It was just a few days back that we discussed few parameters that one should check before subscribing to you an equity research service provider. The article can be accessed HERE. As a response to that, I received quite a few mails stating that some of the steps were not necessary. But, what’s necessary and what’s not depend on the individual and I can only tell you the various check points you must have before selecting your service provider.
For one reason or other there has always been a neglect to verifying details when it comes to Equity investments. Imagine, when you buy a AC for yourself , how many reviews you go through, how many shops you visit, how many quotes you get. But, when it comes to equity market investments, many just invest since their friends recommended it over a lunch or since they heard the name of the company somewhere. This often happens and there are many folks around you who have a high degree of neglect to details.
Ok. As for as Karthik’s query as to how to select a Equity research provider and the package, we already discussed the former. Now, here are again few check points for you in selecting a package.
Package Theme – Check out what the theme is before selecting a package for you. I believe many of the service providers come out with a theme behind the package that they provide. It could be value investing, could be penny stocks, could be sector oriented picks. Select a package which can satisfy your requirements for the investments that you are willing to make.
Remember, there are also services or say packages without any theme behind. Those are the ones which give you investment ideas on the fly. It is better to avoid such services, since most of them are run by a single person and it happens to be that they sell pirated research.
The number of offering in a package – Be really careful with this. Go for a service or a package from any service provider, where the offering is less. Do not subscribe to any package for the reason that they give you 40 recommendations or 2 Multibagger per week. You will only end up wasting both your subscription money and your investments as well.
This to me seems to be a funny thing happening around. I don’t understand how somebody can provide 2 Multibagger per week. If that many number of Multibaggers are provided for that period, let me tell you, they are not Multibagger at all.
And one more difficulty is how can you really accommodate these many picks in your portfolio? Even a average retail investor with more allocation towards Equities will have only 5 lacs for his portfolio and how can that really hold 40 or 50 stocks? Well, its altogether a different story that I receive portfolio where there are 50 stocks and sometimes even 90 stocks.
Performance – Again, this is whatever we discussed in the last article. More than checking the track record or the performance of the Equity research service provider check out the performance of the package for which you wish to subscribe. And, as said earlier, check out COMPLETE and RECENT performance.
Time the right package – As you are very much aware of and as we have seen in the last few years, markets have their own ups and downs. In such a scenario, more than selecting a right package for you, you should also be able to time it relatively.
Any package say in July 2008 would not have been of much use to you. But, a growth package or a multibagger package in July 2009 would have been of immense help to you. And now or may be when the valuations improve across the board, say in July 2010, a Value investing package may be the best for you.
So, that’s it on how to select a Equity research service provider and selecting a package. I truly believe this writing will help at least some of the readers and the check list will be some use to them.
$Multibagger package TeamArun@hbjcapital.com
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