Unbiased Stock Research firm - Is that a myth ?

Recently I got a promotional mail from PersonalFn which recommended Hidden Treasure service (Small cap recommendation service) from Equitymaster. They were talking about the three top performers (only three) of their recos in last 3 years. They also acknowledged their failure on MIC electronics. As usual they are trying to market their services by luring the investors citing  5 to10 fold returns that some of the Small caps bring you over longer term.

Being a Life time Wealth Alliance member of Equitymaster I knew Hidden Treasure service is one of the worst failures among EQM services. Their success rate in the last 2 years is nothing to talk about. Only 3-4 recos made in year 2009-10 have given good returns. Most of the recos in 2010 and 2011 have performed between +5% to -80%

I have lost close to a lakh in INR (booked losses) by investing in some of their Recos like MIC Electronics, Bartronics, Allied Digital,  C and C Constructions, Anant Raj Industries,  Deccan Chronicle, Lakshmi Energy and few more. People who invest in stocks on a regular basis would know how badly these stock prices went down in last one year... I learnt another round of lessons in the Stock market by paying a heavy price.

Folks, be careful and don't blindly follow recommendation reports on Mid/Small Cap companies even if they are from paid services like Equitymaster. I do have doubts if they are a truly independent and neutral stock research firm without any vested interests. Always do you own research wrt Valuations, Promoter Pledging, Promoter holding, Overall Business environment, Debt to Equity ration (most important), FCCB liabilities, % interest costs / profits etc.

Make your own decisions on Buy / Sell. Be responsible. Be disciplined. You will be a winner.

All the best.

My Equitymaster review in Mouthshut.com
http://www.mouthshut.com/review/EquityMaster-com-review-nspurrrpon

How to identify Quality Stocks ?

A good article can be found here.

Life time member of Private Wealth Alliance from Equitymaster

Taking another step forward in my relationship with Equitymaster, I subscribed to their "Private Wealth Alliance" - Lifetime membership for all Large/Mid/Small Cap Recos and ResearchPro services. Year on year renewal of their services is a pain and it much costlier too. I am glad that Eqm came up with this offer to their clients and I hope they will maintain their service levels and improve the Quality of their research reports.

I am waiting for a 20% correction in Market from current levels. I am sure I would be able to recover the subscription costs soon with market presenting a medium term opportunity.

My subscriptions with Equitymaster - Going overboard ?

It was in January 2008 when I made my First subscription for Equitymaster's Stockselect - weekly Largecap stock recommendation service.. By then annual charges were less and more affordable..

The next year, in 2009, I went for Midcapselect - Midcap stock recommendation service with a report every 2 weeks.

And in 2010, I subscribed to Hiddentreasure - Smallcap recommendation service with once in a month report.

Last week, I subscribed to ResearchPro - Countinous research updates on close to 100 shares with Buy/Sell Limits.

Among all the services from Equitymaster, I liked the ResearchPro the most.

The strange thing is I did not make much money out of their recos. But they helped to recover all the money I lost due to my poor selling decisions in the years 2008-09 (during the Stockmarket Crash). And I just managed to recover the Subcription charges of ~ Rs 18000 I paid to them over the past 3 years.

For investors like me who does not even invest beyond few laks in shares, the subscription charges are definitely on the higher side.

It will be great if there is small Investors club of 4 to 5 people who are ready to share the subscription charges. Else I should increase the amount I invest in shares, which is not possible in near future.

How to Avoid Paying Too Much

Good article in Value Research :

How to Avoid Paying Too Much
Click Here

Back to basics - Series of newsletters !

Back to Basics .

ROE - Demystified

ROE-Demystified

Making sense of financial statements

Related article in rediff :

http://business.rediff.com/report/2009/jun/15/perfin-making-sense-of-financial-statements.htm