and deep.

Starting with A's is like trying to do the unthinkable today.

Of course, technology can come to your rescue if you need to pick the best stocks. Instead of reading piles of annual reports, you have their financials on your fingertips.

But would that alone help?

Like I wrote to you before, 99.5% of listed stocks fail to qualify on a critical metric.

This means only 0.5% of listed stocks today are credible enough to be the big winners of the next few decades.

Even with all the hi-tech tools, screeners, and spread sheets at your disposal, you can go horribly wrong in picking the next HDFC Bank or Titan.

The last financial year can, at best, be treated as an anomaly.

If you assume that blindly picking stocks would give you returns from 2 out every 3 stocks in the future, your disappointment could be huge.

Moreover, in the event of a March 2020 like market crash, all your gains in questionable stocks, could get wiped out.

So...

If you don't want to start with the A's in reading up company annual reports...

If you do not have the time or inclination to sift through the financials of thousands of stocks...

If you don't know how to act next time there is a March 2020 like market crash...

...I have good news for you.

I have literally prepared a blueprint to select the top 0.5% listed stocks that can help create a fortune in coming decades.

I call them Forever Stocks.

I'll write to you about you these stocks more going ahead. Watch this space...

Warm regards,


Tanushree Banerjee
Editor, StockSelect
Equitymaster Agora Research Private Limited (Research Analyst)