Series 1 - Part 3
In my last post, I have listed several (past) multibaggers from 2 time perspectives. "Few years" perspective and "Few months" perspective.
The latest one year perspective does not happen very often. I call it a - mad "bull surge" rally.
How ever there are chances of this happening a couple of times every decade. And if you are well positioned for such a phenomenon; the benefits in a very short period of time can be enormous.
SOME OBSERVATIONS ABOUT MAKING MULTIBAGGING PROFITS / GAINS
A. Time
By now it must be quite obvious that, one of the most important aspect to make multibagging profits is TIME. That time in definable terms is "few years". It could be 2, 3, 4 years. In rare cases you could get your rewards in a matter of few months.
So the learning is, after you buy/add/accumulate a stock; you got to give it time to mature. Because time is such an important aspect, it is better to treat this as a "journey". If you get all the elements of the journey correct, every multibagger journey can be profitable.
B. Selection
Stock selection is a very important aspect. You have to get this correct (as this is the first step). Here the key word is "Quality"; it is very essential to buy a good quality company if you desire multibagging profits.
My definition of a good quality company: A company with a good quality product / service, with a visible demand (requirement) of the service / product over the next 2, 4, 5 years; honest / trustworthy promoters, capable management, decent processes; adequate communication with investors, transparent and understandable financial reporting.
A good website, a past track record, a consistent dividend policy, a good/reliable brand; would be nice to have.
C. Price
At what price you buy a stock is the most important determining factor, as to how well you will do with your multibagger.
Thumb rule is simple: Buy the stock at as low price as possible. Ensure that the stock is truly undervalued.
Remember, there is a difference in a stock being "just cheap" and "being undervalued"
D. Appropriate Action
"Buy low" and "Sell high" are the only 2 actions needed, after identification of a stock is done. These 2 simple actions will ensure that you profit from your stocks, again and again, and again.
E. Conviction and Patience
As time is an essential aspect of a multibagger journey, it is important that your conviction in the company behind the stock much be VERY HIGH.
Market corrections from time to time and sometimes, even market crashes are a reality of the stock markets. During such time, panic sets in and people will be tempted to join the herd and sell their stocks.
Conviction is what really helps people to "accept the pain" and ride through the rough waters without selling their stocks.
Series 1 (Multibagger, What?) comes to an end now.
Wish and Hope that more and more people learn how to make "multibagging profits" from potential multibaggers.
All the best!!
Sign off note:
Prime Minister Narendra Modi speech at the Madison Square gardens in New York yesterday, was easily the most inspiring speech by an indian leader of our times.
For the first time in my memory, I really felt that something good can happen to India. More than anything I felt that "I was at the right place at the right time"
If things work out even half as well as our PM has envisioned; indian stock markets will throw up several "rupee millionaires" and may be even a substantial number of "dollar millionaires".
Wish you all a wonderful and multibagging journey in the years ahead. Cheers!!
In my last post, I have listed several (past) multibaggers from 2 time perspectives. "Few years" perspective and "Few months" perspective.
The latest one year perspective does not happen very often. I call it a - mad "bull surge" rally.
How ever there are chances of this happening a couple of times every decade. And if you are well positioned for such a phenomenon; the benefits in a very short period of time can be enormous.
SOME OBSERVATIONS ABOUT MAKING MULTIBAGGING PROFITS / GAINS
A. Time
By now it must be quite obvious that, one of the most important aspect to make multibagging profits is TIME. That time in definable terms is "few years". It could be 2, 3, 4 years. In rare cases you could get your rewards in a matter of few months.
So the learning is, after you buy/add/accumulate a stock; you got to give it time to mature. Because time is such an important aspect, it is better to treat this as a "journey". If you get all the elements of the journey correct, every multibagger journey can be profitable.
B. Selection
Stock selection is a very important aspect. You have to get this correct (as this is the first step). Here the key word is "Quality"; it is very essential to buy a good quality company if you desire multibagging profits.
My definition of a good quality company: A company with a good quality product / service, with a visible demand (requirement) of the service / product over the next 2, 4, 5 years; honest / trustworthy promoters, capable management, decent processes; adequate communication with investors, transparent and understandable financial reporting.
A good website, a past track record, a consistent dividend policy, a good/reliable brand; would be nice to have.
C. Price
At what price you buy a stock is the most important determining factor, as to how well you will do with your multibagger.
Thumb rule is simple: Buy the stock at as low price as possible. Ensure that the stock is truly undervalued.
Remember, there is a difference in a stock being "just cheap" and "being undervalued"
D. Appropriate Action
"Buy low" and "Sell high" are the only 2 actions needed, after identification of a stock is done. These 2 simple actions will ensure that you profit from your stocks, again and again, and again.
E. Conviction and Patience
As time is an essential aspect of a multibagger journey, it is important that your conviction in the company behind the stock much be VERY HIGH.
Market corrections from time to time and sometimes, even market crashes are a reality of the stock markets. During such time, panic sets in and people will be tempted to join the herd and sell their stocks.
Conviction is what really helps people to "accept the pain" and ride through the rough waters without selling their stocks.
Series 1 (Multibagger, What?) comes to an end now.
Wish and Hope that more and more people learn how to make "multibagging profits" from potential multibaggers.
All the best!!
Sign off note:
Prime Minister Narendra Modi speech at the Madison Square gardens in New York yesterday, was easily the most inspiring speech by an indian leader of our times.
For the first time in my memory, I really felt that something good can happen to India. More than anything I felt that "I was at the right place at the right time"
If things work out even half as well as our PM has envisioned; indian stock markets will throw up several "rupee millionaires" and may be even a substantial number of "dollar millionaires".
Wish you all a wonderful and multibagging journey in the years ahead. Cheers!!
