You must have seen some of the WhatsApp jokes about the 12th standard exams being cancelled. Here's one I liked:
Bro-1: So bro, what is Newton's second law?
Bro-2: Bro, how do I know? I was a science student, not a law student.
Bro-1: Oh you must be the Covid batch.
So, why am I narrating this PJ in an article that is about equity investing, apart from making you smile of course? Simply, to make the point that without accurate, transparent and standardised measures, you cannot really evaluate whether someone or something is any good or not.
However, today, I'm not going to talk about measuring the returns of stocks or mutual funds, which is what Value Research is all about, but about measuring the performance of Value Research itself. To be precise, the Value Research Stock Advisor service.
This service started in November 2017, so is more than three years old. It now has tens of thousands of loyal users who not only use it but have continued to renew it every year. We have seen an entire up-and-down cycle of the equity markets. What's more, some of the forces driving this cycle have been highly unusual - something that is self-evident to everyone.
So, all that makes a good time to talk about the returns generated by the stocks we have recommended in Value Research Stock Advisor. Currently, we have 43 stocks in our list. Back in 2017, we started with 10. Over this period, a total of 51 stocks have been recommended. Of these, four have been demoted to sell at some point and another four have been sidelined to 'hold'. We calculate the returns by hypothetically buying a certain constant amount's worth of a stock when we recommend it. When we issue a 'sell', we obviously sell it in our tracking portfolio. Upon 'hold', we don't do anything.
Over this time, we have also 're-recommended' some stocks that are already recommended. We do this when we want to emphasise the desirability of investing more in that stock. When this happens, we invest that amount again in our tracking portfolio. So far, five stocks have been re-recommended. So, let's get down to brass tacks and give you the number you are waiting for.
20 per cent - that's the annualised number. If you had invested Rs 1 lakh in each stock upon recommendation, then so far you would have invested Rs 55 lakh and the current worth of these investments would have been Rs 88.3 lakh. That's an absolute gain of 57.4 per cent.
I won't go into the details of individual companies by taking their names because obviously that information is reserved for the members of this service, but I'll make an honest confession. Most of the gains of the portfolio are concentrated in about one-fourth of the stocks. About five-six stocks have done badly and the rest have been average. This is fine by me and by all those who have become members of our service.
This is the way a real-world stock portfolio behaves. Except for the ones we have issued a 'sell' for, we are keeping the lossmakers on our list. They are quality companies and will eventually come good. Maybe not all, but enough of them so that our members' returns will improve further.
Some of the best-performing recommendations needed us to have a lot of confidence in our process. For example, there is one particular stock which we recommended at a point when most people thought it had already run up. We not only recommended it, but we re-recommended at some point and then re-re-recommended it, each time at a higher and higher price. The result? In the above tracking portfolio, this Rs 3 lakh of investment is now Rs 9.74 lakh, and we are still hanging on to this stock!
This is a long game, and one in which you need all the help that you can get. That's the role of Value Research Stock Advisor. We don't pretend to take all the decisions for you - we are your personal research assistant team but our goal is to make you the investor.
Let me just recap what you get when you become a member:
- Access to all our (currently 43) stock picks
- Best Buy Stocks: 15 stocks selected from our recommendations. Use this set to start building your portfolio right away!
- The complete investment thesis for all recommended stocks so that you understand why you are investing
- New recommendations as soon as they are released
- Continuous updates and analysis on all recommended stocks - straight from our dedicated analyst team
- Tools and data to research and analyse any other stock
Actually, that's not what you get. It's just what we provide. What you get out of it is what you make of it, the most important parts being empowerment and confidence. Many investors make good choices but in the ups and down of the markets, they lose confidence and bail out too early. What we do is to give you all the inputs you need for you to maintain the strength of your convictions. A major part of our job is to keep in touch and support you during the times when things are looking shaky.
Finally, recommendations are just that - something that we recommend you do. The real achievement of Value Research Stock Advisor is that all those members are becoming real investors themselves and not just consumers of investment information. It's time for you to join their ranks.