The Top Stocks to Sell in this Bull Market

Sep 8, 2021

A journalist from a leading business daily recently asked my views on the top value stocks in the market.

My reply was that there were barely any. The lady was amused. She pointed out to me that a couple of leading brokerages had recently published their list of value picks.

A few of these lists apparently went into dozens of stocks. When she rattled off the names, my worst fears came true.

Among the so-called value buys were...

  • A steel producer that has struggled to produce positive free cash in a decade.
  • A textile company with more debt that it can ever repay.
  • A mining company with pitiable return ratios.
  • A bankrupt telecom company.
  • A fragile e-commerce company.
  • A NBFC with double digit bad loan ratio.
  • A power producer that has struggled to generate profits for long.
  • And several more troubled companies that have recently come into the limelight.

Each had its own set of problems that investors were happily willing to ignore.

--- Advertisement ---
Going LIVE Today: EV Gold Rush Special Event

Today at 5 PM sharp, we will go LIVE with our special event - the EV Gold Rush.

At the event, Tanushree will share with you the complete details of our multi-year research on electric vehicles...

Including details of 3 stocks to ride this massive 15x EV opportunity.

Tanushree believes these 3 stocks could potentially offer life-changing gains in the long run.

Don't miss it for anything.

Click the link below to register for free.

Click here to sign up for FREE.

There was only one thing common among them. They were all statistically cheap based on the price to earnings ratio (PE).

It turns out that PE is one of the most exploited indicators to lure unsuspecting first-time investors in every bull market.

A statically cheap stock can never be a good investment. But so called 'market experts' and talking heads find the PE multiple to be the most convenient and compelling number to endorse.

After all, it's not the investors interest that worries them. They're only keen to sell popular narratives.

Do you remember the story that Buffett's partner Charlie Munger once narrated about false narratives?

It goes like this...

Munger was once in Minnesota buying a fishing lure. That the lure was coloured pink and green surprised him.

He asked if the fish were truly attracted to the colourful lure. The old-timer behind the counter replied, 'Well Mister, I don't sell to fish'.

--- Advertisement ---
The Rebirth of India

India's leading research analyst, Tanushree Banerjee, will show our readers how an upcoming mega shift would drastically change the state of the Indian economy...

And how investing in three high-potential stocks at the heart of this rebirth...

...could potentially hand them 100%, 300%, 500%, even 1,000% or more in the long run.

Since you are one of our valued readers, we sincerely urge you to head over here for more details

Munger narrated this story to explain market exuberance. It spells out why the market forecasters offer misleading views.

And what their incentive is to do so.

The PE ratio neither captures the real risks in the businesses nor the real long-term upside potential.

Thus, it becomes the easiest tool for mis-selling.

This is undoubtedly one of the worst indicators to buy or sell stocks in the current bull market.

In fact some of the so-called value stocks today are among the top stocks to sell in this rising market.

Not because of their valuations but because of the poor quality of balance sheet, cash flows, and management quality.

I've selected three such stocks to sell for my Great Indian Wealth Project.

I firmly believe getting rid of the wrong stocks is an important stepping stone to an eight-figure fortune.

I have laid out my blueprint in my report - Eight Steps to Your Eight Figure Fortune.

So the next time you are tempted to buy a 'cheap' stock by a brokerage report, be aware that you're probably a target for mis-selling.

Warm regards,

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

Recent Articles

The One Company Riding the Auto Revolution Beyond EVs October 22, 2021
It's not just about batteries taking over the internal combustion engine. Bigger disruptive forces are coming along with electrification.
Why Tata Motors can be India's Tesla October 21, 2021
With a 70% market share can Tata Motors do a Tesla in India?
4 Reasons why India's Tesla Could be far More Profitable October 20, 2021
Why it is extremely speculative to bet on Tesla's long-term profits.
The First Among Equals in India's EV Ecosystem October 19, 2021
The real EV winners are unlikely to be the names you hear about in the media.

Equitymaster requests your view! Post a comment on "The Top Stocks to Sell in this Bull Market". Click here!