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A lifetime of research and understanding

Why it makes little sense for us to provide a 'sample' of our service

A lifetime of research and understanding

Our Value Research Stock Advisor is now almost three years and nine months old. The number of subscribers is in tens of thousands. Clearly, we have succeeded in creating and sustaining something that is of real value to equity investors.

During this time, some of our most interesting encounters have been with those who are still evaluating the service and trying to figure out whether they should become members. Here, we come into conflict with the conventional idea of what a stock-advisory service is supposed to be all about. This view is that such a service is little more than supplying a list of stocks to buy - basically, a 'tip' service, like those WhatsApp or SMS messages that investors get, except in a slightly organised form.

We get some potential customers who ask for 'samples' of our service. They come from this mindset. I'm not blaming them because perhaps 95 per cent of the brokerages and equity-advisory services in this country operate like this. They give a sample of what they recommend, you try it out and if you like it, you pay. So people who are used to this mode of working come and ask us for a sample. They feel that we should be able to give them one or two stock-analysis reports on some recommended stocks or maybe just the names. Then, they'll see whether those stocks do well and they will decide whether to become a member based on that.

Honestly, there's nothing wrong with this approach if you are evaluating a pure tip service for short-term punting. If that's your game, then this is the right way to go. That's because there is nothing else that such a service offers except a list of names that are expected to make money immediately.

However, a real advisory service gives you something very different. At Value Research Stock Advisor, we do not expect you to invest in our recommendations mindlessly. When we recommend a stock (there are currently 45 stocks in the buy list), we publish not just a report on the stock but a complete introspection of our own reasons for recommending the stock. However, that's just the beginning of the story. We expect our stocks to be held for years, and during that period, there are many ups and downs.

Typically, if a stock is worth buying and is part of our recommendation list, then it is even more attractive during the time when the markets are weak. This is contrary to punter behaviour and, let's face it, contrary to most human instinct. This is the point of time when the difference between just selling a list and providing a genuine advisory service comes to the fore. If you have bought a list from someone, you don't know what's going on and it's best to cut and run. However, if you have absorbed and accepted the logic that we have given for why a stock is worthwhile, you will keep buying during the weak market and only then will you eventually get greater returns.

A key part of the service is keeping the confidence when there are big moves in a stock or in the market, when there is some adverse news, or even when you have some issue of your own because of which you may be feeling shaky. There are prolonged periods when even great stocks go nowhere. However, investors need to keep the faith that during all that time, the foundation of future profits is being strengthened.

That's the difference and that's why it makes little sense for us to provide a 'sample' of our service. A real sample will take years.