Saral Gyan celebrates this festive season with discounts upto 30% & valuable freebies under Dussehra Diwali offer of the Year. Click here for details.

SARAL GYAN DUSSEHRA - DIWALI OFFER OF THE YEAR

PAST PERFORMANCE >>> HIDDEN GEMS, VALUE PICKS & WEALTH-BUILDER >>>  VIEW / DOWNLOAD

SERVICES:        HIDDEN GEMS    |    VALUE PICKS    |    15% @ 90 DAYS    |    WEALTH-BUILDER

SUBSCRIPTION:        FREE SUBSCRIPTION      |      PAID SUBSCRIPTION     |      PAYMENT OPTIONS

Monday, October 15, 2018

Dussehra Diwali Celebrations with Discounts & Freebies!

Dear Reader,

It gives us immense pleasure to inform you that we are celebrating this festive season by giving maximum discounts and valuable freebies to our members with Saral Gyan Dussehra Diwali Offer of the Year, this is a limited period offer and closes on 15 Nov'18.

Since 2010, Saral Gyan team has successfully published hundreds of articles providing insight to equity market and today cherish association of more than 38,000 readers. Articles published on our website received lot of appreciation as it helped our readers to make educated and smart investment decisions based on facts.

During past 8 years, we launched suitable services to help Investors to create wealth by investing in Indian stock market. Its appreciation and support of our readers that one of our most admired service - Hidden Gems ranks on top not only in performance but also on Google search engine. Try it out yourself by searching or "Multibagger Hidden Gem Stocks" or "Potential Multibagger Small Caps" on Google, you will find our website www.saralgyan.in featuring on top in search results. Its your appreciation and word of mouth publicity which make our website featuring on 1st position in Google.

Its festive season and hence we decided to pass on the maximum benefits to our readers by offering great savings and valuable freebies with our Dussehra - Diwali Offer of the Year! Attractive discounts & valuable freebies which make this festive season special for our readers are as under:

1. Discount up to 30% on combo pack subscription (valid up to 15th Nov'18 only)
2. Rs. 1 Lakh Diwali Muhurat Portfolio of 10 Stocks (to be released on 06th Nov'18)
3. Special Report - 6 Hidden Gems Stocks to Buy / Accumulate (Released on 30th Sep'18)
4. Hidden Gems Flash Back Report (to be released in Oct'18)
5. Special Report - 6 Value Picks Stocks to Buy / Accumulate (Released on 02nd Oct'18)
6. Value Picks Flash Back Report (to be released in Nov'18)
7. Existing Portfolio Health Check Up under Wealth-Builder Subscription
8. Saral Gyan eBook - "How to Grow your Savings?" worth Rs. 599 for Free.

Below table indicates subscription services and discounted prices valid up to 15th Nov'18.

Saral Gyan Dussehra Diwali Offer 2018
SARAL GYAN
SUBSCRIPTION SERVICE
DUSSEHRA - DIWALI OFFER
DISCOUNTED PRICE
PAY ONLINE 
CARD / NET BANKING 
Hidden GemsRs. 10,000 9,000
Value PicksRs. 6,000 5,400
Wealth-BuilderRs. 20,000 18,000
Combo 1: HG + VP + WB + 15%Rs. 40,000 28,000
Combo 2: HG + VP + 15%Rs. 20,000 15,000
Combo 3: HG + VPRs. 16,000 13,000
Combo 4: HG + 15%Rs. 14,000 11,500
Combo 5: VP + 15%Rs. 10,000 8,500


Simply choose the subscription service / combo subscription you would like to opt and click on SUBSCRIBE! link in above table to make online payment using your debit / credit card or net banking facility. In case you are not comfortable in subscribing online, click here to know about our other payment options and bank details.

Time has shown that smart investors have made their fortune by investing in equities in long term. None other asset class can match giving you such extra ordinary returns. Yes, its important for you to invest in right set of companies at right price. Remember, "If you want your Money to Grow, Equities is the only Way to Go" in long term. If you think to invest in stocks for period of 3 months or 6 months, we suggest you to stay out of stock market because you are not investing, you are betting on volatility of stock market which could be risky.

Its our mission to ensure that you reap the best returns on your investment, our objective is not only to grow your investments at a healthy rate but also to protect your capital during market downturns. We also take this as an opportunity to share the returns on investment given by one of our most admired service Hidden Gems during last 8 years.

Hidden Gems (Unexplored Multibagger Small Cap Stocks) continue to shine giving average returns of whopping 155.6% to our Hidden Gems subscribers compared to 51.2% returns of small cap index during last 8 years.

We are glad to inform you that 40 Hidden Gems out of 76 (released till Dec'17) have given more than 100% returns to our members during last 8 years. Moreover, 30 stocks out of these 4 have given returns in the range of 150% to 1500% during the same period.

As we made most of these reports public, you can access read / download our research reports by clicking on the Read / Download link:

1. SAB TV NETWORK >>> Rec. Date: 05 Sep'10 >>> ROI: 892% >>> Read / Download

2. DE NORA >>> Rec. Date: 07 Nov'10 >>> ROI: 238% >>> Read / Download


3. CAMLIN FINE >>> Rec. Date: 27 Mar'11 >>> ROI: 700% >>> Read / Download


4. WIM PLAST >>> Rec. Date: 30 Aug'11 >>> ROI: 771% >>> Read / Download

5. KOVAI MEDICAL >>> Rec. Date: 27 Oct'11 >>> ROI: 701% >>> Read / Download


6. CERA SANITARY >>> Rec. Date: 24 Dec'11 >>> ROI: 1466% >>> Read / Download

7. SUPERHOUSE >>> Rec. Date: 29 Feb'12 >>> ROI: 149% >>> Read / Download

8. MAYUR UNIQ. >>> Rec. Date: 31 Mar'12 >>> ROI: 564% >>> Read / Download

9. PREMIER EXPLO. >>> Rec. Date: 22 Jul'12 >>> ROI: 162% >>> Read / Download

10. ROTO PUMPS >>> Rec. Date: 05 Aug'12 >>> ROI: 462% >>> Read / Download

11. TIDE WATER OIL >>> Rec. Date: 30 Oct'12 >>> ROI: 160% >>> Read / Download

12. ACRYSIL >>> Rec. Date: 25 Nov'12 >>> ROI: 409% >>> Read / Download

13. BAMBINO AGRO >>> Rec. Date: 25 Dec'12 >>> ROI: 281% >>> Read / Download

14. TCPL PACKAGING >>> Rec. Date: 31 Jan'13 >>> ROI: 487% >>> Read / Download


15. ATUL AUTO >>> Rec. Date: 28 Feb'14 >>> ROI: 117% >>> Read / Download


16. RANE BRAKE >>> Rec. Date: 31 May'14 >>> ROI: 172% >>> Read / Download

17. DYNEMIC PROD. >>> Rec. Date: 29 Jul'14 >>> ROI: 213% >>> Read / Download

18. ASIAN GRANITO >>> Rec. Date: 29 Sep'14 >>> ROI: 81% >>> Read / Download

19. CONTROL PRINT >>> Rec. Date: 30 Nov'14 >>> ROI: 113% >>> Read / Download

20. PLASTIBLENDS >>> Rec. Date: 31 Jan'15 >>> ROI: 83% >>> Read / Download

21. MOLD-TEK PACK >>> Rec. Date: 22 Mar'15 >>> ROI: 137% >>> Read / Download

22. VISAKA IND >>> Rec. Date: 05 Jul'15 >>> ROI: 279% >>> Read / Download

23. CHEMFAB ALKAL. >>> Rec. Date: 06 Sep'15 >>> ROI: 140% >>> Read / Download

24. ULTRAMARINE >>> Rec. Date: 11 Oct'15 >>> ROI: 179% >>> Read / Download

25. STYLAM IND. >>> Rec. Date: 08 May'16 >>> ROI: 169% >>> Read / Download

We are confident that we will continue to hunt best of Hidden Gems & Value Picks from universe of small and mid caps by doing authentic, in-depth and unbiased research work and support our members to make educated investment decision.

Through Hidden Gems and Value Picks, we're providing you opportunities to invest in such small / mid caps stocks today. Infosys, Pantaloon, Unitech, Glenmark were the small cap stocks in past and today are the well known companies falling under mid and large cap space.

The stocks we reveal through Hidden Gems & Value Picks are companies that are either under-researched or not covered by other stock brokers and research firms. We keep on updating our subscribers on our past recommendations suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Moreover, under our Wealth-Builder service, we encourage our members to replicate our Wealth-Builder portfolio by investing in selective high quality small and mid cap companies. These companies are reporting 20-30%+ annualized growth and got their due share of re-rating and delivered exceptional returns to our members so far. Since 1st Jan 2013, Nifty has given returns of 76%, Sensex returns is 77.4% where as Wealth-Builder portfolio has given returns of 258% returns to our members. In case you have not yet started building a portfolio of high quality and fundamentally strong growth stocks for long term wealth creation, please find below the Wealth-Builder portfolio allocation & performance update for your reference.

We believe, investing in Wealth-Builder portfolio with regular portfolio review from our end can help you achieve market beating, very good returns over a longer team and help you take care of yourself and your family needs, which ultimately lead to a healthy and wealthy life after retirement.

Now you can add power to your equity portfolio by investing in best of small & mid cap stocks - Hidden Gems & Value Picks. Enjoy maximum savings and receive valuable freebies with Saral Gyan Dussehra - Diwali Offer by availing subscription of our Hidden GemsValue Picks & Wealth-Builder services.

Hurry! Offer will disappear on 15th Nov'18 at 11.59 pm. Click here for details.

Do write to us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing.

Regards,
Team - Saral Gyan.

Saturday, October 6, 2018

Look for Bargains during Recent Stock Market Correction

Dear Reader,

Following the crowd in the stock market can lead to disaster if you're not careful. Panic buying or selling can push stock prices beyond reason.

The crowd-following problem seems worse when the markets are down and the mood is pessimistic, people tend to sell even if there is no specific reason to let go of an individual stock.

This common trading mistake costs investors dearly. When the talking heads on television and the wags in print and online begin talk of doom, many investors dump their stocks in favor of cash or other "safe" investments.

Rushing In

As soon as the same crowd gets excited about the market again, the cash investors rush back to the market and buy stocks.

The problem with this approach is that the investor is frightened out of the market when prices are depressed and lured back in when prices have rebounded. In other words, sell low, buy high.

Your best defense against a market that slumps dramatically is to have a well-diversified portfolio that contains an appropriate amount of risk for your financial condition. This alone won't protect you when the whole market dives, however it will position you to ride out the slump and be in good position for when the market rebounds.

The thoughtful investor always asks why the price of a stock is moving before making a decision.

• Has something changed in the company?

• Has something changed in the company's primary market?

• Has there been a negative or positive regulatory or legal change?

• Is there an underlying change in the economy?

These are not all the questions you should ask, some will be specific to the industry or sector, but you get the idea. When you can find nothing in the answers to questions specific to the company, you look to the market.

Is this stock dropping (or rising) because the overall market is moving dramatically in that direction? It can work both ways, although a down market seems to depress overall prices more than an up market raises overall prices.

Shopping at Discounted Price

If you are looking to add to your portfolio, consider a down market a great shopping opportunity. A thoughtful investor is going to buy on the potential of a company and if he or she can pick the stock up at a discount so much the better.

This investing approach takes some courage and confidence in your ability to distinguish between a stock price depressed by a down market and a stock that is fundamentally flawed. You also must be prepared for further declines if the market continues to slide and consider it to add more of our favourite stock picks backed by strong fundamentals and reasonable valuations.

If you have at least three to five years before you will need to begin cashing in your holdings (at or near retirement), you may be able to ride out an extended economic downturn. However, if you do your homework, you'll find bargains in down markets that may reward you handsomely in the future.

Don't be frightened off a stock just because the overall market is sour. If the fundamentals of a company are solid, a down market may be a great time to do some discount shopping. A fundamentally sound company will likely be on the leading edge out of an economic downturn.

These days we can see news are floating on leading business TV channels and newspapers that stock market may repeat history of 2008 going through severe downfall in major indices in coming months. However, we do not agree with such views simply because valuations are not expensive like that of Jan 2008 levels and economic growth will maintain its momentum in coming quarters. Moreover, we expect overall economy to do well in 2nd half of this financial year with better corporate earnings. We continue to suggest our members to avoid timing the markets and look for bargains during ongoing market correction.  

We suggest our paid subscribers to start adding Hidden Gems & Value Picks stocks as suggested in Special Report - 6 Hidden Gems Stocks to Buy / Accumulate and 6 Value Picks Stocks to Buy / Accumulate released recently during ongoing market correction. Its an opportunity to add these stocks as fundamentals of these companies are intact and are getting available at discounted price with ongoing correction.  These companies have posted good FY17-18 Q4 and FY18-19 Q1 results and are expected to perform better and have the ability to make strong northward move when stock market find stability going forward.

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small and mid cap companies - Hidden Gems & Value Picks.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Subscribe to Hidden Gems & Value Picks and start investing systematically. Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you. 

Wish you happy & safe Investing. 

Regards, 
Team - Saral Gyan

Wednesday, October 3, 2018

Special Report - 6 Value Picks Stocks to Buy is Released!

Dear Reader,

We have seen severe correction in broader indices since beginning of this year. Mid Cap Index is down by -19% from its high made January this year. Steep fall in small and mid cap stocks this year have shaken investors sentiments and created panic for many retail investors who invested in stocks last year or during this year. Such steep corrections do test our patience and conviction. We should not get worried by listening to negative news flows. Rising crude prices, global trader war, weakening rupee, debt crisis will not impact earnings of all companies.

We keep on suggesting our members to avoid timing the market and follow a discipline approach while investing in equities and consider such steep corrections as buying opportunities to add good quality stocks at lower levels. Also, keeping a long term view is equally important. Patience always pays! Many investors get panic while watching stocks prices falling by 15%, 20%, 30% in couple of days or weeks, but if company’s fundamentals are strong with high earning visibility and valuations are reasonable, same stock can deliver 2x – 3x returns or even more within period of 2 to 5 years.

Its important to know, whether you would be able to hold on your nerves and stay calm in case of panic sell off in markets. Bad sentiments will not last for ever, if economy is growing, the companies in which we have invested are making higher profits, we will see buying interest in those companies from investors sooner or later. Its time for long term investors (2-3 years) to start accumulating good quality stocks on dips which are becoming available at discounted price.


Considering recent correction in mid cap stocks, we have reviewed our past recommended Value Picks and short-listed 6 Value Picks stocks which offer good long term investment opportunity and have potential to give excellent returns on your investment during next 2 – 3 years. 

We have released our "Special Report - 6 Value Picks Stocks to Buy / Accumulate" on 2nd Oct'18 and mailed it to our Value Picks & Wealth-Builder members.

While short listing these 6 stocks, we evaluated each company on the basis of I-B-M-V-E-D parameters (Industry, Business, Management, Valuations, Earnings & Debt Management) and rated every parameter using a rating scale – E,V,G,F,P (Excellent, Very Good, Good, Fair & Poor)

One of the important key to successful investing is to pick the right business at decent valuations. We finalized these 6 stocks with a long term view (2-3 years) and find them superior over other Value Picks stocks in terms of recent developments, valuations, earning visibility, debt management (Loan book growth, NPAs, Capital Adequacy & Other Imp Financial Ratio’s in case of NBFC / HFC) and integrity of promoters towards their business and interest of minority share holders.

These 6 Value Picks stocks have a market capital between 500 crore to 5000 crores and seen a price correction between 40% to 48% from their 52 week high without any major changes in business fundamentals. We believe these stocks will outperform giving much better returns compared to broader indices in medium to long term. Our members can add these stocks in their portfolio with long term view (2 to 3 years). We suggest our members to start investing in these 6 Value Picks stocks with initial allocation of 2% and increase allocation gradually to 4-5% in staggered way only in case stock prices of these companies falls by another 10% to 20% or more during ongoing market correction.


Important parameters which we looked into while finalizing stocks are as under:

1. Industry – Operating in Industry / sector which is expected to grow > 10% CAGR during next 3 years
2. Business – Leadership position in the business or one of its business segment in certain geography
3. Management – Prudent & trustworthy management keeping interest of minority share holders
4. Valuations – Reasonable / attractive valuations compared to peer group companies
5. Earnings – Consistent past performance & strong earning visibility with planned / recent expansion
6. Debt Management – Company is able to generate cash flows with low or reducing debt on books

If you wish to receive our Special Report - 6 Value Picks Stocks to Buy / Accumulate, you can subscribe to our Value Picks or Wealth-Builder annual subscription. Click here to know more about our services and discounts available on our combo packs.

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong mid cap companies - Value Picks.

If you have invested in stocks and believe that your investments are not performing well, subscribe to our Wealth-Builder service and get your portfolio reviewed by us. We will review fundamentals of the companies you are holding and guide you which stocks to hold and which to exit. We will also review your equity investments across sectors and companies to ensure that your portfolio allocation is right and outperforms major indices giving you better returns in medium to long term.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Subscribe to Hidden Gems & Value Picks and start investing systematically. 
Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing.

Regards, 
Team - Saral Gyan

Sunday, September 30, 2018

Special Report - 6 Hidden Gems Stocks to Buy / Accumulate

Dear Reader,

Since beginning of 2018, we have seen severe correction in broader indices. BSE Small Cap & Nifty Small Cap Index have fallen the most by 28.5% & 36.3% respectively from their all time high made in January this year. Steep fall in broader indices have hurt sentiments and created panic for many of retail investors who got into market last year or during this year. Its important to know, whether you would be able to hold on your equity investments in case stock market tanks further or think to exit? 

Remember, its always wise to be greedy when others are fearful! Fall in stock prices of small cap companies by 40% to 50% from their peaks is normal during panic times, if a particular company delivers 3x to 5x or even 10x type of returns on your investments in period of 2 to 5 years, it has all the rights to fall by 30% to 50% from its 52 week high during tough times which arises due to series of negative news flow and panic across markets. Below are some of the major reasons of continuous downfall in small & mid cap stocks in 2018:

i) Rejig in Portfolio by Mutual Funds to meet guidelines defined by SEBI
ii) Introduction of Additional Surveillance Measures by SEBI to curb volatility   
iii) Auditors exit from various companies on fear of stringent action from authorities   
iv) Unfavourable macros with increasing crude oil prices and depreciating rupee 
v) Trade war fears between US and China, rising interest rates, continuous selling by FIIs
vi) Panic in market due to liquidity concerns, IL&FS default on debt repayments

Its important to understand that long term gains come in equities only if you bear such short term pain. With recent fall in stock prices, small caps valuations are turning attractive to reasonable. In fact, many good companies are available at valuations which look very attractive considering the earning growth these companies are expected to deliver over next 2 years. This is not the time to sell in panic, but to accumulate good companies available at discounted valuations. Moreover, once the markets bottom out and form a base, we can see renewed buying interest in small & mid caps. Bad sentiments will not last for ever, its time for long term investors (2-3 years) to start accumulating good quality stocks which after a long time are becoming available at attractive valuations.

Post recent correction in small cap stocks, we have reviewed all our past recommended Hidden Gems and short-listed 6 Hidden Gems stocks which offer good long term investment opportunity and have potential to give excellent returns on your investment during next 2 – 3 years. 

We will release our "Special Report - 6 Hidden Gems Stocks to Buy / Accumulate" by end of the day today and mail it to our Hidden Gems & Wealth-Builder members.

While short listing these 6 stocks, we evaluated each company on the basis of I-B-M-V-E-D parameters (Industry, Business, Management, Valuations, Earnings Growth & Debt Management) and rated every parameter using a rating scale – E,V,G,F,P (E=Excellent, V=Very Good, G=Good, F=Fair, P=Poor)

One of the important key to successful investing is to pick the right business at decent valuations. We finalized these 6 stocks with a long term view (2-3 years) and find them superior over other Hidden Gems stocks in terms of valuations, earning visibility, debt management and integrity of promoters towards their business and interest of minority shareholders.

These 6 Hidden Gems stocks have a market capital below 600 crores and seen a price correction between 25% to 50% from their 52 week high without any major change in business fundamentals. We believe these stocks will outperform giving much better returns compared to broader indices in medium to long term. Our members can add these stocks in their portfolio with long term view (2 to 3 years). We suggest our members to start investing in these 6 Hidden Gems stocks with initial allocation of 2% and increase allocation gradually to 3-4% in staggered way in case stock prices of these companies falls by another 10% to 20% or more during ongoing market correction.



Important parameters which we looked into while finalizing stocks are as under:

1. Industry – Operating in Industry / sector which is expected to grow > 10% CAGR during next 3 years
2. Business – Leadership position in the business or one of its business segment in certain geography
3. Management – Prudent & trustworthy management keeping interest of minority share holders
4. Valuations – Reasonable / attractive valuations compared to peer group companies
5. Earnings – Consistent past performance & strong earning visibility with planned / recent expansion
6. Debt Management – Company is able to generate cash flows with low or reducing debt on books

If you wish to receive our Special Report - 6 Hidden Gems Stocks to Buy / Accumulate, you can subscribe to our Hidden Gems or Wealth-Builder annual subscription. Click here to know more about our services and discounts available on our combo packs.

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small cap companies - Hidden Gems.

If you have invested in stocks and believe that your investments are not performing well, subscribe to our Wealth-Builder service and get your portfolio reviewed by us. We will review fundamentals of the companies you are holding and guide you which stocks to hold and which to exit. We will also review your equity investments across sectors and companies to ensure that your portfolio allocation is right and outperforms major indices giving you better returns in medium to long term.

The stocks we reveal through Hidden Gems & Value Picks are companies that either under-researched or not covered by other stock brokers and research firms. We keep on updating our members on our past recommendation suggesting them whether to hold / buy or sell stocks on the basis of company's performance and future outlook.

Subscribe to Hidden Gems & Value Picks and start investing systematically. 
Avail attractive discounts by subscribing to our combo packsclick here for details.

Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing.

Regards, 
Team - Saral Gyan

Wednesday, September 26, 2018

Peter Lynch: Making Money by Investing in "Fast Growers"

“The investor of today does not profit from yesterday’s growth.” Warren Buffett

Most of us have relatives who like to fashion themselves as ‘stock-gurus’, with their stories revolving around how they ‘could have been’ millionaires now, if only they had held their nerves. The stock that comes up frequently in these conversations is Infosys. If you had invested Rs. 9,500 to buy 100 shares of Infosys in the IPO (that went undersubscribed in 1993), 1,02,400 shares (adjusted for bonus issues) worth sum of Rs. 7,35,07,840 would be in your kitty.

Infy has given CAGR returns of whopping 43.1% to investors during last 25 years (that too after keeping dividend payouts aside). Infosys got listed in June 1993 at price of Rs. 145 per share and investment of Rs. 9,500 in June 1993 is valued at ~7.35 crores today. But, is Infosys still the key to riches? As often repeated, past performance is no guarantee of future results. So, how does one find out the next ‘Infy’?

A Fast Grower is a small yet aggressive & nimble firm, which grows roughly at 20-25% a year. This is an investment category which can give investors a return of 10 to as much as 200 times the investment made by them. No doubt, it remains a favourite of Peter Lynch!

In 1950s, the Utility & Power Sector were the fast growers with twice the growth rates to that of the US GDP. As people got more power-hungry gadgets for themselves, the power bills ran through the roof & the power sector surged with booming demand. Post the Oil Shock in 70’s, cost of power generation became high with power tariffs going up; people learnt to conserve electricity. Demand, thus, fell and power sector witnessed a slowdown. Prior to it, similar decline was observed in the Steel Sector & Railroads. First, it was the Automobile Sector, and then the Steel, followed by Chemicals & Power Utility & now the IT Sector is showing signs of slowing down. Every time, people thought, rally in the fast growers of the age would never end, but it did end, with people losing money as well as their jobs. Those who thought differently like Walter Chrysler (founder of Chrysler Corporation), who took a pay cut and left the railroads to build new cars in the turn of the last century, became the next millionaires.

Three phases involved in their life cycles, are:

1. The Start-Up Phase: Majority of the companies either burn up all the cash or run out of ideas by the end of this phase. Maximum casualties have been observed here, making it one of the riskiest phases. However, maximum returns can be made from them, if one enters near the end of this phase.

2. Rapid Expansion Phase: The Company’s core proposition has worked now, with the strategy being replicated by expansion of product/service portfolio or consumer touch points.

3. Mature Phase: Growth slows down, either due to high debt or low cash, owing to the massive expansion witnessed in early stage. Fall in demand or legal restrictions might also contribute to faltering growth.

The trick is to track, which phase the organization is in, at the moment. If the firm is in late start-up phase with possibility of moving to rapid expansion phase, buy the stock when it is still cheap. Once firm’s earnings start falling with its products witnessing poor demand, it’s time to bid goodbye to the stock.

The key parameters involved in Peter Lynch’s ‘two minute drill’ are:

1. P/E Ratio: avoid stocks with excessively high P/E
2. Debt/Equity Ratio: should be low
3. Net Cash per Share: should be high
4. Dividend & Payout Ratio: should be adequate
5. Inventory levels: lower the better

Stay away from companies which are being actively tracked, followed & invested in by large institutional investors. News about buy back of shares or internal stakeholders increasing their stakes should be construed as positive.

Checks specific to Fast Growers:

1. The star product forms a majority of the company’s business.
2. Company’s success in more than one places to prove that expansion will work.
3. Still opportunity for penetration.
4. Stock is selling at its P/E ratio or near the growth rate.
5. Expansion is speeding up Or stable

One must judiciously walk the tightrope between the unquestioning belief that made the stock to be held for so long and the fear of the end from nose-diving prices due to a one-off bad year. The key is to always keep revisiting the story & ask some pertinent questions like ‘What would really keep them growing?’, ‘What is their next offering? or ‘Are their products & services still in vogue?’ It is here, that one must track the point of time when the phase 2 of the firm’s expansion comes to an end. This is usually the dead-end for organizations as success is difficult to be replicated. Unless, innovation happens, downfall is imminent & thus, an exit is necessary. P/E of these stocks is drummed up to unrealistically high levels by the madness of crowd towards the end. One must keep one’s eyes & ears open to signs, which mark the end of the road for these fast growers. A great case in point is Polaroid which had its P/E bid up to 50, only to be rendered obsolete later by new technologies.

A sure shot sign of a decline is a company which is everywhere! Such a company would simply find no place to expand any further. Sooner, rather than later, such a company would see its ‘Manhattans’ of earnings reduced to ‘plateaus’ of little or no growth, simply because no space is left to expand further.

1.The quarterly sales decline for existing stores.
2. New stores opening, though results are disappointing: weakening demand, over supply.
3. High level of attrition at the top level.
4. Company pitching heavily to institutional investors talking about what Peter Lynch calls ‘diversification’.
5. Stock trading at a P/E of 30 or more, when most optimistic estimates of earning growth are lower than 15-20%, thus, unable to justify the high price.

Fast Growers, which pay, are ephemeral & one misses them more often than not. It is a High Risk & High Gain Category of Stocks. One must remember along the classic risk & return principle, that when one loses, one loses big! So, if you are in the quest for magnificent returns, a Fast Grower can be your bet provided you know when to bid Goodbye!

If you feel its difficult for you to identify Fast Growers stocks at early stage, you can subscribe to our Hidden Gems and Value Picks subscription services. We put best of our efforts to identify companies having potential to give exponential returns in medium to long term. Its our mission to ensure that you reap the best returns on your investment, our objective is not only to grow your investments at a healthy rate but also to protect your capital during market downturns. 

If you have patience and want to add extra power in your portfolio, start investing some portion of your savings in fundamentally strong small and mid cap companies - Hidden Gems & Value Picks.

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Do contact us in case of any queries, we will be delighted to assist you.

Wish you happy & safe Investing. 

Regards, 

Team - Saral Gyan