Equitymaster and You: The Best is Yet to Come

More than 17 years have passed but the day is still vivid in my memory.

I was seated in a small cabin, waiting for my interviewer to show up.

In walked a middle-aged gentleman, dressed in crispy white shirt and flashing a wide, comforting smile.

A typical interview follows the usual 80:20 rule. The interviewee talks for 80% of the time while the interviewer for the remaining 20%.

Well, it was the exact opposite in my case.

In the 40-45 minutes I was there, I was mesmerised by how Ajit Dayal, my interviewer, laid out his vision for the company you know as Equitymaster.

The fact that the retail investors are getting a short end of the stick made him extremely sad. He was livid they are being taken for a ride consistently. They had literally no one to guide them and look after their interests.

But not anymore.

He was determined to change this for good. When the internet burst onto to the scene, his dreams finally got their wings.

This is how Equitymaster was born.

I think its tagline 'The Investor's Best Friend' says it all.

As we complete 25 years of our existence, this is the one thing that we've always striven to be worthy of. We have left no stone unturned in trying to be the investor's best friend.

We have helped him navigate the vicissitudes of the stock market. We gave him hope and comfort when the chips were down. We asked him to be cautious and watchful when there was exuberance all around.

In other words, we treated him exactly the way we would have wanted ourselves to be treated if our roles were reversed.

In fact this obsession of doing what's best for our readers reminds me of a great observation made by Steve Jobs.

He was of the view that if not handled well, the very source of company's meteoric rise could bring about its hasty downfall.

We all know it's the sensibility and the genius that Apple packs into its products that makes it such a world class company.

However, once these companies become monopolies and giants in their own industries, the guys responsible for the revolutionary products tend to get sidelined.

They no longer influence sales. The sales and marketing people start calling the shots.

And this often rings in a steady decline in the fortunes of these companies, as they forget how to innovate.

This is why Ajit was clear from day one about one thing.

Equitymaster should never sideline the research effort. The analysts should be given complete freedom to write honest, unbiased reports.

And it's perhaps this constant encouragement from him that allowed us to come out with that landmark Reliance Power IPO report.

We were convinced the stock was a bad buy despite the rest of Dalal Street going gaga over it.

And it's the same encouragement that convinced me that Tata Motors was a screaming buy at the peak of the 2008 crisis. It enabled me to give one of my most successful calls.

To be honest, I see a lot of research houses where it is usually the sales and the marketing that call the shots.

When times are good, analysts are forced to come out with more BUY reports and when they are bad, more SELL reports are encouraged.

However, the way the stock markets work, it should be exactly the opposite.

When times are good there should be more SELL reports as stocks become more expensive. When times are bad, there should be more BUY reports as stocks become cheaper.

This is something that we've never lost sight of. It's due to the fact that Equitymaster's analysts are reminded to always do the right thing and to look at things in an unbiased way.

Yes, this has often caused us to lose significant revenues in the near term.

I have seen a lot of subscribers choosing not to buy our products because we don't recommend stocks when everyone around is doing so.

But this is fine with us.

We know that over the long run, our approach will prove to be more rewarding and subscribers will realise it eventually.

I am not saying we are right all the time. Of course, we've had our fair share of mistakes, some of them big ones.

However, those mistakes have not been because we prioritised business over the accuracy of our calls.

They have mostly been because either we've been unable to read the situation well or have been too late to react to important developments.

But we are learning all the time and trying our best not to make the same mistakes twice.

We have also been guilty recently of spreading ourselves too thin.

We began releasing new subscription services faster than we needed to, putting in more energy, and resources into services that you - our subscriber - didn't end up wanting.

Over time, this became unsustainable. Worse, we started feeling out of touch with our loyal readers.

We did not like this feeling. After all, we had set out to become the 'Investor's Best Friend'. Which is why we decided to do something about it and we shut down some of our services.

This was done in order to allow us to focus on the services that you - our subscribers - love the most.

These changes are now done and dusted.

With Equitymaster's focus on coming out with honest, unbiased reports as sharp as ever, I strongly believe the best days lie ahead.

If the last 25 years are any indication, the next 25 would be much more profitable, much more rewarding, and certainly much more insightful.

Warm regards,


Rahul Shah
Editor and Research Analyst, Profit Hunter