I met a GENIUS investor who has made >30 Crores in the stock market and has a CAGR > 70%
Here are his key learnings so you can replicate his performance as well
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1. Smallcaps and Microcaps are Kings
Biggest wealth is created by investing in small caps and microcaps.
You have to find small companies with excellent promoters and managements which can become supremely big in the future.
Microcap investing is higher risk if you get it wrong but much higher reward for those who study and do information driven investing
2. Hockey Stick Growth
Contrary to popular belief, the biggest multibaggers originate from 300-3000 Cr market cap range instead of <300 Cr range
The companies which have achieved a market cap of 300 Cr have demonstrated a strong product market fit for their business and some of them can experience hockey stick growth.
Our job, as investors, is to find this hockey stick growth and invest in the companies which will witness this hockey stick growth
3. Cash is King
Invest in companies which are cash rich either through IPO or through preferential equity allotment
If you compare between 2 companies which are equal in everything except cash, the one with higher cash wins because they can use the cash to grow the business.
Hence, go gor companies which have cash in their bank accounts through IPO/ preferential
A randomly selected high PE stock can be super risky but a high PE stock with a huge order book can be a great buy. In fact, this high PE can be a validation that order book is genuine.
In case of high PE stocks, always try and estimate the forward PE. If this is possible, great and take a decision accordingly
If this is not possible, you can skip as you have no estimate of forward PE
No person on earth can say with certainty that this stock will be a multibagger.
The more intelligent thing to do is buy 20 stocks or 20 lottery tickets with EXACT equal allocation after in depth study and hope some of them become multibaggers.
Equal allocation improves your chances of success and helps you sleep better
6. Buying 20 preferential equity allotment stocks with exact equal allocation can be a POWERFUL strategy
If you only have preferential equity allotment stocks in your portfolio, then your portfolio companies are super cash rich and poised for growth.
This equal allocation preferential equity allotment is perhaps the best started ever created
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