We launched Basant's Corner in the last week of October 2011 with a view to help and assist investors in managing their own equity portfolios for generating above market rates of return. In this connection the return for the first 11 months have been staggering. Inclusive of dividends an equal weighted portfolio in Basant's Top Ten has returned 42.6% for its investors beating the Sensex, Nifty and all mutual funds. The highlights of Basant's Corner has been listed below for information:
• The Top 5 stocks in Basant’s Top Ten have remained unchanged while the bottom five saw three changes as we chose to move the stocks that rallied ahead of visible fundamentals out of the Top Ten into Basant's Universe.
• The approach of backing up quality companies with strong balance sheets and dominant industry positions paid off as it does inspite of what is commonly said. Majority of stocks here were not of the low PE types but were generally companies that had earnings visibility of several years ahead.
• The idea is not to have a fixed rule of recommending one stock every week/month. The focus remains to help subscribers create a portfolio where money is made by sitting rather than by shuffling. Too bad for the brokers not so much for the investors.
• We avoided recommending risky bets in the portfolio. There is an underlying theme in the stocks that we have recommended varying from secular growth; dividend yield; turnaround both (topline and bottomline) etc.
• The Basant's Top Ten portdolio comprises of:
4 small caps (market capitalization less than Rs 1000 crore);
3 mid caps (market capitalization between Rs 1000 crore and 5000 crores)
3 large caps (market capitalization above Rs 5000 crores)
• Out of twenty companies that we have recommended in these eleven months nineteen are well above recommended price and the one which is underwater is just 4% below the recommended price. I think with this quarter's results we should have a 100% strike rate.
• The "Ask Basant" segment a section available only for the Gold 365 subscribers remains the source of close interaction with the subscribers. This section has till date generated over 3200 questions & answers (all archived) ranging from personal finance, portfolio allocation, stock specific queries both from within the stocks covered in Basant's Universe and outside it, small debates on the stocks introduced including red flags as raised by the members from time to time, feedback from members on the general product usage as generated from distributor interactions etc.
• Some people argue that most of the stocks we recommended went up because of the huge subscriber base. I disagree. No one can manipulate the markets for longer periods of time. If that were so why did Delta come down to Rs 60 after more than tripling to Rs 140? How did Ketan Parekh and Harshad Mehta lose grip on the market? Additionally we constantly review our stocks with ratings as ‘Buy’, ‘Accumulate’, ‘Hold’, ‘Reduce’ and ‘Sell’. These calls are provided on an ongoing basis. In one instance we changed the recommendation to ‘Accumulate’ from ‘Buy’ after a 50% rise and the stock went up further to double up from the recommended price. This quality company managed by the best known people in the business is expected to move up 10 times in 10 years from here also. Call it the Dus ka Dum! Had the first 50% move been because of our subscribers buying the rise would have stopped after we put an ‘Accumulate’ rating but it did not, unlike the inferior grade businesses this stock could have been backed up by any amount of the investor's net-worth so putting more money to work was never an issue as is generally the case with bad businesses.
I do not want to predict next year's return as I always am. However I remain confident about these investments over a 3-5 year period for beating the market averages and a majority of mutual funds hands down. The idea is to try and target a 25% CAGR. Overall the focus remains to generate decent returns and help investors make money through long term investing.
Finally the bad news, the service just got 33% expensive from September 03, 2012.