1. A multi-bagger stock is rarely identified as a forethought.
2. We may find one in a research report of a business magazine or newspaper, but look at "quotations" instead.
3. At times, a company's stock turns a multibagger with some new invention by it, or even by tactical changes in its capital allocation with better profitability, or due to change of rules in the economy.
4. It is also difficult to identify a multibagger on a DIY basis as it requires immense acumen in fundamental analysis, and also some luck, to find such an "unfairly overlooked" stock.
5. Having said that, a die-hard multibagger fiend should:-
a) study macro-economic factors like economic growth, sectoral growth rate, inflation rate, interest rate, etc.,
b) study micro-economic stock-specific factors like sales, costs, profits, assets, liabilities, cash, return on equity, etc. to predict a company's future trajectory and profitability,
c) determine its stock's intrinsic value through dividend discount and discounted cash flow methods, and
d) compare it with current market price to decide if underpriced,
6. This is because blindly investing in stocks without financial and technical analysis, hoping to hit the jackpot with a few, is nothing but a gamble.
7. When a "potential multibagger" bought by us is overlooked for long, we begin to doubt our own wisdom, make a sheepish exit and leave the "fortune" for someone else to encash.
8. It is, therefore, better to deploy one's hard-earned money in diversified mutual funds for reasonable long-term returns, instead of expecting miracles from a "guaranteed multi-bagger".
2. We may find one in a research report of a business magazine or newspaper, but look at "quotations" instead.
3. At times, a company's stock turns a multibagger with some new invention by it, or even by tactical changes in its capital allocation with better profitability, or due to change of rules in the economy.
4. It is also difficult to identify a multibagger on a DIY basis as it requires immense acumen in fundamental analysis, and also some luck, to find such an "unfairly overlooked" stock.
5. Having said that, a die-hard multibagger fiend should:-
a) study macro-economic factors like economic growth, sectoral growth rate, inflation rate, interest rate, etc.,
b) study micro-economic stock-specific factors like sales, costs, profits, assets, liabilities, cash, return on equity, etc. to predict a company's future trajectory and profitability,
c) determine its stock's intrinsic value through dividend discount and discounted cash flow methods, and
d) compare it with current market price to decide if underpriced,
6. This is because blindly investing in stocks without financial and technical analysis, hoping to hit the jackpot with a few, is nothing but a gamble.
7. When a "potential multibagger" bought by us is overlooked for long, we begin to doubt our own wisdom, make a sheepish exit and leave the "fortune" for someone else to encash.
8. It is, therefore, better to deploy one's hard-earned money in diversified mutual funds for reasonable long-term returns, instead of expecting miracles from a "guaranteed multi-bagger".