If you follow my guide on how to pick multibagger stocks, you’ll end up having the next multibagger stock soon.
You know, picking the next multibagger stock is not so easy. You’ve to wait for the markets to be in a bloodbath.
When others are selling, BUY. When others are buying, SELL – Jonathan Sacks
I’ve consistently beaten the fund managers in their own game just by waiting for the right time.
Before grabbing your Next Multibagger Stock, You Need to Know This:
Multibagger is any stock that more than doubles your investment in the stock market.
Some key points to know before grabbing your next multibagger stock idea:
- Are you a fundamental analysis based investor or a technical analysis based investor? I’ll tell you the difference, advantages, and disadvantages later. I promise.
- Is there fraud or debt default in the company previously? I picked PNB based on the lows it created due to the Nirav Modi scam at around 35 levels on 8/6/2020 and even after 2 years it’s at 29.6.
- Has there been a very big change in the company’s Chief * Officer cadre levels? This will either drive the company on a higher trajectory or lower circuits. Just like the change of Sam Palmisano of IBM as CEO to Ginny Rometty! IBM saw the circuit breakers on the downside multiple times after Ginny Rometty took over! Not to forget, Mr.Warren Buffets’ riches drowned by $900M in just one day!
- How big are the company’s growth trajectory and management’s scaling goals? If management aims for the Stars at least they will reach the Moon!
These are some of my considerations of mine to add to my watchlist before buying it.
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Don’t get married to a stock, Treat it Like a Girlfriend and Dump it at its High Time! – Unknown Person’s Quote
My Aha Moment on How To Pick Multibagger Stocks?
Back in 2011, I’d recently joined IBM and my passion oozed in my words about stock markets.
My best friend, Pankaj Sharma, asked me which stock to buy to make money Macha?
I’d asked him to wait for my pick and after a couple of months, I picked VIP around 66.
He bought it at 66 and within a period of 6 months, he sold it at around 100.
To date, I hold VIP in my portfolio bought around 60ish. Now VIP is around 633.
So VIP is a 10X bagger stock to me in 11 years.
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My Screener to Add Next Multibagger Stock to My Watchlist:
I follow the Coffee Can Investing method to scan for a Screener to add to my Watchlist.
A very easy way to make sure, we do not look for losers is to combine Coffee Can Investing method and increase 15% YOY growth for 10 years instead of 10% YOY growth.
This has consistently given me the next multibagger stock idea to add to my watch list.
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How To Pick Multibagger Stocks as a Technical Analyst?
If you are looking for fundamental analysis, I’m not the right guy.
Fundamental Analysis requires reading a lot of previous history and what the business is!
I don’t try to understand the business, I look for genuine dips in the stock and buy them when there is genuine buyer interest.
I just look to make sure there were no scams, no big brass Chief * Officer cadre changes, and what the company plans to scale, before adding to my watchlist.
Steps I follow How To Pick Multibagger Stocks?
- I screen the stocks already added to my watchlist following the Coffee Can Investing method daily.
- When the stocks dip to a level where the Average Directional Index (14) dips below the level of 10.
- Then I follow the process to screen for scams, no big brass Chief * Officer cadre changes, and if any, why, and is the reason genuine, and what the company plans to scale in future years.
- If the 3rd step is a Clean Chit, Then I wait for the stock to start moving above the Average Directional Index (14) to move above 10 again.
- After this, the particular stock should have a crossover of 10 Day Close EMA cross above 13 Day Open EMA.
- Once there is a cross, I buy it the same day or the next day beginning.
- It roughly takes around a max of 6 years for such screened stocks to double or be a multibagger.
I’ll tell you how to be Rich. Be fearful when others are greedy. Be greedy, when others are fearful. – Mr Warren Buffet.
My Next Multibagger Stock Ideas:
|Return in %
|Exited 08 Jun 22
Am happy to announce my new pick Atul on 8th July 2022.
My expectation with Atul is to at least double in the next 6 years, since it is a high-priced stock, not many small investors BUY it.
Atul has had a clear clean slate business with no scams and a very profitable business.
Most importantly, it came under my radar when the stock market fell and Atul hit the lower chord on Directional Index as per the Coffee Can Portfolio Watchlist criteria.
Now that ATUL is part of my portfolio, am happy that I have 2 stocks with Rs.5000+ market price.
See stock picks also should have a rationale behind them. If you can understand the business and its business model invest in it.
Also, have some common sense.
For Ex.) When you see the world scaling in technology so fast, a journaling company to invest is probably a bad decision. Also look at the lineup of their business and their growth potential, including their Ads.
I currently have multiple stocks in my portfolio which are my next multibagger stock picks.
My return expectation for a multibagger stock is to get at least a 3X return.
In the case of Coffee Can Investing, Saurabh Mukherjea talks about leaving the stocks for about 20 – 25 years.
I feel my picks have that capability to give me 3x the return.
In case I do not need the money, I would continue to let my investment in the company grow.
Also when we look at stock growth, we’ve to consider the dividends too. With dividends, I am sure to have gained more.
Investment must be rational; if you can’t understand it, don’t do it. – Mr.Warren Buffet
Ideal Return Expectation on the Multibagger Value Pick Stocks In India:
My return expectation is around 3x the return.
I got this expectation based on the views of Prakash Diwan of Altamount Capital.
Watching many videos of Mr.Prakash, where he spoke about the next multibagger ideas of Muhurut and New year, his expectations were about 3x – 4x.
Which is 300% – 400%, so fair analysis, and backtesting revealed, that in about 10 years, the formula I’ve to find the next multibagger stock returns about 6x returns with an exception of 2 out 1000.
Having read Coffee Can Investing, I enthusiastically took 6 – 8 months to screen my stocks before investing around 2019.
After taking the big leap, I saw my stocks returning well within a year, and hence, I’ve followed my approach.
Don’t put all your eggs in one basket – Mr.Warren Buffett
Multibagger Stocks for Next 5 Years:
I can easily say, the portfolio I own will at least double in value in the next 5 years.
Other than what’s on my multibagger stock picks portfolio, I’ve certain stocks on my radar.
- Larsen & Toubro Infotech
- Naukri (Info Edge)
- Avenue Supermarkets (DMart)
- Balkrishna Industries
- Supreme Industries
All the above are on my radar and have the potential to become multi-baggers in its space.
I’d definitely wait for the right time to BUY the above stocks because I’ve to do background checks on the stocks before adding them to my portfolio.
Always my multibagger stocks screener always has the best-researched stocks by me to the best of my ability.
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If you don’t understand the business don’t invest in it! – Mr.Warren Buffett
Multibagger Stock Picks Conclusion:
- Before any investment, please be 100% nonbiased about your investment.
- Do not take stock tips or services that make your investment decisions.
- Always screen the stocks well before making rational decisions. As a result of this, you get the right diamond in the trenches.
- It’s so important to be in your full conscience when making an investment. If you’ve had a bad day, or bad mood, don’t invest on that day. Since it’s an investment for a long time, you won’t lose if you wait for couple more days.
- Always, track your investments for any scams, or any big changes in the way they lead their business. If it’s a drastic and desperate move, make sure to exit it.
- In case of the return of a multibagger idea, you picked did not return at least a 100% return in the market in the next 6 years, exit out of it. It’s not worth your time and money. Trust me on it.
Failure if the stepping stone to SUCCESS! – Arianna Huffington
What did you like in my philosophy of how to pick multibagger stocks? Comment about it below.
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