Value Investing India!

VALUE INVESTING

Value Investing is an Investment Method where You will Evaluate the Value of an Asset and Compare it with Price to make Buy or Sell Decisions. ONLY 1% Traders makes Profits, But 100% Value Investors makes Profit! Value Investing is the Strategy we used to create 50X Returns in Bajaj Finance. So Learn Value Investing seriously.

If you are going to purchase a Maruthi Car and the Dealer is asking Rs. 1 Crore for it – Will you Buy it or Not? Clearly you will not buy it as you know the Price is very high compared to the Value!

However in Stock Market the Price is available readily but the Value Identification requires more effort where you have to use the following methods:

  • FUNDAMENTAL ANALYSIS here the book value, sales, profits are analyzed to arrive at the Value of the Company.
  • GROWTH ANALYSIS here the sales growth, profit growth, projected growth are calculated to arrive at the Value of the Company

This is Best Value Investing Article in the World. Use it fully!

If you are looking for VALUE STOCKS INDIA here you go.

VALUE vs PRICE

Now coming to the Point of value investing actions:

  • if the market price is lower than value then the value investor will buy
  • As long as the market price is lower than the value investor will hold
  • If the market price reaches higher than the value the value investor will sell

Thus through Value Investing the Value Investor makes Profit through Capital Appreciation, Dividends etc.

value investing india

For Example: Warren Buffett bought Apple Shares at $100 Price during 2015 because based on the Fundamental & Growth Analysis he found the Value at $1000. In just 5 years the stock price zoomed to $500 giving him 500% Profits in Capital Appreciation!

As a Value Investor you should be able to Calculate the Future Value of the company!

WHY LEARNING VALUE INVESTING IS IMPORTANT?

You are living in a Money-controlled World. All the Activities you perform day-to-day have a Money Component in it.

  • The home you live or rent needs money payment
  • People go to work to meet money expenses
  • The education yesterday was to make better money in future
  • Sitting idle also still costs money as electricity, cooling, water, food expenses still exists

If you spent time on a Passion, people call it waste of time, but if it generated money it becomes Productive!

So it is Important to Learn & Control Money by applying Value Investing!

5 YEAR FINANCIAL FREEDOM THROUGH VALUE INVESTING

The more you become a Value Investor more your Money Problems disappear & You will be able to gain Self-Actualization in life. You can learn about our 5 Year Financial Freedom in the Picture below which depicts how 5 Year Value Investing can generate Rs. 2 Lakh monthly income to be Financially Free!

futurecaps subscribe 5 year financial freedom

WHO ARE THE VALUE INVESTORS?

Warren Buffet (International Investor) is a Value Investor.

Ramesh Damani (Indian Celebrity Investor) is a Value Investor.

We (Futurecaps) is a Value Investor.

HOW VALUE INVESTING MAKES YOU RICH?

If you make Value Investing a Life-style OR Mantra, then your Wealth & Income will grow higher each day. You will really become Super-rich like the Celebrity Investors. All the Rich People are VALUE Conscious!

You can apply Value Investing in your Day-to-Day life. For example, Rs. 10 Thousand Course will give you Rs. 20 Thousand Increase in Income. 100% Gain! You give 1X price & you got 2X value! It is Value Investing.

In the world of stock market, the Value Investing is not about 2X gains.. It is about 10X, 100X, 1000X & even 10000X gains. So Learn Value Investing!

HOW YOU CAN BE A VALUE INVESTOR?

Futurecaps has created many Value Investors & they have made Millions of Profits through Value Investing.

You can be a VALUE INVESTOR by following the path below.

  • Master the Skill of Stock Valuation using Intrinsic Value
  • BUY a Stock if the Value is higher than Price
  • SELL a Stock if the Value is lower than Price
  • Keep a Portfolio of 10-14 Stocks
  • Shuffle the Portfolio yearly

PAID TRAINING LEARN FROM REAL INVESTORS!

DAY TRADING IS NOT VALUE INVESTING!

It is a common misconception that Stock Market is a Quick Way to Make Money – this is the Reason more & more people are found in Day Trading. Let me tell you frankly, Day Trading will MAKE you Poor!

Day Trading does not Involve Fundamental Analysis. It is Just a Gambling based on the Current Market Price of the Scrip. Day Trading involves huge time & money spent on market with lot of mental effort – still they are LOOSING money and becoming POOR through stock market. This is because the Whole Game of Day Trading is created in such a way that ONLY the broker, government & tips providers make consistent profits!

Sad to say, Day Traders & Short-Term Investors are NOT Real Investors. The Top Riches in World are not Day Trader but Value Investors like Warren Buffett, Ramesh Damani are!

LEARN MORE | There is a Challenge for Day Traders there

HOW YOU CAN SURVIVE BEAR MARKET THROUGH VALUE INVESTING?

Value Investing can be applied to All Market Types – Bull Market, Dull Market & Bear Market too.

During the Bear Market, the Value Investor can Re-Calculate the Intrinsic Value on their Portfolio to take actions:

  • BUY the stocks whose Value > Price
  • SELL the stocks whose Value < Price

Real World Example As you know Warren Buffet during the 2020 Peak of US Stock Market did not made any big purchases. He found that the Value of stocks are Lower than the Price!

At the same time the same Warren Buffet during 2010 Market Crash bought truck loads of Bank of America & Other stocks as they were under-valued during the time.

INTRINSIC VALUE FORMULA

If you wanted to be a VALUE INVESTOR in stock market, You MUST learn INTRINSIC VALUE FORMULA. This method was created by Benjamin Grahim the Mentor of Warren Buffett. The formula is bit complicated but worth learning it if you wanted to be Rich!

Futurecaps has modified the formula for Indian Stock Market. You can watch the Video below on How to Calculate the Intrinsic Value.

You can Access the >> INTRINSIC VALUE CALCULATOR

Only 1% Traders makes Profits, But 100% Value Investors makes Profits!

VALUE INVESTING RATIOS

Value Investors uses the following Ratios in additional to the Intrinsic Value Formula.

PE Ratio Price to Earnings Ratio. Lower the Better.

PEG Ratio Price to Earnings Growth Ratio. Lower the Better.

PB Ratio Price to Book Value Ratio. Lower the Better.

DE Ratio Debt to Equity Ratio. Lower the Better.

CURRENT RATIO Current Assets divided by Current Liabilities. Higher the Better.

Futurecaps uses 20 Point Checklist contains above Value Investing Ratios.

value investing checklist

VALUE INVESTING MULTIBAGGERS

Following are the Multibaggers based on Value Investing Analysis.

Manappuram Finance We recommended Manappuram Finance in the Midst of Corona Troubles. During the time the Price crashed 50% & most of the Investors were selling the stock.

Futurecaps found a Value Jump of 100% as the Price crashed 50%. Remember, the company was having Growth in EPS for the past 2 years through Increased Business spaces from Gold Loan, Auto Loan, Housing Loan etc.

Thus we recommended Manappuram Finance below Rs. 100 & it gained 100% growth in just 3 months!

IOL Chemicals Futurecaps recommended IOL Chemicals on the same basis of Value Investing. The Intrinsic Value was growing due to the EPS Growth of the company. However the Price was crashing due to Corona sentiments.

In just 3 months of time the Price got increased 100%. LINK

VALUE INVESTING FAQs

Which method I should choose for Value Investing?

Futurecaps recommends Intrinsic Value method which involves Value Investing. Additional to Intrinsic Value you can use the other Value Investing Ratios described below involving PE Ratio, PEG Ratio, D/E Ratio, ROE etc.

Is Investing in a Loss-making Company considered Value Investing?

Yes if there is Proper Valuation on how the Turnaround happens it is Still Value Investing. Advanced Value Investors like Porinju Veliyath performs these type of Turnaround Value Investing which requires high skill & experience.

Can I perform Value Investing with Low Capital?

Yes, Value Investing is possible with Rs. 1000 as well.

What is the Preferred Holding Period in Value Investing?

The preferred holding period depends on the type of instrument & the actualization time of the theme period. For example, you decided to invest in a Pharma Company as you Calculated the New Product Launch will increase the EPS, then you have to wait until the Product is launched, Sales is improved, Market Visibility happened.

I hear there is ONLY Buy & No Sell in Value Investing – Is that true?

Yes, Big Investors like Warren Buffett follow the path. They buy a share based on the Intrinsic Value and Hold it for whole Life as long as the Intrinsic Value is higher than the Price. When the price crashes they will be buying more as it is considered as opportunity. They prefer to hold long on the stock & earn capital appreciation & income through dividends. However, seldom they sell the stock if the Valuations changed. Example, Warren Buffett sold his holdings in Delta Airlines as due to Corona Troubles & Government stake increase.

What is the Difference between Value Investing & Growth Investing?

Value Investing is about finding the Real Value, Compare with Price, Invest & Sit tight to realize the Value on Price. Here Investor will ONLY buy a stock if Price < Value. In future market will recognize the Value by providing higher Price.

Growth Investing is about Focusing on High Growth Stocks which is having a Technology Advantage, Brand Loyalty etc. Here Investor will buy a stock EVEN if Price > Value. In future market will respect the Higher Value too.

In Futurecaps we actually follow a Combination of Value + Growth Investing! All our stocks are Value pick & Growth pick too – that is how we achieve Multibagger returns.

Can I implement Value Investing in Real Estate?

Yes. If you can Evaluate a Real Estate & Identify the Value, then Compare with the Price to make Buy/Sell decisions, then you are actually doing Value Investing in Real Estate. For example, you found a Flat which needs some repairs at Rs. 50 Lakh. You estimate the Repair Expenses as Rs. 10 Lakh and you see the Potential of Sellingt it at Rs. 80 Lakhs with 20 Lakh Profit. Here you are performing Value Analysis & Value Investing.

Can I implement Value Investing in my Career?

Yes. You can perform Skill Upgrade, Career Upgrade using Value Investing. For example, If you put Rs. 10000 for a Training & Certification to earn Rs. 1 Lakh extra then you are getting a 1000% Annual Profit on Value Investing in Career. Another example would be, if you switch your Job Company or Location for Higher Payment, you are getting Higher Returns on the Switching Cost (decision overheads, relocation expenses etc.) to the Extra Money earned.

Can I perform Value Investing in a Business?

Yes, All the Business Owners are using Value Investing knowingly Or unknowingly. For example, if you are a Business Owner making Rs. 1000 per hour & wanted to file taxes yourself will kill 5 hours of your work. Instead You are Hiring a Tax Consultant for Rs. 500 per hour – then you are actually saving Rs. 2500 by focusing your core work & outsourcing the unwanted work to the right person.

More Questions

You are Welcome to Comment here. Our Core Advisor will reply soon.

CLASSIC BOOKS ON VALUE INVESTING

If you wanted to Learn Value Investing to the Core >> Here are the Top Books on Value Investing.

value investing books the intelligent investor security analysis Warren Buffett and the Interpretation of Financial Statements

THE INTELLIGENT INVESTOR

Here is the Diamond Summary of the Book THE INTELLIGENT INVESTOR.

  1. Always Invest with a Margin of Safety Here Benjamin Graham enforces the Lessons we learned through Intrinsic Value. In fact Benjamin Graham is the Father of Intrinsic Value formula, which Futurecaps optimized for Indian Stock Market. (No doubt on the formula as for a Decade it is giving us Winning Picks & Exit Signals). The Margin of Safety is kind of Air Bag which will absorb Temporary & Un-foreseen Prices crashes of the company while we are Insured on the Value. According to Indian Market conditions 30% is the Margin of Safety for Largecaps & 50% is the Margin of Safety for Midcaps & Smallcaps.
  2. Expect Volatility and Profit from it Benjamin Graham the Father of Value Investing always observed the Advantage of Bear Markets. Bear Markets just give High Amount of Margin of Safety which will Double the Compounded Returns of future. As you know from the Indian Stock Market crash during Mar 2020, we have gained Easy 100% Returns on Stocks invested during the midst of it. Secret! Bear Market is a Hidden Tool of Riches to Double the Wealth. However, Bear Market alone is not comprising of the Volatility. Temporary problems with a Single Company can also lead to Volatility in the particular stock price. These Volatility Opportunities whether Whole Bear Market attack Or Volatility in a Single Stock Price should be Carefully Analyzed, Ensure Margin of Safety & Wisely Acquired for Multi-fold Gain in the Long-term.
  3. Know What kind of Investor you are As per Graham, there are 2 types of Investors Speculator & Investor. Speculators are those Day Traders & Short-term Investors who loose time & money in the stock market. They will not learn properly about a company, do gambling, take lot of actions & earn less Or make losses. However, Investor are those people like us who do proper Fundamental Analysis of the company, Reads the Annual Report, Do the Checkpoint Analysis, Ensure Future of Sector, Ensure Margin of Safety & Invest as if we are also Owning the portion of the company. In the long-run these Investors are benefited with Super Returns involving Power of Compounding!
  4. Hold for Long-term As per Graham, the Real Value of a company is Unlocked in the Long-term through Market Recognition, Funds Investing, Capital Appreciation, PE Resizing, Dividend Gain etc. So it is Important to Hold the stocks for Long-term. The additional benefits of Graham’s method is Less actions in stock market, More peace of mind & Obviously More Returns than other Speculators. (Note: If you ask the Annual Returns of those Short-term Investors or Day Traders you will be Surprised to see most of them are in Losses & few have Maegre returns like 10-20% – This is the reason we are saying only 5% People really make Profit in Stock Market & They are Long-term Investors)
  5. Compound Returns 20% Annually The reported returns of Benjamin Graham was around 20% annually. Due to the Large Capitalization companies he was holding & the historical timeline of 1890-1970s it is believed to be extra-ordinary returns. To the advantage of Indian Stock Market Investor who Directly Invest in Equities especially Midcaps & Smallcaps, you can gain 30-50% Returns on Annual Basis coupled with our Bear Market Strategy available to Premium Members!
  6. Financial Ratios Following were the Important Ratios used by Benjamin Graham.
    1. Rating on Company Find the Quality Rating on the Company by Reputed Rating agencies. In the case of India, we can use CARE or CRISIL ratings.
    2. Debt to Current Asset Ratio Graham preferred low debt companies. If there is Debt the Debt to Current Asset Ratio should be less than 1. In Screener we can Custom Build these ratios. [Taught in course MASTER MIND]
    3. Current Ratio The Current Ratio should be above 1.5. The Current Ratio is calculated by dividing Current Assets by Current Liabilities. Current are those entries which has to be Met in the Current Financial Year. Current Ratio is readily available in Screener.
    4. Positive Earnings Growth Graham ensured the Current Earnings of the Company is Higher than the Earnings 5 Year before. Please note that In Indian Conditions we prefer to have Higher Earnings each Year.
    5. PE Ratio Price to Earnings Ratio is an Important Factor in Graham’s research book. He prefers to have PE < 9. Graham also warns that Low PE may be Eliminating High Growth companies and hence other Growth Ratios needs to be applied. In our Indian Stock Market Scenario we use the PEG Ratio for same.
    6. PB Ratio Price to Book Value Ratio is the next important ratio than PE Ratio for Graham. It is calculated by dividing the Price to the Accounting Book Value of the company. Graham likes companies which have PB Ratio around 1 or less than 1. In Futurecaps Research we prefer to have this value as Max of 3.

Note: All these Ratios of Benjamin Graham are included in Futurecaps 100 Point Research Checklist in determining a Stock as Multibagger or not. Premium Subscription.

SECURITY ANALYSIS

Here is the Diamond Summary of the Book SECURITY ANALYSIS.

  1. Minimize the Chances of Irreversible Losses In this book the Principle of Preserving Capital is enforced by Ensuring the stock company is having sound financials, the Return yield is better than Bond Yields, Buy stocks below Intrinsic Value etc. The author David is talking in the context of US Stock Markets were Big Crashes like Dotcom Bust, Sub-price Crash etc killed the Stock Market & Bond Market too causing equal trouble to Safe & Aggressive Investors. Thus David is in the view that Bond Market can also undergo negative yields while the returns are less.
  2. Maximize the Chances of Sustainable Gains If a sound company is found with growth prospective, ensure how the company maintains the growth in future too – for example price differentiation, monopoly technology, sector growth, brand loyalty etc. are the security factors which will ensure the company will have steady growth in future too. Warren Buffet as an Apple Investor called Apple as a Brand Loyalty Company because he found the Customers are ready to Pay Extra-cost to Apple iPhone compared to other devices as well as ready to wait whole night at the Store during New iPhone launches.
  3. Differentiate between Defensive & Enterprising Investor A Defensive Investor is one who takes Moderate Risks for Moderate Gains. Enterprising Investor will take High Risk for High Gains. The matter of Debt exposure, Innovative technologies etc. are core determinator here. In Indian Stock Market a Moderate Return would be around 10-12%; but this Moderator Risk taker can often end up in bigger trouble as they are Risking 100% of their Capital while expecting 10-12% Moderate Returns. As an Advisor with stock market experience I would say Stock Market is for Higher Returns in the order of 20-50%; If one is seeking lower returns like 10-12% then Corporate Fixed Deposits would be an alternative idea.
  4. Perform Quantitative & Qualitative Analysis Both Quantitative & Qualitative Analysis are required to Identify a Stock as a Multibagger. Quantitative Analysis involves the Financial Statements & Ratios analysis. Example are PE, PB, PEG, Net Profit, EPS Growth, Current Ratio etc. In Qualitative Analysis mostly the Intangible items like Management Quality, Fraud Check, Credit Rating, Sector Growth Prospective, Market Biases, Economic Moat etc. are analyzed. Quantitative Analysis can be done by Computers, but Qualitative Analysis requires People.
  5. Focus on the Earnings Power of the Company Ensure the company’s Earnings Power is Positive. The Earnings of a Company is determined by the Net Profit divided as Earnings per Share, Dividends Distributed & Asset Value. The EPS should be checked for the Present, Past & Projected Future EPS too. Check the Dividend Record of the company. Often in Indian Stock Market when we deal with Microcap companies, there could be companies who report High Net Profits but their Dividend payout may not match it. These are signals of possible Frauds.

THE INTERPRETATION OF FINANCIAL STATEMENTS

Here is the Diamond Summary of the Book THE INTERPRETATION OF FINANCIAL STATEMENTS.

The book is written by Mary Buffet who is Daughter-in-law of Warren Buffet. In my view, this book is better than the Warren Buffet Way book because it allows easily implementable patterns.Warren Buffett is still the Top Investor in the World & thus his Principles are definitely to be learnt & applied in your investing life. The book focuses on the Importance of Analyzing Financial Statements & Deriving valid conclusions on the company based on the Interpret Financial Ratios below.

  • Durable Competitive Advantage is the Key of Successful Multibaggers which Warren Buffett selects. The Durable Competitive Advantage is something which gives the Company upper hand than the competitors. For example in the Winning Pick of Warren Buffett which is Apple Inc, the Brand Loyalty of the customers is considered as Durable Competitive Advantage. Even though Apple Products are Not Innovative in the market still they can Command higher price thereby earning more profits & growing every year with new product releases. Economic Moat is Synonymous with Durable Competitive Advantage.
  • Operating Profit Margin is a Core Financial Ratio which Warren Buffett looks for & Ensure it is greater than 40%. He believes if the Operating Profit Margin is greater than 40% then the company is enjoying Huge Economic Moat / Durable Competitive Advantage.
  • Net Profit Margin is a Related Financial Ratio which Warren Buffett uses. He prefers to have Net Profit Margin greater than 20%! As you know Net Profit is Operating Profit after Deducting Taxes, Depreciation etc.
  • Sales Growth Warren Buffett prefers to have companies with Sales Growth above 20% every year. By applying Power of Compounding the company can reach 300 Times in 20 Years time period applying the Capital Growth and PE Resizing due to Blue Chip Formation, Mutual Funds Investing etc.
  • Customer Bargaining Power Mary Buffett mentions that Warren Buffett prefers to stay away from Businesses which give the Customer a lot of Bargaining Power. For example take Airlines sectors where repeated business is not possible as Customer switches the Airlines based on Price Offers. As per Buffett, these businesses will have Low Operating Profits compared to other businesses.
  • Hold Forever The holding period of Warren Buffett is basically forever. He is holding Coca-Cola for last 50 years enjoying the Capital Growth & Dividend Income. Buffett says if you don’t feel comfortable owning a stock for 10 years, you shouldn’t own it for 10 minutes. 
  • Repeated Buying Another notable point of Warren Buffett is that he will be buying more on the Stock whenever it is crashed in a Bear Market. As per Warren Buffett you have to Eat more Potatoes when Potatoes are selling at discount.
  • R&D Expense If a company is spending too much on R&D it means the Industry is very Competitive in nature. Warren Buffett prefers to stay away from such companies as he believes down the line the company is heading for bankruptcy. For example, High R&D was the reason Warren Buffett stayed away from Intel Corporation the Tech Computer CPU Giant.
  • Interest Expense If the company is having High Interest Expense it means the company is in Capital Intensive sector & Warren Buffett prefers to stay away from those business. As a note, Banking & NBFC companies have High Debt thereby increasing the Interest Expenses. In these cases the following Financial Ratio is important.
  • Interest Coverage Ratio This ratio ensures that the company is having enough money from the Net Profit to pay back the Interests. Of the order of 2 Warren Buffett is okay with the company. Interest Coverage Ratio 2 means the company can afford to pay back twice of the Interest from the Net Profit generated.
  • Cash in Hand Warren Buffett wants to see More Cash in the Cash Flow Statement. He thinks More Cash is a Visible Sign that the Company is having growing Reserves.
  • Reserves & Surplus should be Increasing every year & Warren Buffett ensures that the Reserves are Not growing through Bond Selling or Debt Increase. Otherwise the Company is termed Credible.
  • Inventory Warren Buffett likes to have companies with Growing Inventory par with Growing Sales. This ensures that the Sales figures are credible.
  • Capital Expenditure He prefers to have companies with less expenses Capital Expenditure. If the Capital Expenditure is less than 25% of the Net Profit then it is a Good Durable Competitive Advantage company.
  • Current Ratio Warren Buffett prefers to see companies with High Current Ratio above 2. Current Ratio is the Current Assets divided by Current Liabilities. Current Assets are the Sales generated from Customers & Current Liabilities include the Expenses like rent, salary, supplier payment etc.
  • Dividend Warren Buffett prefers to have Less Dividend paying companies as he thinks the Company can Re-invest the Dividends in Growth of company which will Increase the Value tremendously in the future years.
  • Share Buybacks If the company is buying back its own shares then Warren Buffett likes that company as the EPS is growing. For example, Microsoft is such a stock in US which buys back its own shares.
  • ROE Return on Equity is another Important Ratio which Warren Buffett looks for. He prefers to have 12% above returns for the ROE ratio as according to him A Good Company will use its Money Wisely & Offer higher Returns to the Equity base. His favorite stock Coca-Cola was earning ROE of 30% every year for the past 3 decades.
  • Intrinsic Value is the Core Formula used by Warren Buffett to find the Value of the company. This formula & examples are well defined here.

NOTE We Futurecaps is a Fan of Warren Buffett since last 12 years. All our Multibaggers are created based on Warren Buffett Checklist. Coupled with Warren Buffett Strategies of Long-term Investing, we were able to Invest heavily & Generate 1000% like returns along with Peaceful Sleep. Be a Member of our Premium Subscription to follow the Path of Warren Buffett!

FREE EDUCATION

PURPOSE OF INVESTING

WHY INVESTING IS REQUIRED?

Your Savings is undergoing 5% Inflation every year.. So Investing is required to Protect your Money!

LACK OF MONEY IS THE PROBLEM OF WORLD!

As some genius said, Lack of Money is the Problem of World.. We are living in a Money Controlled World!

Let us see how “Lack of Money” is your problem too..

Most of Our Life Aspects are Controlled by Money

  • We went for college education yesterday to earn money
  • We are doing job today to earn money

But there is a problem in this System. All these money making is depending on the Uncertainity on Economy, Skill to perform etc. The current corona times would have iterated this that even the Wealthiest person would have Money problem to meet their expenses.

So the Primary problem an Investor should Address is INCOME!

So we need to make Income Passively!

PURPOSE OF INVESTING

The PURPOSE OF INVESTING is to Make Money passively. This is to solve your current Or future “lack of money” problems.

There are mainly 2 Types for Investing:

  • Wealth Creation
  • Income Generation

Let us see what each one of these are..

WEALTH CREATION

wealth

Here you will be focusing on Amassing Wealth for Rich Outlook in the form of Money, Properties, Luxury Cars, Yachts etc.

Stock Market is Apt for Wealth Creation!

Stock Market helps Wealth Creation through Capital Appreciation.

Stock Market provides 50% ROI per year on average – compared with 8% of Fixed Deposits

Example: Infosys Investor gained 50000% returns in 20 years making ROI of 50% above per year.

Note: In Stock Market investments you will not be controlling the performance of your stocks.  The stocks will perform based on their Management & Promoter decisions.

INCOME GENERATION

Income

Here you will be focusing on Generating Income for Financial Freedom so that you can quit your monotonous job, have more family time, can go for world trip etc.

Stock Market is NOT for Income Generation!

Even though Stock Market provides dividend incomes it will take really long years to generate necessary income for financial freedom.

The best Investment Vehicles for Income Generation are:

  • Real Estate Rentals
  • Fixed Deposit Interests
  • Loan Money Interests

Note: In these investment vehicles you can control some of the performance of your assets.  In this way you can Increase the ROI on it.  

HYBRID APPROACH FOR FINANCIAL FREEDOM!

So how to solve the INCOME problem if Stock Market is for Wealth Creation?

The solution is HYBRID Approach!

futurecaps 5year financial freedom through stock market

How our Client achieved Financial Freedom in 5 Years!

Many of you will be surprised to hear that Financial Freedom is possible in 5 Years!!

During 2012 one of our Client started investing in stocks with a Capital of Rs. 30 Lakhs. He was buying, holding, re-buying & shuffling the Multibaggers for around 5 years to gain 300% Returns!! (remember the Fixed Deposit ROI will be only 50% for the period)

Now he got his Wealth zoomed to around 1 Crore! As you know, putting the money on Bank will generate only 10% Interest. As you know he cannot be Financially Free with Rs. 1 Lakh. This is because there is No Growth in the FD Income to tackle Inflation.

Here we advised him to switch to Real Estate Commercial Properties. This was to gain Rental ROI of 20%. (remember the Rental Yield ROI on India residential properties is only 3%)

After doing the Construction Activities for 2 Years, he was able to Generate a Rental Income of Rs. 2 Lakh per month!!

Thus Financially Freedom was achieved in 5 Years!

Now he is free from the Income Problem of Money. As you can see Stock Market was used to Create Wealth & then Income problem was resolved.

What is your Goal?

Before proceeding further please decide yourselves what is your goal in stock market!

LONG TERM INVESTING

In Futurecaps we focus only on LONG TERM INVESTING along with WARREN BUFFET Strategies!

Following are the Justifications on LONG TERM INVESTING.

  • Stock Market is a place where Entrepreneur can raise money from Investors. The Investor will gain back Profits through Capital Appreciation & Dividend Income
  • Long Term Investing is the only method to gain that level of Returns like 30X, 100X, 300X etc.
    • Infosys provided 500X returns for 20 year investing period
    • V-Guard provided 30X returns for 10 year investing period
    • Cera provided 10X returns for 7 year investing period
  • Long Term Investing is really passive which requires Little actions & attention whereas:
    • Day Trading & Short-term Investing requires more thinking, analyzing & actions making it an Active Job

Long Term Investing have the following Theories:

  • NO stop loss in long term investing
  • BUY more stocks on price crash
  • Focusing on growth stocks ensures NO loss in long term
stock market long term strategy

Following are the Justifications on WARREN BUFFET Strategies:

  • Warren Buffett is the Living Legend of Value Investing
  • Warren Buffett invests only in Clean & Growth companies (Growth Investing)
  • Warren Buffett ensures he is not paying high for the stock (Value Investing)

Why not Day Trading?

If you go with Day Trading & other stuffs you are not using Stock Market for the right purpose & more chances of losing money too. Day Trading is encourage because Tip Providers, YouTube advisors, Brokers & Government earn income through you.

Why not Mutual Funds?

You have NO Control on how your money is managed, how efficient your fund manager is. Also, mutual funds have restrictions on certain capitalization of stocks so the returns will not be par with Smallcap, Midcap returns we invest here.

Summary

All these makes your Direction right with Stock Market Investment and that too Long Term with Warren Buffett strategies. This will yield you to Success!

SECRETS OF RICHES

If you would like to be Wealthy & Financially Free, then you should Follow the Secrets of Riches!

Here are few secrets of riches after observing & interviewing many of the Celebrity Investors.

MONEY WORKS FOR THEM

Riches are just Money Managers. They make sure Money works for them. Then they focus on their Passionate Job aligned with Money Growth.

APPR. ASSETS

Riches are always in look for Appreciation Assets so that they can Grow & Stay Rich!

Riches always keep the Spirit of Living by buying Luxury Cars & Mansions, but ensure their remaining Appreciation Assets covers the Depreciation caused by the luxury toys.

THINK IN PERCENT

Riches makes the Evaluation & Investment Decisions on Percent.

Most average investors over there talks in rupees.

ROI 20%

ROI 20% is the Path to Riches. They ensure the money allocated to work for them are gaining 20% or more returns annually.

HOME & CARS %

Riches love Luxury but keeps their Home & Cars under 10% of their Total Assets. In this way they ensure the 90% of Money is put to work for them & earn more wealth & prosperity.

INSURANCE

Riches chooses Appropriate Insurance Protection. They minimize the impact of losses in health, money & business through Insurance. Term Insurance are better than Endowment plan for life insurance.

TAX OPTIMISTIC

Riches handle Taxes carefully. They in-turn master Tax Returns and generate High ROI on Investment through Taxes.

LOAN SHARKS

Riches play shark with Loans. Riches only take Loans if the ROI is higher than the Interest Rate. In this way they leverage loans to grow richer faster.

You can Refer more about Riches here.

IDENTIFY A MULTIBAGGER

Now you have the Purpose of Investing & Protection from Wrong Ways of Loosing money, you are positioned to do the next action. IDENTIFY A MULTIBAGGER!

GROWTH CHECK

Growth Check ensures the company & underlying sector is positioned for growth in the next 5 years to 20 years period of time.

As said before, Information Technology during 2000 was a Growth area. It created 1000 & 10000 X multibaggers during the last 20 years. We need to find out such growth sectors.

futurecaps multibagger growth sector
futurecaps multibagger growth sector

As part of the Growth aspects in Multibagger Checklist we use the following Ratios:

Sales Growth

Check the company is having 15% Sales growth for the past 3 years & more.

Consistent Sales Growth ensures that the Company is good in their business, there is a growing customer base & probably returning customers also.

Note: Returning Customers is one of the Key aspect of all Growth business.

Example: Infosys had returning customers through Long-term Account contracts.

Page Industries had returning customers through Brand addicted customers.

EPS Growth

Once the Sales Growth is ensured, we need to check the EPS Growth too.

EPS says the Earnings per Share – that is how the Company is converting the Sales to Profits & Allocating to Per Share.

EPS Growth of 15% above is Good.

Note: You can use Screener Tool for viewing the Company Ratios. Example Screener

VALUE CHECK

Growth Factor alone cannot yield you to Success. You need to check the Price also. Here comes the Value Check!

Value Check ensures you are NOT buying a Maruti at the cost of a BMW!

Here you calculate the Intrinsic Value of the company using Growth parameters. Then you put a Discount of 30% on the Intrinsic Value to determine the Fair Value.

If the Fair Value is Greater than Market Price of the company, it is a Good to Buy stock!

value investing

For example let us take HDFC bank example which is a bluechip darling of lot of investors. HDFC at Rs. 900 is having EPS Growth of 20% in 2020.

The Intrinsic Value of HDFC Bank is Rs. 1200

The Fair Value is at Rs. 850 with 30% Margin of Safety!

Thus the Current Market Price is Over-valued to Buy the Stock to give Multibagger Returns.

At the same time, If the Price crashes to Rs. 500 levels then the Valuation will be good to Invest in.

You can play with our Intrinsic Value Calculator here.


DEBT CHECK

Debt can give you good leverage. But it can kill you too during tough times. This is the reason Successful Investors like Warren Buffett stay away from High Debt companies.

Companies with High Debt will face difficulty during Economic downturns to pay back the Interest & thus leads to defaults.

You actually need to hold the Multibagger for 5 or 10 or 20 or More years!

debt is killer

As you know in Stock Market, a growth company will get 10X valuations & a defaulting company can be thrown to ashes in no-times. So it is Important for a Multibagger Investor to ensure the Debt is low or zero.

The Ratios to look over here are:

Debt Equity Ratio

Shows how much Debt is allocated on Shareholder’s equity. Lower the better. Maximum 0.4 is advised.

Example: A debt of 1 means there is 100% Debt = Rs. 1 Debt on every Rs. 1 share.

Note: Banking & Finance companies have Higher Debts as their core business is of borrowing money at low interest & selling out for more interest.

Interest Coverage Ratio

Shows how many times the Company can pay the Interest on Debt based on it’s debt.

Higher the better!

Example: If the debt is 100 Crore and the Profit is 200 Crore, the Interest Coverage Ratio will be 2!

Note: Wonderla Holidays is a Zero debt company. After the Corona troubles if you can enter the company at a lower price, It could be a Multibagger!

INTEGRITY CHECK

Integrity of the Management is important to really give you a Multibagger returns.

Often times, the Management will be Crooked enough to Think Selfishly & Fraud on Accounts to Channel Profits to the Promoter accounts thus cheating Shareholders.

If you enter such a company, your chances are less to get successful as an Investor.

integrity honesty values

You can do a Fraud Check on Google on the Promoter, Past News, Glassdoor on how they Treat their employees, P&L on proof of dividends & taxes etc.

As an example, we can see Narayana Murthy is a Top Admired CEO of all times – he was careful enough to reduce the costs, optimize profits & give back Superbagger returns to the stock investors.

We need such kind of Promoters!

More on Multibagger Checklist here.

WARREN BUFFET WAY

Here we can provide you the Key Ratios & Parameters which Warren Buffett uses which Futurecaps inherited to Identify Multibaggers like Cera, Wim Plast, Manappuram etc. in the past.

UNDERSTAND THE BUSINESS

Never invest in a company if you do not understand the business very well. Warren Buffett says you should buy the stock like you are buying the company. Feel it!

SALES GROWTH

The company should be having 20% above growth every year. This proves the company is in a growth sector, increasing demand for the products, returning customers exists & probably a good brand too.

PROFIT GROWTH

The profit growth should also reflect the 20% as sales growth.

PROFIT PERCENT

The profit percent should be 20% above to ensure an efficient company.

PE RATIO

The PE Ratio for the company should be moderate as per the sector. For higher PE companies there should be additional check for PEG Ratio below.

PEG RATIO

PEG Ratio ensures the High PE is justified for a high growth company.

BUY if PEG < 1

HOLD if PE > 1 & < 2

SELL if PEG > 2

EPS

EPS is Earnings per Share. It equates the Profits to outstanding number of shares.

EPS Growth

Ensure the EPS is having 20% above growth.

BOOK VALUE RATIO

Book Value is the Value of company as per the Financial Records. Ensure the Book Value Ratio is < 5 for a growth company. Else it is a high-priced one.

DEBT EQUITY RATIO

It show the Debt the company have. Ensure it is below 0.2 for most companies. However Finance companies will have high DEBT EQUITY RATIO where one should look for INTEREST COVERAGE RATIO mentioned below.

INTEREST COVERAGE RATIO

This is the Capacity of company to cover the Interest expenses. Higher than 2 is recommended.

ROE

Return on Equity should be higher than 20.

PROMOTER HOLDINGS

Promoters Holdings shows the Promoters Confidence int he company. Ensure it is above 40% & also Increasing in recent years.

INTRINSIC VALUE

It is the Core Formula which identifies the True Value of the company. Then compare it with Current Market Price of the company to make Buy/Hold/Sell decisions.

You can play without Futurecaps Intrinsic Value Calculator here.

MORE FORMULAS

Also there are More Formulas we Internally use to come to a Multibagger Decision. Totally we have a 100 Point Checklist. You can Subscribe our Multibagger Plan use to learn more.

SCREENER

You can use Screener the Best Tool for Indian Stock Market for your Research purposes.

PORTFOLIO THEORY

Now that you Identified one Multibagger Stock & Wanted to Invest in them. There we come with the next warning: You should not invest in just one or two companies.. You should have a Portfolio!

Why Portfolio?

Fund Managers uses Portfolio to manage the investments. Portfolio ensures your Investments are diversified enough so that any problem to a paritcula sector will not cause all your eggs to be broken.

Example: Airline sector during Corona impacted very badly.

All Celebrity Investors like Dolly Khanna, Ramesh Damani uses Portfolio Theory which ensures.

10-20 Stocks

Keep around 10-20 stocks in your Portfolio. Rotate the stocks – add new, remove few every year after ensuring the Intrinsic Value.

MONTHLY SIP

Ensure you buy stocks continuously in a Monthly SIP manner so that multiple highs & lows are absorbed.

70:30 RATIO

Warren Buffett keeps 70% in stocks and 30% in bonds. This provides him Emergency Fund & also capital to invest during bear market.

AUDIT

Portfolio Managers ensures they Audit their holdings, buy-sell-hold decisions every Quarterly & so forth.

BEAR MARKET HANDLING

This is another important skill you should be having to be really successful in stock market!

BULL MARKET anybody can win!

BEAR MARKET victory really matters!

BEAR MARKET is an essential part of economy & thus part of stock market too.

ECONOMY

Economy goes through cycles of boom, bust & recovery phases. Periodically it resets itself to remove the weak ones out of business & reward the good ones.

Bear Market usually last for 1-2 years in Stock Market. Bear Market usually appears every 8-10 years. As you can see from history – there were Bear Market during 2000, 2008, 2018 & 2020.

WHAT YOU SHOULD DO IN BEAR MARKET?

You should BUY new multibagger stocks which are growth sector positioned & having low in debts. In this way you can enter at lower price & exit them at higher price during a Bull Market.

Note: You can use Intrinsic Value calculation to perform the Enter/Exit decisions on the QR/Annual results.

You should be Investing continuously in Bear Market based on Intrinsic Value Calculation & Portfolio Limit per stock. After 2 years there will be No Loss in Bear Market Portfolio.

stock market long term strategy 1

WHAT YOU SHOULD DO IN BULL MARKET?

You should do the Opposite during Bull Market. In Bull Market the prices will be irrationally high compared with their Intrinsic Value. In this case you should sell the stocks & park money in debt funds.

Note: During 2018 period we Alerted all our Paid Subscribers to Sell their stocks & Exit at peak. We have Economic Barometers to measure the Bull/Bear Market period & make decisions.

More on Bear Market Handling here.

INVESTOR TOOLS

Introducing few Investor Tools.

Tool#1 Screener

Screener is the Best Value Investor Tool for Indian Stock Market. We use it almost daily for Screening, Evaluation, Notification etc. Following are Important ratios we use:

  • PE Ratio
  • PB Ratio
  • EPS Growth
  • PEG Ratio
  • Intrinsic Value, Fair Value, Discount
  • Debt, Interest Coverage Ratio

Be sure to add enough Ratios & Alerts for your research. Contact us if you need custom ratios we use.

Tool#2 Intrinsic Value

Intrinsic Value is Important Investor Tool to find whether your Stock is undervalued Or not.

Intrinsic Value is an Ongoing decision maker Tool used for:

  • Making BUY Decisions
  • Making HOLD Decisions
  • Making SELL Decisions

All Professional Investors out there including Billion Dollar Investment Guru Warren Buffett uses Intrinsic Value.

You can use our custom made Intrinsic Value tool for India. LINK

Tool#3 ROI

ROI is KING OF CALCULATIONS!

The purpose of ROI is to ensure you are not loosing money!

All the Top Investors & Business Owners like Warren Buffett, Mukesh Ambani, Bill Gates, Ramesh Damani are ROI Masters. They make all the business decisions considering the ROI!

To be a successful Investor you should become a Master in ROI calculations in all aspects – stock market, real estate, career, hiring, other investments etc. Here is one article & calculator we have created for same.

As part of the ROI Parade – You should:

  • Reduce Depreciation Assets
  • Remove Investments less than 15% ROI (except EmF)
  • Decide Rent vs Buy based on ROI Calculator
  • Ensure Net Worth ROI is around 20% for Fast Rich Path

Tool#4 Audit Excel

As a Professional Investor, you are NO Lesser than a Mutual Fund Manager. So you need to perform Audit every Year & get it Signed from Stakeholder! Audit Excel is the Investor Tool!

  • Assets | Appreciation % | Depreciation %
    • Real Estate
    • Paper Assets | Stocks | Fixed Deposits
  • Liabilities
    • Car Loan
    • Advances Received
  • Goals
    • Wealth Goal | 1 Year | 5 Year | 10 Year
    • Income Goal | 1 Year | 5 Year | 10 Year
    • Emergency Fund | 1 Year
  • Investments
    • Stocks
      • Company 1 | Reason to Buy | Buying Period
      • Company 2 | Reason to Buy | Buying Period
  • Will | Bank Information | ROI | Stake Holder Signature

Tool#5 Auto Reminders

As I said before, Stock Market Investing is a Passive business! You will get results without Actively managing it. You will be only working few hours over weekend Or decision times like bull peak / bear bottom period.

So the major challenge all investors facing are:

  • How to remember Monthly SIPs?
  • How to remember Buying Reason for a Stock?
  • How to automatically get Price Alerts for buying/selling?
  • How to remember the Stock Market Strategies every year?

You can use the following tools to achieve the same:

  • MemotoMe.com for automatic reminder setting up – monthly, quarterly, yearly etc & on stock & strategy notes
  • Viewstocks.in for setting price alerts

Without these auto-reminders a newbie investor may forget the core principles & fallback to the average amateur crowd.

Tool#6 Mind Power Programming

This is mostly an unknown Investor Tool & most of you would be hearing it for first time.

Mind Power Programming is the Core Factor for Success in any fields. The human mind is the connection to universal mind aka god. You have to fill your mind with Thoughts & Desieres – so then the universal mind will provide energies & situations for you to achieve the same. So this is a Full Time Thought!

Example: If you wanted to be a Successful Actor – You have to Program your Subconscious Mind on Becoming like Celebrity Actors, Practicing Acting, Controlling Emotions etc.

Similarly, If you wanted to be a Successful Investor – You have to Program your Subconscious Mind with Investment Thoughts, ROI on all aspects, Long Term Vision etc.

We are providing a Sample Mind Programming MP3 file which you can request here.

INVESTOR ACTIONS

LESS STOCK ACTIONS

You should perform less stock buy/sell actions. Preferably monthly 1 or 2 actions.

It should be Passive Investing for Long Term.

MORE KNOWLEDGE ACTIONS

You should learn more books, attend sessions on Value, Growth Investing as well as upcoming sectors.

WATCH RESULTS

You should keep focus on the Quarterly results of the company. Plus, you should completely read the Annual Reports too.

Note: Keeping stocks minimal will enable you to reduce the number of annual reports.

MASTER MIND GROUP

You should join a Master Mind Group to hydrate yourself with valuable updates on stocks & overall markets.

Note: Futurecaps provide a Free Master Mind group for Paid subscribers.

AUDIT EXCEL

You should use an Audit Excel sheet to manage your portfolio, note down the buy/sell/hold decisions.

You should share this with your life partner to continue the investment decisions.

TEST YOUR KNOWLEDGE

TAKE THIS FREE QUIZ AND GET REWARD WORTH RS. 2999!

Stock Market Investing is a Course!

Just like any other Course like MBA, you are Required to Learn the Inner-Workings to be a Successful Stock Market Investor. Otherwise, you may loose your hard-earned money & time through short-term investing, day-trading etc. which are just traps.

INTRINSIC VALUE

Intrinsic Value is an Essential Formula used by Value Investor to make Billion Dollar decisions. (Warren Buffett uses same)

Intrinsic Value Formula

intrinsic value tool

Intrinsic Value Definition is created by Benjamin Graham the Guru of Warren Buffett in his book Intelligent Investor.  The formula is helpful in Evaluating stocks which have projected growth rate.

Intrinsic Value helps to find the Current Value of the stock after Calculating the EPS Growth for next N years.  This is a Moving Calculation!

To calculate Intrinsic Value you require the following:

  • EPS – Earnings Per Share (eg: 50)
  • G – Growth Rate for next 10 years (eg: 20%)
  • Y – No-Risk FD Returns (eg: 10%)

Note: The No-Risk FD Returns shows the Alternative Investment Opportunity

Intrinsic Value

Intrinsic Value meaning is the “Real Value” of the company based on its EPS & Growth Rate. More the growth, More will be the Intrinsic Value.

For example: A stock with EPS 50 and Growth Rate 20% will be having an Intrinsic Value of Rs. 1300

Margin of Safety

Margin of Safety is the Percent(%) you deduct from the Intrinsic Value to have a Cushion.  More the Margin of Safety – More the Cushion you have!

no margin of safety is dangerous intrinsic value I   no airbag

Warren Buffett keeps 20-30% Margin of Safety on his new buys. As he buys in Billions of Dollars the Intrinsic Value Margin of Safety protects him from short-term price crashes of the stock.

Margin of Safety differs for each class of stocks:

  • For largecaps (bluechips) the MoS can be 20%
  • For midcaps & smallcaps the MoS can be 30%

Fair Value

Fair Value is the Intrinsic Value – Margin of Safety

In above example, Rs. 1300 – 30% = Rs. 910 is the Fair Value

It means if you get the Stock at Rs. 910 or less will be a Good Deal.

Practical Example – Page Industries

Let us say your friend is advising to Buy Page Industries.  You will put the following values as per 2020 April data on Screener.

  • EPS 350
  • Growth Rate: 10% (based on past 3 year average)
page industries intrinsic value

After submitting above values in our Intrinsic Value Calculator, You will get the Intrinsic Value as Rs. 5400

On Margin of Safety of 20% (for bluechip companies the MoS can be lower)

You will get the Fair Value as Rs. 4000!

Decision: The CMP of Page Industries is Rs. 18000.

Here the CMP is lesser than Fair Value.

SELL!

Practical Example – Manappuram Finance

Manappuram Finance is another Good Example of Value Investing using Intrinsic Value. You can open the company details using the link of Screener.

image 11
image 11

You can find the following values from there:

  • EPS 18.67
  • EPS Growth as 25% (3 Year Average)

After submitting the values in our Intrinsic Value Calculator you will get the following:

  • Intrinsic Value as 819
  • Fair Value as 573

As of today the CMP of Manappuram Finance is

  • CMP 160

Now you can Infer the following:

  • Fair Value > CMP

BUY!

VALUE STOCKS INDIA

You can visit the Value Stocks India link here.

FOLLOW US

You can Follow us to get Notified on FREE Multibaggers & Knowledge Blogs.

MORE EXERCISES

Now you can perform the following Intrinsic Value Exercise using Screener LINK.

Intrinsic Value of Blue Chips

  1. Find Intrinsic Value of HDFC Bank
  2. Find Intrinsic Value of Infosys
  3. Find Intrinsic Value of Reliance Industries

How much Margin of Safety you found there on each?

Intrinsic Value of Midcaps

  1. Find Intrinsic Value of V-Guard Industries
  2. Find Intrinsic Value of Caplin Point
  3. Find Intrinsic Value of Hester Bio-sciences

How much Margin of Safety you found there on each?

Intrinsic Value of Smallcaps

  1. Find Intrinsic Value of Globus Spirits
  2. Find Intrinsic Value of Dolat Investments?
  3. Find Intrinsic Value of Hester Bio-sciences

How much Margin of Safety you found there on each?

Inference

As you can see the Margin of Safety is Less going from Smallcaps to Midcaps to Bluechips!  This is the reason Futurecaps is never recommending any Bluechips as the Intrinsic Value is Low & they will only give Low Returns & thus not suitable for Wealth Generation.

Pro-Investor Tip

You can make the 3 Important Decisions based on Intrinsic Value – buy, hold & sell.  We recommend you make the decision every Half-yearly or Yearly based on the Results of the stock.  

BUY If CMP < Fair Value

HOLD If CMP between Fair Value & Intrinsic Value

SELL If CMP > Intrinsic Value

INTRINSIC VALUE CALCULATOR

You can use this Real Intrinsic Value Calculator here. Go to Screener.in to collect the EPS & EPS Growth Parameters for your company. Enter those values here. Just keep the other values untouched. Then immediate you will get the Intrinsic Value of your company.

 

WHY STOCK MARKET IS BETTER THAN FIXED DEPOSITS?

Fixed Deposits on Average provides only 8% Interest. Compared to the Indian Inflation Average of 5%, You are ONLY getting 3% Returns. This is good only for Old-age people Or Poor-class who wish Not to take any risk.

If you are looking to become Rich, then Stock Market gives Returns of the order 30-50% on Average. But you should be be Undergoing the Right Education on Stock Market else you will loose time & money. MASTER MIND TRAINING

[Master Mind Training is the ONLY 12 Investing Lessons you need in your Life. Without it you will Learn all Garbage knowledge out there destroying your capital, time & confidence]

WHY STOCK MARKET IS BETTER THAN REAL ESTATE INVESTMENTS?

In real estate, a flat investment may provide only 8% returns. (remember, building is a depreciation asset)

In real estate, a plot may provide only 15% returns. (remember, land is an appreciating asset)

Plus, real estate have more issues like registration costs, no easy liquidity, regular monitoring, maintenance efforts, political biases etc.

Stock Market is the Best Vehicle to provide you 30-50% Annual Returns which Real Estate cannot provide. This is the Reason all Top Riches in the World have parked their money in Stock Market. If you wanted to be Super Rich then Stock Market is the way!

WHY DIRECT INVESTING IS BETTER THAN MUTUAL FUNDS?

Mutual Funds have Limitations over Direct Equity Investing. This is the Reason Warren Buffett also said that Retail Investor can Gain Double Return than the PMS / Mutual Funds.

If you Take the Returns of Best Smallcap Mutual Fund in India which is SBI Smallcap Fund you will see it only returned 40% from March 2020 till Date of Sep 2020. Meanwhile, the direct equity investors gained 100-300% portfolio returns. How is that possible?

Following are the Reasons why Mutual Funds underperform:

  • They can Invest only in Limited Stocks due to Capitalization, Rating Range – due to this they will loose the Big Multibaggers
  • They have 2% Annual Maintance Charge which corrodes the the Asset under Management – In fact this 2% could have given another 100-200% returns over years
  • They have Limitation on Buy/Sell actions which will make them Exposed to the Bear Attacks – During 2017-18 Futurecaps alerted our customers to Exit the stocks at peak thereby saving Capital & Confidence – But MFs have to sit tight & get the hit on face

All the above are the Reasons why MFs under-perform.

Being a Futurecaps Client you will be paying only Rs. 5000 per year on Multibaggers Buy/Hold/Sell actions. This will be less than 1% if you are holding a 5 lakh portfolio & less than 0.1% if you hold a 50 lakh portfolio.

GOLDEN RULES OF VALUE INVESTING

However, you need to learn the right ways of direct equity investing. JOIN Our MASTER MIND COURSE to be a Pro-Investor.

10000% is the Real Returns

Stock Market is created for Wealth Creation! The Real Gains are 1000-10000% and More. eg: Infosys, Reliance, Eicher, Cera etc.

You can Gain Crores out of Stock Market through Discipline, Multibaggers, Long Term Investing & Portfolio Management strategies.

So do not use it for Silly Gain methods like Day Trading, Futures & Options, IPO Investing etc. Read more.

Focus for Long Term

Stock Market is a place where the Company requires Multiple Years to Expand & Zoom Wealth through Power of Compounding. The Standard Returns is 300-500% Range for a 5 Year Period which is 1000-2500% for a 10 Year Period.

The compounded price growth happens through company growth, capitalization growth, investor attraction, mutual fund participation, PE resizing etc.

Above 2 Years No Loss!

So 1 Lakh Saving could become 25 Lakhs in 10 Years – Save Money, Invest Money! [So by wasting Rs. 1 Lakh you are loosing Rs. 25 Lakhs]

Understand your Risk Capital

Stock Market is risky in the short-term. So find out your Risk Capital – the amount of money you are okay to see as loss.

If Rs. 1 lakh is your Okay Level then in Smallcap/Midcap Portfolio can crash up to 50% – So Rs. 2 lakh is your Risk Capital.

In this way you will be having peaceful sleep even during bear times.

Chalte Chalte.. you will gain knowledge, experience & increase your Risk Capital levels.

Strategy: Another way to Increase your Risk Capital is to find the under-performing assets like plots, buildings, low paying career & upgrading them for higher money – so whatever money earned is Free now to invest in stocks. There are strategies to 5X your Savings given to Paid Subscribers.

Invest in Growth Stocks

One should take care in Identifying Growth Stocks with Huge Economic Moat. This will ensure you the Future Profits of your portfolio.

Moat is a differentiation to the Competitor. Moat ensures high price, returning customers.

Example: Warren Buffett went with Apple not seeing the Technology but the Loyal Customer base as the Moat who are ready to pay the premium purcahse price.

Take Less Actions

You need to Take ONLY less actions to be a Successful Investor.

Example: Warren Buffett

Valuation is an Art

Valuation is an Art! Master It with Intrinsic Value Calculation, Sector Growth, Economic Moat, Multibagger Checklist, Economic Analysis etc.

Spend 1-2 hours per week on learning rather than taking stock market actions. Stock Market gives more returns than your Career if you Learn it properly. MASTER MIND TRAINING

Portfolio Returns Matters

One stock giving 1000% doesn’t matter if you have other stocks dragging the portfolio down!

Total Portfolio Returns matters!

Synonymous, you have to check your Net Worth Returns also. If your Net Worth consists of Real Estate, Gold, Bonds, Mutual Funds etc. which are mostly Under-performing than Inflation Or of Low-Returns then Just your Stock Portfolio performing doesn’t matter.

Total Net Worth Returns matters!

Rich People have Net Worth Returns > 20%!

Keep Maximum 12 Stocks in Portfolio

This will bring down the Management Cost of your Portfolio & Gives ample time to Track Quarterly Results & Read Annual Reports of the companies.

The Top Investors like Warren Buffett, Ramesh Damani keeps above Portfolio Limits.

If you have more stocks to manage, I would recommend Maintain 2 Portfolios.

Cash Position Matters

Portfolio Theory enforces the Need of Cash Position as It will also Play equal role as Multibaggers!

Cash Position allows to Utilize a Bear Market Opportunity completely which will Improve the Overall P/f returns.

Stock:Cash Percentage is recommended as:

70:30

50:50

30:70

(depending on the market valuation)

Do not Follow Day Traders or Short-Term Investors

Traders are in different mode of operations & most of them gain very less returns compared to a Long-Term Investor.

Do not copy the Traders abrupt terms like stop-loss, target etc. You will not reach anywhere. Traders are Looted!

Remember, you entered Stock Market seeing Big Riches like Warren Buffet & Ramesh Damani. Why would you follow the amateur traders?

Buy, Hold & Sell

Buying should be carefully done based on the Multibagger Checklist & Comparing at least 2 Years of performance.

Hold should be minimum for 5 Years.

Sell should be based on Intrinsic Value of past 5 Years.

Buy in Installments

Value Investor BUY in Installments!

It allows to scoop stock at average price.

For example: Buy for 70% as first installment & remaining as equal monthly installments for 3-6 months.

Repeat the Buy

Value Investor like Warren Buffet Repeats the Buy for few months, quarters & even years too. They will do this even when the stock price went up or down. This is because the Intrinsic Value gets upgraded based on results.

So stock is not just 1 time buy; but repeated buy;

In this way your P/f limit will also be maintained.

Buy on DIPS!

Value Investor BUY on DIPS! You should be Allocating like 1 Lakh for 500% Multibagger and 2 Lakh for 1000% Multibagger – in this way when the stock price halves you can happily double the investments.

For example, a stock is priced at Rs. 100 with Target Value Returns of 500%. On 50% crash the stock price is a BARGAIN BUY for 1000% Returns!

Remember, if you selected stocks which are Growing, Low Debt, Good Promoter with the Multibagger Checklist, then it will serve as your Insurance!

Conduct Yearly Audit

Conduct Yearly Audit of your Portfolio to Identify the Income, Expense and ROI of your Investments. Remember ROI is King!

You an also Add/Remove the Stocks from your Portfolio based on the Performance.

Ensure Minimum 20% Returns

You should be Alert if your Portfolio is Returning less than 20% Annually for more than 2 years – If your returns are less then you should have parked money in real-estate or fixed-deposits. Exclusions are Bear Markets!

The Standard Returns we expect from Direct Stock Market Investing is 300-500% for 5 Years which comes around 30-50% annually.

Bear Market is Opportunity

Value Investor sees Bear Market as an Opportunity! The Rich Investors uses Bear Market to double/triple their Wealth every bear cycles.

Ensure you keep 30% Money as Emergency Fund so you can Capitalize on Bear Market opportunities.

Limited Loss & Unlimited Profits

If you maintain Portfolio then you should not worry about Price Corrections.

The maximum loss you will face is few companies going to 0% which is Limited Loss. It will not cross beyond that and hit your Assets.

The Maximum Gain you can get is Unlimited Profits. Few companies will grow 1000%, 100000% in the long term giving you Unlimited Profits.

Keep 1% Advisor Expense

You should NOT spend more than 1% for Advisors.

If you have Rs. 5 Lakh Portfolio then maximum you should spend Rs. 5000 per year for stock advisory.

Note: Do not fall prey to the High Paid Advisors. In India all advisors pick from the smallcap & midcap sectors as we do – it is only random that few can have occasional high performance – otherwise the same 500% 5 Year which is 2500% 10 year is the maximum performance of all advisors.

To become Rich 20% Growth Required

For the past 10 years we were creating 1000% performing multibaggers. But only less than 5% people became rich & gained financial freedom.

Why? The reason is they were using only a small amount of capital for stock market while their remaining capital were idle or low-performing ones like bloated real-estate (flats), low performing FDs etc.

So in order to be Rich in 5 years you need 20% Net Worth growth annually. The details are contained in the Rich ebook you get with Subscription.

Believe in India Growth Story

Stock Market is a a Machine which is Fueled by the Underlying Country’s Economy. So Invest confidently in Growth Stocks & During down times Invest More!

India is Undoubtedly Growth Path for next 10 years due to Rapid Urbanization, Digitization, Manufacturing Shift from China.

Contra Markets Strategy

Not all scrips in stock market follow the same trend.

For example, when Economy is in Boom the price of Gold will be reduced As people switch more to stocks for higher returns. Similarly, when Economy is in Bust the price of Gold will be increasing As people choose gold for safety.

Keep a Contra Markets Strategy to gain from both Bull Market & Bear Market.

Remember, Futurecaps Contra Strategy on Corona Times created 100-500% return multibaggers.

Do not Underestimate Power of Mind

Mind is your Vehicle to Path of Riches! Train it well. Protect it from Noises. You are the Average of 5 People you Meet!

Luxury is your Right! Once you realize Profits through Stock Market you should Train your Mind to Buy Branded Luxury Goods as that Keeps the Spirits Up! Rich People buy Luxury through Investment Profits!

Example: Buy a Harley Davidson with 20% money & 80% profits!

Mediocre people reduce expenses, buy cheap things, live below them means thereby killing Spirit of Life! Do not train the mind like that.

Instead Train your Mind to become Rich! Expect good things to happen.. POWER OF NOW!

Note: It is VERY VERY Important that you Follow above Principles to become a Successful Value Investor with Ample Richness on your Side. You can also create Quarterly Reminder on the same so you are Sub-consciously programmed in the right path.

MORE BOOKS

In this section you can get to know more books that will help your Investor Journey!

RICH DAD POOR DAD

This is the Best Classic in Investing Series written by Robert Kiyosaki who is a World Popular name in Investing.. We recommend all New Investors should read this. Rich Dad Poor Dad is about Robert Kiyosaki and his two fathers —his real father (poor dad) and the father of his best friend (rich dad) who guided him in the world of investing.

Key Takeaways from the Book

  1. The book says poor and the middle class work for money. The rich class will make money work for them.
  2. It is not how much money you create that matters. It is how much money you save.
  3. Rich people acquire assets which give more Value than Price. The poor & middle class buy liabilities that they think are assets and corrodes their net worth. Example: House
  4. Financial Aptitude is Money Skill you need to learn to do with the money after you make it, how to protect it, how to keep it more longer, and how you make money work hard for you in generating a financial fortune
  5. The most powerful asset we all have is our mind which we need to use to excel in the money making journey.

However this book does not give the Right Implementation Steps of Investing. You can visit our Master Mind Training for money management & mind power coaching.

robert kiyosaki
WHO MOVED MY CHEESE?

This is an Excellent book which is Small in Size, Easy to Read. Here the author Spencer Johnson tells us a story of 4 mice characters who live in a maze and learn to deal with unexpected change.  The book focus on the Importance of ourselves with time.

In the current corona times we have seen lot of businesses went bankrupt. However, those who adapted the new digital world, switched & scaled their business gained a fortune out of it. Who Moved My Cheese exactly tells the Importance of Changing with Time!

Key Takeaways from the Book

  1. Change is Inevitable and one should be ready to accommodate it. Example: World is today due to change. Else we were in Jungle, Fighting with Animals & Using Stone Fire to generate Heat. So Change is to Happen & we have to Welcome the Change
  2. Get Ready to Change any time as we don’t know when the Bigger Wheel turns. Example: Keep an Open Mindset.
  3. Monitor the Change often so that we know when the Trigger happens. Examples: Watch KPIs on your business so that you know if a product/customer is moving up in sales or not. Watch Career Graph & Key Technology keywords to ensure your Skill is In-demand in the market.
  4. Quickly Adapt the Change so that we can reap more benefit out of it than the Competitors. Examples: Spend time & money on Coaching Classes which will in-turn saves you time & money
  5. Enjoy the Change so it is a fun journey. Examples: Enjoy the new Digital Revolution, New Smart Phones, Apps, VR world, Virtual Fitness etc.

who moved my cheese

SUMMARY

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