How frequently do you review Best Buys Stocks? Can I assume that these stocks can be bought at any price?
Yes, all the stocks that are labelled as BUY in our recommendation list can be bought at any price unless they are labelled as Hold or Sell. But I think Best Buys are the most attractive set of stocks that we have recommended.
We review the Best Buys list every week and debate very hard on it, internally. We do not want to take the list beyond 15 stocks because that will nullify the entire objective of trying to reduce your work on selectivity. And 15 is not something that is a pre-stated target. It can well be 12 or 13. These are the most attractive ones which are on our recommendation list.
Further, I would like to say that any stock on our recommendation list can be bought at any price. This is because if we think that a particular stock has attained a price that is not good to buy, then we will issue a sell recommendation. We will issue a sell recommendation on a stock on two grounds. One is when the hypothesis has changed and the stock is falling short of our expectations. Most of our sell recommendations are because of this reason.
We haven't got an opportunity to issue a sell recommendation for the second reason. And the reason is when a well-performing company has gone up and it has gone up so dramatically that if we have to buy a fresh stock at that price, we will think whether or not we should buy it. And if we think that we will not buy it at that price, we will issue a sell recommendation. But as said earlier, over the last two-three years, we haven't come across such a situation. Although some stocks have gone up, they haven't gone up to a level that we could say that it's all done now.