[Priority Exclusive] Understanding Multibagger stocks. Come lets hunt a multibagger in the making.
includes Graphite stocks review.
Dear Priority Members, it is time to understand multibagger stocks and long term investment.
Stock market investment is about picking a right business to buy at a good value or the best available price.
I stated the following in one of my quora answers in 2018.
The stocks like Rain Ind, HEG, Goa carbon should have been invested at least 6 to 12 months back. You are in the last stage of the rally, where the stock has priced in next 12 months to 24 months of earnings. Any bad results or flat numbers will destroy your wealth.
First, what is a multibagger?
A stock available at a good price which has a future potential to multiply your investment.
Is it really possible to multiple your investment in stock market?
Yes, it is quite possible. On must identify stocks at a good value or enter once there is a good scope of value increase in the stock.
Should you buy and hold long term to make sure it give multibagger returns?
Short answer is partially yes. Each quarterly results play an important role in deciding the direction of the stock. Any fundamental changes in the stock should be identified and exited. Basic technical knowledge will also help an investor identify hidden threats in a stock and help him exit the stock. It is always advised to diversify into different stocks of different sector, specially if you are new or have less knowledge about stocks.
How much is diversification important in holding Multibagger stocks?
Very very Important. Not just Multibaggers, Investment in stock market contain very high risk of capital depreciation. Stocks can go 2x or 3x in very short span of time and also can go -30% or -80% in a short span. It is very difficult to time the market as a retail investor.
Top mutual funds hold atleast 50 stocks in their portfolio. Focused funds hold 25 stocks in their portfolio. Even top ace investors hold atleast 15 stocks in portfolio.
Does investing in a good growth prospective stock make it a potential multibagger?
Partially yes. Good growth prospective in a stock is a factor that is involved in picking a potential multibagger. Investing solely on such a factor can be disastrous too.
other topics covered in this Priority Exclusive article.
What is the most important factor that is involved in picking a multibagger?
Understanding importance of Profitability Ratios in a Multibagger.
Understanding importance of Valuation Ratios in a Multibagger.
How to calculate a fair value of a stock?
What is the fair value of Graphite stocks currently?
Hunting Multibagger with all possible fundamental checks and technical checks.
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