True Story Of Pain Suffered By our precious Client

It again proves the point that â€˜Whatever is good for Long Term, mostly turns out to be good in short term too’!


Our latest recommendation in Aggressive Multiplier rose by 18% in just 4 trading sessions. 

 
Here is a true story of the pain suffered by one of our clients due to falling stock values.

1.       One of our important clients had an equity portfolio of Rs.70 Lakhs during beginning of year 2011. The overall stock market was going down.
2.       We were reshuffling the portfolio by selling part quantity of some shares and buying relatively better ‘value for money’ scrips, which had fallen more. 
3.       By end of year 2011, we found that it was down to approximately Rs.60 Lakhs. The client was unhappy.
4.       We continued the process of reshuffling and to our pain we found portfolio was going down along with the broader market and especially with the fall of mid-caps.
5.       Our client was unhappy that the portfolio was continuously going down.
6.       By middle of 2013, the portfolio value had come down to Rs.47.5 Lakhs i.e. a loss of Rs.22.5 Lakhs (more than 30% loss).
7.       We were very confident of the great portfolio which was built uphowever the client was unhappy.
8.       The good thing about the client was that he listened and believed to our advice and he did not book loss by selling portfolio in panic.
9.       In next one year the market suddenly picked up and some of the scrips multiplied by 200% to even 600%.
10.   The portfolio value became Rs.190 Lakhs by end of 2014. Today the value is more than Rs.230 lakhs
(For better explanation values have been shown with a constant multiplication everywhere)
 
All this happened because of:-

a) We were reshuffling the portfolio to take advantage of opportunities provided by the market aberrations by selling part quantity of some scrips and buying relatively better value for money scrips, which had fallen more.For example, two companies both priced at Rs.100, A and B with almost similar fundamentals and future had fallen: A by 65% to Rs.35 and B by 30% to Rs.70. In such cases we sold few shares of B @70 and bought double quantity of A @35.
b) Constantly, the basic aim was to move towards 100X stocks.  How can one move towards searching 100X?
 There are some basic principles to move towards  100X.  Some of them are :

  •   Integrity of the management is the Key to success of the company. Example- Tatas.
  •  Companies with unique product, excellent quality and good brand image. They should be technically sound too. Example- Symphony.
  •  Equity of the company should not be large.
  • Monitoring growth of the companies on quarterly basis is very important.
  •  Company should be in such a market where they can expand their business example- pharma exports, software and IT.
  •  They should be among the leaders in their segment example- Prestige Pressure cooker.

The above are just few points. More details on 100X to follow soon!

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