Ignore what your stock broker, your friend and the "talking heads" on TV tell you, and...
28, 34 and even 65 times over a 7-8 year period
Now here's how YOU too can use the same
time-tested approach to make sizeable returns
and grow your wealth using Safe Stocks!
Blue-chips, or Safe Stocks as they are often called, are known for providing stability and consistent returns.
But please take a look at this now...
These are just some of the returns that members of a very privileged group have made - and continue to make - from some of the market's safest stocks.
And I'm going to reveal all about this group in the next few minutes... including their recent stock picks.
In fact, of all the stocks that were recommended for purchase to this group from 2002 to 2010, 80.9% hit their mark.
I know your initial reaction is probably that this number is too good to be true. To tell you the truth, I felt exactly the same way when I saw the report on the track record.
But I even got it cross checked by an independent auditor. And as it turned out, it's absolutely true.
And guess what? We haven't even included our well-performing recommendations made after 2010 as they have not completed their recommended holding period yet!
Anyway, we will shortly share with you complete details about the track record, including the stock picks that did not work out.
But before that, there's something else you should know...
You see, if you're like most other investors out there, you too were made to believe that there are basically only two kinds of stocks:
1) Safe low-return stocks
2) Risky high-return stocks
If you wanted bigger returns, you were told that there's no other option but to invest in stocks that involve at least some amount of risk.
Or else, just settle for the dividends and small returns that the safe stocks gave you.
But what if I told you now that Safe Stocks could make you sizeable returns too?
We recommended L&T on 5th November, 2002 when it was selling at Rs 47.5*. And when we gave a SELL on it in March 2010, it had risen 3,311%.
Similarly, Voltas too, which we recommended on 30th June, 2003 returned 2,740% until August 2010 when we gave a SELL on it.
Then we recommended Titan on 21st July, 2003 when it was selling at Rs 3.35*. When we gave a SELL on it in October 2011, the same stock was priced at Rs 218.
An increase of a whopping 6,407%!
(* Recommendation prices have been adjusted for bonuses and stock splits over the years)
don't happen every time
Agreed! What you saw above can be taken as some of the rare cases.
But we believe you can still make solid double digit returns from blue-chips...
You already saw 4 stocks before that generated 100% or more returns in about 3 years.
Apart from those...
And there are many, MANY more stocks like these.
So why settle for just tiny returns and dividends, when you can make such solid returns from SAFE large cap stocks?
All you need to do is hold the stocks for 2-3 years...
Oh and, you'll also need to do one other thing that most investors won't!
But sometimes, even perfectly good stocks get ignored due to some misconceptions. Those are the companies I'm telling you to go after.
Let me explain...
See, we all know there are no better companies than the large caps when it comes to stability.
don't know about large caps. . .
There's a strong belief among investors that large caps are virtually immune to any and all kinds of problems. But that's not really the case.
The truth is that even large cap stocks go through hardships from time to time.
The reasons could be anything like:
This is when you need to act fast and grab the stock.
When you grab good companies for cheap, doubling or tripling your money with them becomes all the more easy.
Just see these 2 examples. . .
1) Sun Pharma
We had recommended this Pharma company in January 2009 when competition and price erosion had become quite severe in global pharma markets. Because of this, the margins for most pharma companies were under pressure as they had to ensure that they were launching drugs at lower prices to grab market share.
But this particular company was different. Sun Pharma had superior margins, on back of better product portfolio. In fact, the best amongst its peers.
And that is not all. One of the reasons why this company had displayed very strong growth in both India and global markets was due to the launch of niche and complex products.
Because of this, competition was lower and it was able to generate healthy revenues and profits.
Identifying its strengths, the company also adopted a strategy of focusing only on certain key markets where it believed it had the potential to grow.
Taking comfort from its strong management and healthy balance sheet, we believed that Sun Pharma had the potential to deliver handsome returns over a 3 to 5 year period.
And the stock is up 353% in 4 years 7 months... and it's not a SELL yet.
2) GSK Consumer
We recommended GSK Consumer in February 2009 when the Indian malted beverage market was seeing stiff competition from new entrants like Dabur and Hindustan Unilever.
In the midst of all this, GSK initiated a 7% price hike in its flagship brand 'Horlicks'. It also leveraged its brand power to launch new variants.
This firmed up our confidence in the company retaining its 70% market share. Plans to introduce products from its global parent's portfolio in oral care, energy drink and other segments over the next 3 to 4 years was the additional sweetener.
So we maintained that despite competition GSK Consumer would be able to leverage its brand power to emerge stronger and improve returns to shareholders.
The stock went up 302% in 2 years 10 months till we recommended a sell on it.
We believe the main reason why people avoid large caps is because they aren't aware of this unique, time-tested, highly effective way of making BIG returns from large cap stocks.
Why else would someone say no to triple-digit returns from safe large cap stocks?
Of course, others with vested interests (you know who) also force investors to believe that large caps cannot generate big returns...
Plus, ordinary investors usually won't have the resources to execute this method properly.
Since you're investing in large cap stocks using this approach, you need not feel that you're taking on too much risk.
Agreed that no investment is perfectly safe. Not even large caps!
But with the big companies, you can be confident that they will not disappear overnight and take your entire investment with them.
Moreover, this approach is based on the time-tested investing principle of being greedy when others are fearful, and fearful when others are greedy.
So if done correctly, it is certain to produce profitable results... as has been proved already in the examples presented to you.
will be a good buy
You need to know exactly which big companies are likely to recover faster and make bigger returns for you... and of course, when is the right time to buy them.
And this is where Equitymaster comes in...
You see, we've got this Premium research service called StockSelect.
If you're looking at building a portfolio of blue-chip stocks that could deliver steady returns over the long term, then StockSelect is the service you need to be signed up for.
StockSelect tells you which big companies are a "must-have" for your portfolio... and more importantly, it notifies you as and when they're available at attractive valuations.
It works on a simple principle - buying great companies at bargain prices and making staggering returns on them when the company grows rapidly in a few years.
So with StockSelect, you not only earn consistent dividends but also big returns from the blue-chip stocks we recommend.
Take Tata Steel for instance...
We recommended Tata Steel in December 2008, when the stock was trading a mammoth 80% lower than its 52-week highs!
The stock's underperformance then could be attributed to its balance sheet that had been loaded with debt on account of the leveraged buyout of Corus.
While we saw the concerns as being valid, we knew those were far too exaggerated. Our calculations showed that even if the company's earnings were to fall by 50%, there would still be enough cash flow for it to pay for its financial expenses on the debt.
So we remained confident that the company will come out of the downturn rather unscathed.
And the stock is up 53% in 4 years 8 months, and it's not a SELL yet.
Great companies always recover when the storm passes.
So if you buy the blue-chip stocks at the right time, you could make attractive returns over 2-3 years.
See what one of our subscribers has to say...
We've been in this industry for a LONG time. In fact, we were the first Indian entity in the finance domain to venture onto the Internet.
And now, we have completed more than 17 years in the online space.
As of 8th April 2013, we have over 1,484,807 registered members from 71 countries worldwide.
But at the same time, we're not stock brokers. And we don't gain anything even if you buy the stocks we recommend.
However, it's vital to us that the stocks we recommend make you money.
Because if you don't make money from our recommendations, you will simply not renew your subscriptions. Furthermore, you'll also tell your friends not to sign up for our services.
For this reason, we take extreme care while finalizing the stocks to recommend.
In addition... I bet you too, like numerous other investors, were taken aback by the 'Satyam' fiasco and started wondering how many more companies of that sort are there in India.
Well, guess what?
Because we meet various companies face to face, do our due diligence and continuously track our recommendations... we reduce the risk of a Satyam like situation emerging in stocks that we recommend.
Here's what another subscriber had to say about our research...
more often than not . . .
You see, most investors (and even stock research firms) take the return on stock investment as the main criteria while deciding whether or not to buy a stock.
But legendary investors like Benjamin Graham and Warren Buffett have always maintained that 'evaluation of risks' is as important as 'estimation of returns'.
It is in this direction that our research team has developed the Equitymaster Risk MatrixTM or ERMTM which helps quantify the risk attached to a stock.
Look, you probably understand that no two companies have the same degree of risk associated with them. Even if they operate in the same sector, their business dynamics, managements and valuations are different.
That's why it is important to evaluate the risk involved in each case separately... and the ERMTM is designed just for that!
The ERM is a matrix designed to evaluate the key risks attached to a business, its financial history and its management. It ranks not just the company but also the sector in which it operates based on its relative risk profile.
It is an integral part of our StockSelect research process.
Again, it is the same ERM that we rely on to quantify the risks we believe subscribers need to be cautioned about while recommending a 'Sell'.
And given the complex operating environment that Indian business are aspiring to be a part of, we believe the ERMTM can offer immense value to investors seeking to identify good long-term return opportunities which do not involve too much risk.
Sometimes we make mistakes too
Like I said before, StockSelect has an accuracy rate of 80.9%.
That means for every 10 large caps stocks we recommend through StockSelect, 8 hit their target.
So there are 2 stocks out of every 10 that do not perform as expected.
Now, there's no doubt that we recommend a stock only when it meets all the required parameters.
But sometimes... despite having all those valid reasons for recommending the stocks... the assumptions we make turn out to be incorrect.
For eg: We recommended Oriental Bank of Commerce and Essel Propack in 2011, when the stocks seemed to be offering tremendous value given that the valuations were at a substantial discount to their peers and there was a strong possibility of turnaround in the businesses.
However, despite visible efforts by the managements to turn around the businesses, the fundamentals faltered after a brief period of promising performance. As a result their stock prices too showed no signs of strengthening and in fact corrected further from the recommended levels.
Eventually investors lost interest in these stocks. Plus, the lack of any significant growth in earnings kept the stocks from being re-rated. When the performance of the companies failed to get any closer to our estimates, we recommended investors to Sell the stocks in our StockSelect Performance review.
And by that time, these stocks had already lost 14% and 26% respectively.
So what I want to say is, despite making all the efforts to be as accurate as possible, there will always be factors that we can't control.
But all said and done, you can rest assured that when you receive a research note from us, it is our honest opinion about the stock - based on certain time-tested criteria and assumptions.
Our Best Blue-chip BUY Recommendations
The fact is that we research hundreds of blue-chip stocks through StockSelect throughout the year.
But at any point in time, only a handful of them will be BUY opportunities.
And among these again, some opportunities will be more attractive than the others.
So every month through StockSelect, we will send you a report discussing in detail the best blue-chip Buy opportunity at that time.
This will be the stock we feel most strongly about at that point and recommend investing in right away.
In case a company is really good but the stock price is not right yet, we will tell you the price at which to buy the stock later.
Our StockSelect report will provide you detailed and extensive analysis of this blue-chip company, along with our expert opinion on it.
In addition to this, it will also contain the Top 5 blue-chips you could buy at that point...
And also provide the updates on all our open StockSelect recommendations from earlier.
See, even though large cap companies are a dime a dozen, it's still important to know which stocks are the right stocks, and what is the right price and time to buy these stocks.
StockSelect tells you just that!
Consider the case of Bharat Forge...
Bharat Forge is one of India's largest and technologically most advanced manufacturers of Forged & Machined components...
We recommended this stock in April 2009. The company was then facing serious issue on the balance sheet front as it had loaded the same with debt.
Our view was that the company was soon to get a return on the expansion it made using this debt. We expected the company's domestic operations as well as foray into other segments to minimize the impact that sharply lower exports were having on its overall business.
While we agreed that the company was no doubt struggling to grow at rates that it has managed to do in the past, we thought the fall in stock price was much exaggerated.
And the stock gave 251% in 1 year 8 months until we recommended a SELL on it.
By subscribing to StockSelect, you'll be notified of our best Blue-chip BUY opportunity every month.
In addition to these, we also release special reports from time to time on attractive large caps opportunities. Fast action takers will benefit from these reports also.
The Companies Recommended. . .
And we don't just recommend some companies and forget about them.
Every month in our StockSelect report, we review all the recommended stocks that have yet to meet the target price or are yet to complete the recommended tenure of investment i.e. all open positions.
We provide subscribers our latest analysis on all those recommendations... and whether we maintain our views on them or have changed the same.
We illustrate in detail our reasons for maintaining the stance or change in stance, and finally summarize all of those into a table as you can see below:
Apart from these quarterly reviews, another thing that forms part of the "ongoing coverage" is the Quarterly Result Analysis that we write for all companies under coverage... wherein we also mention whether the results are in line with our estimates or not, and whether we maintain our view on the stock or not.
Given that the markets are bumpy most of the time, this kind of information can come in very handy.
Here's what one subscriber had to say about our review reports...
These are articles and reports that are available to our premium subscribers only.
We release over 350 of them every year.
You might understand that there a lot of factors influencing the stock price, most of which need to be monitored regularly. So from time to time, we release instant reports and updates on various companies.
These articles include excerpts of management meetings, extracts of conference calls, updates on the happenings in a company and our personal views on it, and so on.
This is all "unadulterated" information and it will serve as a valuable input for your investment decision.
The Portfolio Tracker is an online utility that helps you track all your equity and mutual fund investments in one place! It's online, and is available to you 24 hrs a day.
You just have to enter the details of stocks or mutual funds owned by you ONCE... and Portfolio Tracker will show you what your entire portfolio is worth AT THAT MOMENT anytime you log into it.
But what makes the Portfolio Tracker the indispensable tool that it is are the intelligent reports that come along with it.
You see, we at Equitymaster have spent a considerable amount of time trying to understand how the fund managers who invest for the long-term track and review their portfolios.
And it is the relevant learnings from this exercise that we have translated into reports.
In a nutshell, these reports help you answer questions like -
The Portfolio Tracker usually costs Rs 330 for a year. But by subscribing to StockSelect, you get it absolutely FREE.
Our Recently Released Asset Allocation Guide
Our experience shows us that a majority of new investors fall into two main categories:
Therefore our intention through this Guide is to Guide you allocate your investments properly... to not just give you a chance of maximizing your stock market returns but also keep the risk involved to a minimum.
And this Guide, too, will be available to you FREE when you subscribe to StockSelect.
The Daily Reckoning . . .
Now you can read what knowledgeable investors across the globe read every single day for global market analysis and investment ideas.
Yes, we are delighted to bring you 'The Daily Reckoning', a daily financial e-column by Bill Bonner, Publisher and Editor, and three-time New York Times best-selling author.
The Daily Reckoning is published every day in 3 languages from offices in 6 countries - US, UK, Australia, France, Germany, South Africa.
Now, it's India's turn... and your turn to get it for FREE!
When you subscribe to StockSelect, you automatically get a free subscription to the Daily Reckoning also.
You will find the Daily Reckoning extremely useful if you're interested in monitoring, or even investing in the global.
And last but not the least...
In case you're wondering how you're going to keep track of ALL the research we publish through StockSelect... or if you'll be able to use all of it effectively...
You'll be glad to know that we now release a weekly email titled "The Equitymaster Research Digest" which gives you a roundup of all the research published under premium services relevant to you during the week.
Yes! This is a new feature started by Equitymaster and has been appreciated greatly by subscribers like yourself.
Here's what some subscribers had to say about it...
So you'll never have to worry about keeping track of or missing any important research from StockSelect.
You can just click on a link in your email, and get the full information whenever you want.
You might be thinking all this would cost a lot, but no!
The price of StockSelect is normally Rs 5,000 per year, which is anyway not much to pay for a service like this.
But now, you can subscribe to StockSelect for Rs 2,450 only.
This is less than 50% of the actual price, and comes to about Rs 205 per month.
Plus, you can also sign up and test-drive StockSelect for a full 30 days.
If you don't like it, get in touch with us before the 31st day, and we'll refund the full fee you paid. That's a promise!
5 Stocks you could invest in right away. . .
We released a special report titled "Equitymaster's Top 5 for 2015" only for our premium subscribers, which we'll be giving you for free now.
You see, we know from experience that the money-making potential of investing with at least 2-3 years perspective far overrides the short term trading strategy.
With exactly this in mind, we have identified 5 stocks which we strongly believe could turn out to be the Star Performers of Your Portfolio by 2015. And provided the full details in this special report.
So you'll get this report for FREE when you subscribe to StockSelect now. And you can keep it if you cancel your subscription within the trial period also.
Using Our Full Refund Cover
Look, StockSelect has an extremely good success rate of 80.9% from its launch in 2002 up to 2010, and you'll also be investing in stocks which in our opinion are among the market's safest by subscribing to it.
Plus, you've also got nothing to lose...
If you make use of this offer, you can subscribe to StockSelect at a highly discounted price, and try the service for 30 days without risk.
During this one month, you'll get 1 current issue of StockSelect... plus access to archives of all the previous StockSelect issues.
After going through the current and past issues, you should have a good idea of whether StockSelect is for you or not.
If you don't like what you see, just let us know before the 31st day and we will refund the entire price - no questions asked.
And you can also keep the special report as a way of saying thank-you from us for trying StockSelect.
So you have at least 4 good reasons to sign up for StockSelect NOW:
[Click here to subscribe]
P.S.: So sign up now to get...
P.P.S.: There's a 30-day full refund cover on this offer. So sign up and at least see what StockSelect is all about. If you don't like it, we'll give you a FULL refund. However, this offer will be available for a short time only, so act fast!
P.P.P.S.: If you have any queries, please do not hesitate to contact us at +91-22-61434055 or Write in to us. We will be delighted to assist you!
Bigger Returns From Safe Stocks