Unleash the Microcap Maharaja: My Secret Strategy

Editor's note: Today evening at 5 PM, you are going to see me lift the curtains on my secret Microcap Maharaja investing strategy. So, if you still haven't signed up for the summit, you can do so at the earliest by clicking here.

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Investing is no less than a war where the small retail investor is pitted against the mighty institutional investor with enormous resources and talent at his disposal.

It is the classic David vs Goliath scenario.

Talking of David, we all know that the odds were heavily stacked against this simple shepherd. He was up against the mighty Goliath, a figure so imposing and strong that he could crush his enemy's skulls with his bare hands.

However, this did not deter David from facing him. In fact, he decided to play to his own strengths. When the right time came, he struck the decisive blow and brought Goliath down in one fell swoop.

Thus, by refusing to engage in a conventional head-to-head battle and believing in his own skills and abilities, the diminutive David overpowered the mighty Goliath.

I have decided to do something similar in my Microcap Maharaja investing strategy.

I believe, by playing to your own strengths and by following a proven framework for investing, you the retail investor, aka the David of the investing world, can put yourself in a great position to significantly outperform Goliath i.e. the big institutions and HNIs.

Here is the broad outline of my strategy. It has three major components.

First, just as David refused the armor that was provided to him, the retail investor can also overlook the huge resources available to the big investor and focus only on value.

You're neither right nor wrong because the crowd disagrees with you. You're right because your data and reasoning are right. So, if you base your assumptions on easily available data and follow the right line of reasoning, you can get a huge advantage over others.

On the other hand, even if the big investor has all the resources at his disposal but has no idea of how to differentiate between price and value or how to follow the right line of reasoning, all his efforts will come to naught.

Second, David had prepared a plan well in advance on how he would go about the entire fight. Goliath on the other hand, was so confident of his victory that he entered the battlefield with no strategy whatsoever.

Something similar happens in the investing world as well. The most successful investors are those who don't panic at the first sign of trouble. They have prepared plans well in advance to deal with all kinds of market situations.

My Microcap Maharaja strategy also believes in making such a plan well in advance. The plan incorporates actions to take in the case of a significant crash as well as in the case of a significant rise.

Having such a plan handy prevents both panic buying as well as panic selling. It allows the investor to do the right thing from a long-term perspective. It enables buying low and selling high and prevents investors from doing the opposite.

Last but not least, a retail investor should never count his chickens before they hatch. In the Biblical story, David did not start celebrating the moment Goliath collapsed to the ground. He decapitated him, ensuring he was dead and only then heaved a sigh of relief.

Likewise, it does not matter that the stock a retail investor has bought has ended up becoming a multibagger. If he does not have an exit plan in place, his gains could evaporate quickly, thus leaving him with below par returns.

Hence, it is very important that an investor has an exit plan ready as soon as he buys a stock. Failing to do so would put him at the mercy of his emotions, which can prove dangerous, especially in a field like investing.

So, these were the three major components of my Microcap Maharaja strategy in brief.

Trust me, following these rules will not only ensure good returns in the high potential world of microcaps but they will also keep you out of harm's way. This is because microcaps are notorious for blowing up investor money.

Last but not the least, the strategy that I have come up with has been inspired by the military victories of one of India's greatest heroes or maharajas if you will.

Thus, going through my online summit today will not only be a great learning experience but it could also fill your heart with pride as we juxtapose this microcap strategy with the valour and the vision of one of India's greatest warrior kings.

So, do not miss it for anything. I'll see you at 5 PM at the Microcap Maharaja summit.

Happy Investing.

Warm regards,


Rahul Shah
Editor and Research Analyst, Profit Hunter
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)