»Profit Hunter by Equitymaster

On This Day - 21 JANUARY 2021
Invest in the Multibaggers of 2021 and Beyond

Editor's Note: Dear reader, today is a historic day for the market. The Sensex is above 50,000 for the first time ever. Traders and investors desire for profits has never been higher. You can find the biggest profits in multibagger stocks. A few days ago, I wrote about the best way do go about finding multibagger stocks. Read on to know more...


Rahul Shah, Editor, Profit Hunter

'There are two kinds of boys', counsels the lead actor to an 11-year old boy in the hit movie Jurassic Park III.

'Those that want to be Astronomers and those that want to be Astronauts. The Astronomers gets to study these amazing things from a place of complete safety'.

'But you never get to go into space', the boy retorts. 'Yes. It's the difference between imagining and seeing', comes the reply.

I have no qualms in admitting that I come as close to the astronomer equivalent of a research analyst as possible.

I am of the firm belief that the historical performance tells you everything you want to know about a company, especially the important things that matter.

Also, with the amount of information on the internet these days, it isn't too much of a stretch to figure out whether the intrinsic value of a company is trading below its market price or above it.

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This approach makes perfect sense when all you are looking for is a 50%-100% upside in a stock. Such stocks are usually candidates for 'reversion to the mean' when they suffer earnings hiccups for a year or two.

Once the earnings go back to normal, the stock price converges to its intrinsic value. You can then move on to the next stock.

But make no mistake, this approach falls flat on its face when you are looking for multibaggers.

Investing astronomers don't have the requisite tools to analyse such stocks. Here, you need the expertise of a proficient astronaut.

My colleague, Richa Agarwal is not known for her 'boots on the ground' approach for nothing.

An out and out travel enthusiast, Richa has found a great outlet to convert her passion into a full-time job.

You see, she does not believe in spending her time trying to help her subscribers make a lot of little profit. She wants very big profits that's she's ready to work and wait for.

Nothing gives her a greater high than knowing her companies inside out and knowing them better than any other analyst out there.

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And a sure fire way to do this, she believes, is to go where the real action is and look straight into the management's eyes.

I don't remember a single company where she made a recommendation without visiting the company premises or the management. Even if this meant travelling to the remotest and the farthest corners of the country.

Numbers tell only half the story. They tell you only about the past. Whereas investing is all about the future.

For a recommendation to stand out, to earn much more returns than the market, you should know what the management is up to.

And there's no better way to do this than hear it straight from the horse's mouth.

The conviction with which the top management speaks - its body language, the passionate glint in the eye or the absence of it - are all pointers towards whether the management can fulfil its promise, and whether it is battle ready.

Absent such signs, she is more than happy to give the company a miss no matter how glorious its past.

Is this the right investing approach?

Well, her subscribers are certainly not complaining.

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In charge of Hidden Treasure, our most popular paid stock recommendation service, the publication has only gone from strength to strength under her watch.

There aren't many services around that boasts of outperforming the benchmark indices by a factor of 3x.

With so much success under her belt, I think she's got the right process of investing in small-cap stocks that are led by the good management teams.

I have not a doubt she will continue to produce such stellar returns going forward as well. Maybe even improve upon them.

This is why I was excited when she embarked upon her new project. A project where she has taken it upon herself to dive deeper and try and zero in on stocks at the cusp of exploding big time.

If you missed joining Richa on this exciting journey, no worries.

Richa will reveal details of this once in a lifetime opportunity in an exclusive web summit on Thursday, 28 January at the Smallcap Revival Summit.

I highly recommend you block your calendar dear reader. We're expecting a big audience. Don't miss it!

Book your free seat for Richa's Smallcap Revival Summit.

Good Investing,

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

PS: Richa will show you how to profit from the massive upcoming revival in small-cap stocks. Join Richa at the Smallcap Revival Summit. Book your free seat here.

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