We have skin in the game. We only recommend what we invest in ourselves.
We give end-to-end guidance: What to buy, how much to buy (percentage of overall portfolio allocation), when to sell
Regular monitoring of investments, but infrequent action
Error reduction through process-oriented structured approach
Do NOT try to time the market
Emphasis on overall portfolio and not only on individual stocks
We DO NOT have any get-rich-quick scheme. We DO NOT have any multibagger scheme. We have a slow, steady and boring equity investing scheme!!
We believe wealth is generated by participating in the growth of a business. Identifying such businesses that can generate above-average returns is what we do.
The greatest wealth creation is possible when one invests in a business which can compound its earnings at high rates for a very long period without the need for too much additional capital. We invest with a long-term horizon. Long-term investment does not mean we invest and then forget about it. Investing is like planting a tree. Just as after planting the seeds, regular care in terms of watering and weeding is required for the best results, similarly, after investing constant monitoring is needed to increase or decrease allocation and to decide to sell when the need arises.
Psychology plays an important role in investing. Two people having identified the same stock at the same time can have a vastly different outcomes due their personal psychology (fear and greed). Our endeavour is to always protect the investor from himself. We give huge importance to behavioral biases in investing. To reduce our psychological biases, we follow detailed checklists to judge a business before investing in a stock. The checklist contains such factors as quantitative, qualitative, valuation, promoter behaviour and reasons for past mistakes.
There will be times when the markets will go through exuberance or depression. To be rational during such times of extreme emotional turmoil is what eventually results in good long term returns.
We try to keep things simple while investing and not try to go for complicated businesses, which we do not understand. In this we follow Warren Buffett when he said, “Never invest in a business you cannot understand.”
Good investing is supposed to be boring. That is why we try to buy and hold for extended periods when the underlying business economics is favourable. To us, if we can find a few excellent opportunities a year, it is sufficient to create significant wealth. We do not try to time the market. We have never been successful at it and don't really know of anyone who has been able to time the market consistently. We would much rather be invested in good businesses than try to jump from one trade to another.
Portfolio construction is an art and we believe an optimum portfolio should have between 10-20 stocks. We explain our portfolio construction method and where each stock recommendation fits into the portfolio to our members. We have no biases of market capitalization or industry. We simply buy what we understand and like and avoid what we don't understand.
Research-based Recommendations: All the stocks are backed by in-depth and actionable research. We do detailed study of the industry, business before recommending it to you.
Portfolio Construction: Our emphasis is not only on finding new investible ideas. We give equal thought on where it fits into our overall portfolio. We have an eye out for individual stock weights and sectoral weights in the overall portfolio. Our approach of core and tactical stocks help in marrying diversification with opportunism.
Risk Management: We focus on limiting our losses. When we are wrong or when fundamentals turn against us, we readily admit we are wrong and we reverse our course. We do not seek new theories that will justify our original decision. We do not let errors fester and consume our attention. We sell and move on.
Long Term Focus: We believe in long-term compounding and design our portfolio to mirror our views.