http://www.equitymaster.com/5MinWrapUp/Four-Proven-Approaches-To-Stock-Picking.

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Four Proven Approaches To
Picking Multibagger Stocks
Not many in this part of the world would have heard of the famous value investing firm, Tweedy
Browne Company LLC. However, this is not their only claim to fame.

Some years back, the firm conducted an extensive research in the field of equity investing. It was an
attempt to find out a stock picking method or strategy that has given the highest returns over a long
term period. Aptly titled, 'What has worked in investing', the findings of the study are likely to burn a
big hole in the myths that people have about investing... especially the ones who do not believe in
the concept of value investing.

The truth is finally out

So here we are. Finding the next market beating portfolio does not need sophisticated analysis nor
does it involve losing sleep over which way interest rates are headed next or attempts at finding out
whether India will run a trade deficit or a surplus in the next fiscal. It is entirely free of this so called
mumbo-jumbo.

Instead, all it requires is finding out which stocks are trading the cheapest relative to their peers and
sticking with them for a few years. Yes, that's all there is to successful investing. And we have the
report for proof.

As per the report, a portfolio of stocks that are trading at the cheapest valuations when measured on
conventional valuation parameters like price to book value and price to earnings have shown
remarkable consistency in attaining market beating returns for a sufficiently long period of time.

But why look for cheap stocks? Will any good stock not suffice? Certainly not!

Buying stocks should not be different from buying things on sale in a supermarket or waiting for the
car companies to offer special incentives. The time to buy stocks is when they are on sale i.e.,
selling cheap, and not when they are priced high because everyone wants to own them.

The objective of this report is to validate this very fact - stocks selling cheap tend to give better
returns over a long period as compared to those selling at expensive valuations, all things remaining
same.

As part of the analysis that went into preparing this report, we dug deeper into history and studied
whether the approach of buying cheaply valued stocks has delivered good returns over the long
run.

The year we have used as our base is 2003 as we believe that analysis going as far back as nearly
a decade is a long enough time to prove the validity of our approach.

And what has been the conclusion of our study?

Less valued stocks have performed brilliantly over the long term. Whether one bought stocks trading
at low P/E, or low P/BV, or even low Graham's Mutiples (we will explain this in a bit), the returns
have been great.

Using this analysis as a backdrop, we have compiled some lists of stocks that pass these 'low
priced' criterion as of now. You can treat this as a universe from which to find your next multi-bagger
stocks.

But just a word of warning here - these lists present just the universe of stocks that pass these
criterion. One still needs to analyse a company's past performance record, its management
credibility, and future prospects before making the final buying decisions.
We hope this report serves as a guide to you in your search for some brilliant long-term investment
opportunities.

Here's to your long term financial well-being.

Approach I
Buying Stocks With Low Price in Relation to Earnings
Stocks bought at low price/earnings (P/E) ratios offer higher earnings yields than stocks bought at
higher P/E ratios. The earnings yield is the yield that shareholders would receive if all the earnings
were paid out as a dividend.

Investing in stocks that are priced low in relation to earnings includes investments in companies
whose earnings are expected to grow in the future. To paraphrase Warren Buffett, 'value' and
'growth' are joined at the hip. A company priced low in relation to earnings, whose earnings are
expected to grow, is preferable to a similarly priced company whose earnings are not expected to
grow.

Data Source: ACE Equity

Excludes banking & financial companies.

The fact that buying low P/E stocks can get you better returns than stocks trading at high P/E is
validated by the under-mentioned chart. It shows the average returns of stocks over the past 10
years across different range of P/E multiples.

As the chart shows, stocks in the year 2003 with P/E multiples of less than 5 times have generated
the biggest returns over the following ten years.

On the other hand, returns from the Sensex since then till date has been just around 331%, making
it part of the category that has generated the least return as per the above chart.

Those who picked up stocks with P/E multiples of between 10 and 25 times have generated
considerably lesser returns.

The analysis excludes stocks of banking and financial companies, as P/E is not the right metric to
assess their valuations. Price to book value is, as we will study in the next chapter.

Approach II
Buying Stocks With Low Price in Relation to Book Value
Apart from P/E, another ratio that is commonly used to value stocks is price to book value or P/BV.
This is arrived at by dividing the market price of a share with the respective company's book value
per share. Book value is equal to the shareholder's equity (share capital plus reserves and surplus).
Book value can also be arrived at by subtracting current liabilities and debt from total assets.

Stocks priced at less than book value are purchased on the assumption that, in time, their market
price will reflect at least their stated book value, i.e., what the company itself has paid for its own
assets. All things remaining constant, such stocks generate higher returns over the long run as
compared to stocks that trade at higher P/BV ratios.

Data Source: ACE Equity

See for instance the chart above. Stocks trading at P/BV of less than 1 time have far outperformed
those that traded at a higher valuation (1times and above).

Based on this analysis, it becomes clear that buying a basket of low P/BV stocks may get you
outstanding returns over the long term. But you may do even better if you can determine which of
the low P/BV stocks are worth purchasing and which are about to go bankrupt.

Looking for companies with a good overall track record, and manageable to low debt among stocks
trading at discount to their book value can present great investment opportunities.

Approach III
Buying Stocks With Low Price in Relation to Liquidating Value
The idea here is to buy stocks at a cost less than their net current asset value (NCAV), and thereby
giving no value to the fixed assets. But why just current assets? Because it includes items like cash
and other assets that can be turned into cash within one year, such as accounts receivable and
inventory, and is therefore a good measure of a company's worth if it were to be liquidated. This was
a stock selection technique successfully employed by Benjamin Graham.

Graham believed that stocks selling below NCAV were worth more dead than alive. He stated if a
stock was selling below liquidating value, either the price is too low or the company should be
liquidated. He also states that stocks are 'real' bargains as per the NCAV method only if these
companies are in no danger of squandering these assets, and have formerly shown a large earning
power on the market price.

The fact that the NCAV rule works cannot be doubted. But it is difficult to find stocks that sell at a
discount to NCAV in bull markets. It was the case in 2003 as well. While there were several stocks
that were trading at low P/E and P/BV, but not many were trading at discount to their respective
NCAV.

As such, for our analysis, we have studied the premium on NCAV at which stocks from our universe
were trading at then. And the result is that - stocks that were trading at the lowest premium to the
NCAV (less than 5 times NCAV and between 5 to 10 times NCAV) in the year 2003 have returned
the most in the subsequent ten years. As compared to this, stocks trading at multiples of more than
5 times NCAV have turned out relatively poor performance over these years.

MC-Market capitalisation, NCAV - Net current asset value;

Data Source: ACE Equity; Excludes banking & financial companies.

Approach IV
Buying Stocks Using Benjamin Graham's Magic Multiple
If you are confused which of the first two ratios - P/E or P/BV - to use to determine whether a stock
is trading cheap, has a 'magic' formula to suggest!

It is the multiple of a stock's P/E and its P/BV.

Graham has put an upper limit to the output of this ratio - 22.5. This he derived using a maximum
P/E of 15 times, and maximum P/BV of 1.5 times - the highest multiples he was ready to pay for
stocks.

Our analysis shows that, on applying this multiple to our universe, stocks where the output of P/E
multiplied by P/BV was significantly lower then 22.5 have generated more returns than those whose
output was greater than 22.5.

Data Source: ACE Equity

Excludes banking & financial companies.

A Universe of Stocks 'On Sale'

After reading the above approaches to picking up cheap stocks, you must be wondering whether
this can work in all environments. Quite certainly, we believe. Irrespective of the environment there
will always be some stocks that would be trading cheap vis-a-vis their peers and also stocks that are
expensive.

Thus, even now, you can still find cheap stocks using all these three approaches.

But don't worry, you won't have to do any hard work yourself! We will make your task
easier... In fact, we will even zero in on the stocks for you...

You see, my colleague and I have jointly put in over 20 years of hard work to build systems and
process to pick winning stocks by following these exact same ideas, and more.

If you are interested in getting access to our best views and investing ideas, then we recommend
you start here...

Regards,
Tanushree Banerjee & Rahul Shah
Co-Heads - Research, Equitymaster

P.S.: One segment of the stock market where you can make extraordinary returns is small caps. In
fact, a select group of investors have seen several triple digit gains, and numerous double digit
gains in the last couple of years alone! If you would like to explore this opportunity for
yourself,please click here...

http://www.equitymaster.com/5MinWrapUp/admin/subsc
ribe_buffett_2014.asp

Welcome to Equitymaster's The 5 Minute WrapUp

Thank you for subscribing to Equitymaster's "The 5 Minute WrapUp", our free daily e-letter service.
We're confident that this subscription will keep you updated on the latest news and provide you with
unbiased investing ideas, daily.

Now, coming to our exclusive 3-Part Master Series on Warren Buffett...

This series, which is authored by Radhika Pandit, Editor, ValuePro, will be released starting Friday,
15th August.
It will be delivered to your inbox every day, for 3 days, at about 2 PM.
So, look out for it!
In addition to this report, we're also giving you an Absolutely Free Copy of our Most Popular eBook
Multibagger Stock Ideas (2014 Edition) : Four Proven Approaches To Picking Multibagger
Stocks.

Your copy of Multibagger Stock Ideas (2014 Edition) has been sent to your email. It should reach
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As a subscriber of The 5 Minute WrapUp, this is what you will benefit from -
a. A logical and objective view on both important and interesting developments around the world
b. The possible implications of such developments on the investment scenario surrounding a
particular stock, or sector or even the economy
In short, The 5 Minute WrapUp is all about 'views', and more so about making smarter investment
decisions based on these views.

Hi, I'm Rahul Goel, the CEO of Equitymaster.

Here at Equitymaster we function with a simple objective: To equip you with the information
you need to make well-informed investing decisions and grow your money safely...without
falling prey to tips from brokers or even to your own gut feeling.

To that end, here's something that might really interest you...

One segment of the stock market where you can make extraordinary returns is small caps. In fact, a
select group of investors have seen several triple-digit gains, and numerous double-digit gains in the
last couple of years alone!
If you would like to explore this opportunity for yourself, just keep reading...

Discover The Profits That Lie Hidden

In Unusual and Little Known
Small Companies
After more than 6 years of picking out high-potential
small companies, Equitymaster now reveals
the secret to truly "striking it rich" with small caps

One such stock pick turned Rs 10,000 into Rs 38,800

Another turned Rs 10,000 into Rs 191,100
Read on to find out more...
Dear Reader,

Consider the following investment scenario for a moment...

On the 15th of this month, you receive a recommendation from Equitymaster for a relatively unknown
and under-researched small cap stock.

This stock may not be talked about much in the media, your stock broker may not have enough
information on it, and it may not be the focus of any discussion with friends.

But still, largely because it is Equitymaster that's recommending the company, you decide to play it safe
and invest a tiny-winy portion of your money in it. You know, just in case.

And then, silently the company continues to grow behind your back.

As you grow older, the company also grows old with you... moving up in value and price -- doubling,
tripling, and quadrupling during this period.

Then one day in the not so distant future, when you've probably even forgotten that you own shares of
this "once unknown" company, it surfaces as one of the leaders in its industry...
Handing You Returns Of
1,000% or More Effortlessly!
Is something like this really possible?

Yes, it certainly is!

In December 2002, Shriram Transport Finance Co. Ltd. was a little known small cap stock available for
just Rs 11.7 a share.

Not many people expected it to grow the way it has, and therefore not many bothered to invest in it.

But by cashing in on the increased need for commercial transportation and coming up with a business
model that set it apart from all its competitors, the company succeeded in growing its business rapidly.

As a result, its stock price increased from Rs 11.7 in 2002 to Rs 757.2 in December 2012. And
those who invested in Shriram Transport in 2002 ended up making a whopping 6,372% on it till
2012.

So if you had invested Rs 10,000 in it in 2002, it would have been worth Rs 647,200 by 2012!

And this is not a one-off case either. Take a look at the table below...
Change in share prices over 10 years
Company Dec-02 Dec-12 Change

Era Infra Engg. Ltd. 0.9 135.6 14,801%

Havells India Ltd. 7.1 637.6 8,906%

Shriram Transport Finance Co. Ltd. 11.7 757.2 6,372%

Motherson Sumi Systems Ltd. 3.1 197.8 6,362%

Opto Circuits 2.2 107.2 4,748%

NMDC Ltd 4.3 165.1 3,713%

Pantaloon Retail (India) Ltd. 8.6 257.2 2,894%

Kalpataru Power Transmission Ltd. 3.7 94.1 2,456%

Praj Industries Ltd. 2.8 48.0 1,633%

Aban Offshore Ltd. 29.7 377.8 1,174%

Now before we proceed, let me clear one thing:

None of the above stocks were Equitymaster's recommendations. We are just giving them
as examples to show what's possible with small cap stocks in the long run.

And later on in this letter, I will actually share with you some small cap stocks that
WE recommended, and how well they've done.

But getting back to the original point...

What was the common thing in all these small companies
that set up huge profit windfalls for their investors?
Though not many people knew, all these companies were already leaders in their own sub-niche or the
small area of the industry they operated in.

And thus, they were much better prepared than their peers for managing explosive growth in the years to
come.

So when the demand for their product grew, they were able to provide a much better service than all of
their competitors and quickly established themselves as the go-to guy in their niche.
And the rest as they say, is history.

It's true! Most of the companies you saw in the table above are pretty well known in India today. But at
one time they were not so well known.

They all started out small, established themselves as the leader in one main area where their expertise
lay, and then diversified into other areas.

Imagine how much you would make if you found out all such high-potential small companies
early, and invested in them while they're still in their infancy?

Given the uncertain nature of small caps, we cannot and should not expect every small cap stock to be
an out-and-out winner.

But we know that small caps are fast movers, and that the movement quickly shows in their stock price.

So assuming you manage to pick 5 'reliable' small cap stocks, even if just 3 out of the 5 manage to
endure the market uncertainties and turn multi-baggers, you will be rich!

And that is what our small cap recommendation service, Hidden Treasure, aims to help you do.
Grab Reliable, High Potential Small Companies
For Ridiculously Low Prices
Did you ever find yourself thinking, "I wish I had invested in Pidilite while it was still young?" Or even in
Titan for that matter?

These were once-unknown-small companies that have grown rapidly in the last decade to become
household names in India today.

But there was no way you could have known that sooner... until now...

Through Hidden Treasure we're providing you opportunities like that today.

The stocks we reveal through Hidden Treasure are companies that are either under-researched or not
covered by other stock brokers and research firms.

There's no other authentic source of LONG-TERM recommendations on such companies. And whatever
else is available is biased.

I understand that small caps may not comprise a big portion of your portfolio. But that doesn't mean you
don't need to think about them at all.

This small part of your portfolio does the KEY job of maximizing your returns...
That's Why You Need To Be EVEN MORE Careful
In Choosing Your Small Cap Stocks
We launched Hidden Treasure in February 2008 with a view to
provide profitable Small Cap recommendations.
"Equitymaster has made me more
and more richer every year since my
But "profitable" doesn't necessarily mean 300% returns in one
association with them. It has given
week.
me more wealth than my
professional career. Convey my best
We have always said and still say that you should look at
wishes to all 52 members at Equity
small caps from the long-term perspective.
Master."
-- Dr C V Ajmera, a Hidden
The stocks we recommend through Hidden Treasure are
Treasure Subscriber since 2011
strong companies and we recommend them not because
we believe they will flourish in a month or two, but over a
minimum period of 4 to 5 years.

We reveal reliable small companies through Hidden Treasure as and when they're available at a
bargain... giving you the opportunity to snap them up early and set yourself up for huge gains when
these stocks soar.

However, considering the risks that small companies carry, you should realistically not expect each and
every recommendation to be an out and out winner.

Plus, whenever the market crashes, small caps are the first to bear the brunt of it.

So these are some things you need to understand and acknowledge when you invest in small caps.

But despite all these drawbacks, we believe our Hidden Treasure service has actually done quite well.
Our 6-Year Hidden Treasure experience
It was on 15th February, 2008... i.e. a little over 6 Years back, that we picked out our first Small Cap
Stock.

After much deliberation, in-depth research and testing it across multiple factors... we found it to be an
excellent opportunity.

So we recommended a select group of investors to Buy it, and tracked it for them over the coming
months.

Keeping them updated on its performance. Ensuring that our assumptions were right and the company
was strong on its growth path.

The efforts paid off!

On 12th October, 2008, we sent out an Urgent Email to our subscribers, asking them to Book their
profits!

Our First Small Cap Stock recommendation gave our subscribers an impressive 87% returns in
just 8 Months.

Yes... a stock which we had picked out for an investment period of 3 - 5 years (as we do for all our small
cap stocks) gave a big boost to our confidence, and big returns to our subscribers who invested in it!

So over the year we picked out more....

Our 2008 stock picks gave our subscribers returns like:

Returns Booked Investment Period

250% 2 Years & 1 Month

177% In Just About 2 Years

100% 1 Year 8 Months

217% 3 Years & 11 Months

Past performance does not guarantee future results.

So, over the coming months...

We saw many more smart investors joining our small cap recommendation service and
benefitting from our research.

We saw our research team spending many more hours scrutinizing obscure but fundamentally
 strong small caps.

We had teams visiting various cities across the country, meeting various management teams
and picking out even more profitable small cap picks!

And the same good trend continued in 2009 also... despite both these years witnessing some of the
biggest market crashes.

That's right!

So, even from our 2009 picks, we saw exciting returns like:
Returns Booked Investment Period

288% 2 Years & 5 Months

124% Just about 7 Months

Past performance does not guarantee future results.

Our subscribers were ecstatic! And the Market was exciting.

"Very good unbiased recommendations. All the reports of recommendations are in
depth and very good. Overall when one see the site one can easily understand the
fundamentals of investing. Very useful. The main thing is equitymaster can be
trusted. Overall my experience has been very good."
- Raghunathan Srinivasan, a Hidden Treasure Subscriber since 2010

The year 2010, on the other hand, turned out to be tumultuous for the entire small cap index. And our
subscribers too couldn't escape its effects.

But starting 2011, we were back to booking consistent profits again...

From our 2011 stock picks, we booked profits like 139% in 7 months, 105% in 13 months, and
82% in 1 year and 2 months! And from the open positions, we are getting double digit returns
like 233% and 43%.
Further, from 2012 picks, we have booked returns like 119% in less than 3 months and 160%
returns in around 24 months.
And what about our 2013 picks? Believe it or not, 2013 has seen ALL our Buy
Recommendations giving double-digit returns already! In fact, we have closed position on one
of the stocks in just 9 months with 143% returns!

So the service has performed consistently well over time and today, it's One Of Our Most Popular
Services!

With thousands of subscribers and a solid track record... we can confidently say that our
research process works!
"I have been with equitymaster for nearly 20 years - happy to have made a lot of
money - Really investor friendly and independent analysis. Compliments to
Research team."
- Dildar Singh, a Hidden Treasure Subscriber since 2012

However, we don't want you to get the wrong picture.

Not all Small cap stocks will jump up too much... too quickly!

But the most important thing is, even if 3 out of every 5 small caps eventually manage to endure the
market uncertainties and turn multi-baggers, you will be rich!

And that is what we want to help you achieve through our Hidden Treasure service.

Take a look at some of the returns made by our Hidden Treasure recommendations:
Stock Recommended Change

eClerx 247% in 5 months

Nitin Fire Protection Ind Ltd. 139% in 7 months

Elgi Equipments Ltd. 250% in 2 Years 1 month

KPIT Cummins Infosystem

288% in 2 years & 5 months
Ltd.

V-Guard 123% in less than 3 months

1,811% in 5 years (Not a Sell

Page Industries
Yet!)

Past performance does not guarantee future results.

It's for this reason that Hidden Treasure has been One Of Our MOST POPULAR services over the last
couple of years.

And we want YOU also to be one of the people to benefit from it.
So today, we have got something Extra Special for you. . .
See, the usual price of Hidden Treasure is Rs 5,000 per year.

But for the next few days, you can get Hidden Treasure at More than 60% Off... or Just Rs 1,950 for a
One Year Subscription.

And then, there's also a 30-day, 100% moneyback guarantee on this offer.

So, you can sign up at this price and test-drive Hidden Treasure for a full 30 days.

If you don't like it, get in touch with us before the 31st day, and we'll refund the entire fee you paid. That's
a promise!

But you must act quickly.

This offer will close soon, and then you will have to pay the FULL price to sign up for Hidden Treasure.
Here's What All You Get
By Subscribing to Hidden Treasure. . .
"Equitymaster is comprehensive,
Once every month, we will notify you of an exciting small cap
trustworthy, is replete with rich and
opportunity through our monthly Hidden Treasure report.
well-intended analysis. It may go
wrong - but no malefides only
The report we send will tell you why we think this stock would
bonafides. Intentions of serious
be a good buy at that point, and it will also clearly explain the
research are loud and clear as the
pros and cons of investing in that company.
church bells. I respect their analysis
with healthy skepticism."
As you will know, good reliable small companies are very
- Bhushan Akerkar, a Hidden
scarce and it also takes a lot of time and research to find
Treasure Subscriber since 2013
them.
Equitymaster analysts have to go through many more hoops to find the few small cap gems that exist.

And since it's OUR reputation at stake here, we also have to meet with the managements of different
companies and organise trips to various cities every month to make sure we're accurate in our
predictions.

All this takes time, and therefore just the one new recommendation per month.

But in addition, every month we will also publish the Top 5 Small cap stocks you could buy at that point.

Plus, you also get:

Quarterly results review of all Open Hidden Treasure recommendations
Performance review every month in our report

Why you can trust us to deliver . . .

We've been in this industry for a LONG time. In fact, we were the first Indian entity in the finance domain
to venture onto the Internet.

We've been in this industry for a LONG time. In fact, we were the first Indian entity in the finance domain
to venture onto the Internet.

And now, we have completed over 18 years online.

Today we have over 1,484,807 members from 71 countries worldwide who trust us!

But at the same time, we are NOT stock brokers. We don't gain anything even if you buy the
stocks we recommend.

However, almost all of our income comes from the fee we charge on our stock recommendation
services. And so it's extremely important to us that the stocks we recommended make you money.

That's why...
All our recommendations are supported by thorough research - we list out the reasons to buy and
also the investment concerns that we foresee.
We travel far and wide to meet companies before we put out reports on them
For each stock, we clearly state the target price and also the time horizon for achieving the same
And finally, because we meet various companies face to face, ask tough questions and
continuously track our recommendations... we reduce the risk of a Satyam like situation
emerging in stocks that we recommend.
Here's what one subscriber had to say about our research...
"I am member of Equitymaster since 2008. Time & again they have provided
unbiased reports in all market conditions. Their reports always ensure that we
investors take an informed decision with rationale thinking rather than being
swayed away with the market sentiments."
- Shailesh Mistry, a Hidden Treasure Subscriber since 2011

Another reason why our research turns out to be

accurate more often than not . . .
You see, most investors take the return on stock investment to be the key yardstick while deciding
whether or not to buy a stock.

But legendary investors like Benjamin Graham and Warren Buffett have always maintained that
'evaluation of risks' should be given as much importance as 'estimation of returns'.

It is in this direction that our research team has developed the Equitymaster Risk MatrixTM or
ERMTMwhich helps quantify the risk attached to a stock. The ERM TM is an integral part of our
stock selection process.

Look, we all know that no two large, mid or small cap companies have exactly the same degree of risk.
Even if they operate in the same sector, their business dynamics, managements and valuations are
different.

That's why it is important to evaluate the risk involved in each case separately.

Now the ERMTM is a matrix designed to evaluate the key risks attached to a business, it financial history
and its management. It ranks not just the company but also the sector in which it operates based on its
relative risk profile.
How the ERMTM made and saved
our subscribers money. . .
When markets were at their nervous best in late 2008 and early 2009, our Buy recommendations on
Page Industries, eClerx, and KPIT Cummins were backed by our confidence in the low risk profile of
these companies as shown by ERMTM.

As expected, these stocks went on to multiply our subscribers' wealth several times.

And it was THIS risk matrix that helped us identify the best stocks to recommend to our subscribers
when several of them were looking attractive.

It did so by acting as one of the tools used for eliminating the bad stocks, so that we recommend only the
good stocks.

But that's not all...

Again, it is the same ERMTM that we rely on to quantify the risks we believe subscribers need to
be cautioned about while recommending a 'Sell'.
"My best wishes to Equitymaster. It is most reliable and trustworthy research
House. As a 10 plus of Subscribers, I have experienced their letters are the Best
reported ones with comprehensive, verified and complete coverage of subjects and
companies.

As we all have experienced hundreds of companies disappearing in thin air with the
life time saving of small investor and Government doing nothing to save the
Investors interest, we all should encourage EquityMaster's efforts, so that we
become more informed investor and save our hard earned savings."
- Vinodkumar Maheshwari, a Hidden Treasure Subscriber since 2010

Given the complex operating environment that Indian business are aspiring to be a part of, we believe
the ERMTMcan offer immense value to investors seeking to maximize their long term returns by without
taking on too much risk.
But I won't lie to you -
Sometimes we make mistakes too
Like we made a mistake in recommending MIC Electronics in July 2009...

The key reason for our belief in the company was its prominent presence in the fast growing LED lighting
space, where it is a market leader in India. The company had grown strongly in the past and its balance
sheet also appeared good.

However, despite our good expectations, the company has failed to capitalise on the growth opportunity.
In fact, it lost a major order from one of its key clients.
Then, we also had some issues with the company's disclosure levels.

Over that, the management's silence on the several issues facing the company has been deafening.

Given this, we recommended our subscribers to sell the stock, at a loss of 45% from our
recommended price.

And then there were also Ahluwalia Contracts Ltd and Srei Infra Finance which gave losses of 60%
and 71% respectively by the time we gave a SELL.

But what these events have done is that they have made us even more careful now with respect to our
Hidden Treasure recommendations.

So like I said initially, you can't expect every small cap stock you invest in to be a winner. But even if a
few of them succeed in enduring the ups and downs and turn multi-baggers, you'll make back whatever
you lost in the other stocks... plus a lot more!

Okay?

And here's what else you get by subscribing to Hidden Treasure...

Our special report titled
'Steady Income Smallcaps - II'
Every investor wants to have small caps with large growth potential in their portfolio.

But what if apart from big returns, these stocks also gave consistent dividends every year?

Yes! Then you'd be able to grow your money in not one, but 2 different ways by investing in these
stocks.

Well, few months back we identified exactly 3 such dividend-paying small cap stocks which could do
very well in 4-5 years. In fact since then, two of the three stocks have gone up 18% and 19% already.

But we still believe that the fundamentals of the businesses remain robust, and if you invest in them at
the right price levels going forward, they can offer you attractive returns along with dividends over the
long term.

Hence it would be a good idea for you to keep tracking these stocks consistently so you can grab
them for less whenever their prices drop.

We have included the full details about these stocks in our special report titled, "Steady Income
Smallcaps - II".

Sign up for Hidden Treasure through this offer, and you get this report absolutely FREE.
Easy-Access Version of
Equitymaster's Stock Market Yearbook
Every year, we publish the latest and exhaustive data on Top 300 companies. Plus, a wealth of
information on over 20 sectors, the Indian economy, mutual funds... all, in one place.

This invaluable information serves as a ready-reckoner for any smart investor.

Available in an easy-access installable version and a PDF version as well, this Yearbook provides the
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And guess what? The 2014 Yearbook is also an installable version. So you can install it on your
computer just once and get any information you need at the click of your mouse.
"How to Plan Your Equity Portfolio":
Our Hugely Popular Asset Allocation Guide
Now there is a very important thing you need to know while investing in stocks... And that is asset
allocation.

Asset allocation is the key to having a well diversified portfolio. It is what protects your investments and
ensures their growth irrespective of the changes in the market.

A well diversified portfolio is one where your stocks are properly spread out across different market caps
and different sectors.

Our extremely popular asset allocation guide will help you understand the ideal mix of stocks in
your portfolio, so that you can minimize your losses and maximize your small cap returns.

And you can get this guide absolutely FREE when you subscribe to Hidden Treasure now.

Portfolio Tracker
The Portfolio Tracker is an online utility that helps you track all your equity and mutual fund investments
in one place! It's online, and is available to you 24 hrs a day.

You just have to enter the details of stocks or mutual funds owned by you ONCE... and Portfolio Tracker
will show you what your entire portfolio is worth AT THAT MOMENT anytime you log into it.

Furthermore...
You can set your account to send you automatic end-of-week and end-of-month performance
updates for all your portfolios.
You can set up priced based alerts for all the stocks that you own (and also the stocks that don't
own but only wish to track).
Plus, now you can also track your SIPs and get NAV alerts for the mutual fund schemes with
Portfolio Tracker

But what makes the Portfolio Tracker the indispensable tool that it is are the intelligent reports
that come along with it.

You see, we at Equitymaster have spent a considerable amount of time trying to understand how the
fund managers who invest for the long-term track and review their portfolios.

And it is the relevant learnings from this exercise that we have translated into reports.

In addition, you can also generate customized intelligent reports for your stocks or portfolio, to
understand how a certain market event could affect them.

The Portfolio Tracker usually costs Rs 330 for a year. But by subscribing to Hidden Treasure, you get it
absolutely FREE.
Free subscription to
The Daily Reckoning . . .
Now you can read what knowledgeable investors across the globe read every single day for global
market analysis and investment ideas.

Yes, we are delighted to bring you 'The Daily Reckoning', a daily financial e-column by Bill
Bonner, Publisher and Editor, and three-time New York Times best-selling author.

The Daily Reckoning is published every day in 3 languages from offices in 6 countries - US, UK,
Australia, France, Germany, South Africa.

Now, it's India's turn... and your turn to get it for FREE!

If you're someone who's interested in investing in or even monitoring in the global markets, you'll find the
Daily Reckoning extremely useful.

And last but not the least...

The Equitymaster Research Digest
In case you're wondering how you're going to keep track of ALL the research we publish through Hidden
Treasure...

You'll be glad to know that we now release a weekly email titled "The Equitymaster Research
Digest" which gives you a roundup of all the research published under different services relevant
to you during the week.

Yes! This is a new feature started by Equitymaster and has been appreciated greatly by subscribers like
yourself.

Here's what some subscribers had to say about it...

"The Weekly Digest started by you is very appreciating as it helps investors like me
to understand things easily (thanks a lot to the simple & lucid language being
used). I hope you come out with more such stuff."
- Hemen Shah, an Equitymaster Subscriber

"Some people are throwing their money in the 'Equity Market' without knowing the
real status of the companies and later they will feel sorry for that.

I honestly appreciate "The Equity Master Research Digest" and I feel that people
who are watching this 'weekly digest' will surely have immense benefit out of it."
- S. Sridharan, an Equitymaster Subscriber

So you'll never have to worry about keeping track of or missing any important research from Hidden
Treasure or any of our other services you're subscribed to.

You can just click on a link in your email, and get the full information whenever you want.
And You Can Get All This At More Than 60% Off. . .
For Just Rs 1,950!
A year's subscription to Hidden Treasure usually costs Rs 5,000. But if you act now,
we will give you your Hidden Treasure subscription for Rs 1,950 only... That is a More
than 60% Off on the normal price!

Seriously, this is way less than what you spend on all the phone calls to your broker, the
money you pay to watch the noise on your television, and all the newspapers and magazines you buy
hoping to find good investment opportunities.

And none of these other things can provide you unbiased and reliable small cap recommendations like
Hidden Treasure. With a subscription to Hidden Treasure, you can be rest assured that whenever we
come across little known, high potential small companies, we will notify you of them right away.

Here's what two of our subscribers had to say about Hidden Treasure...
 "Your Hidden Treasure is a beacon of light in these troubled times. I am happy I
took the right choice."
-- P. S. Sathyamurthy, a Hidden Treasure subscriber since 2008

"I have been investing in the market since the last 5 years and have been a lifetime
member of Equitymaster since the last three years. I have found their advice to be
quite unbiased. One good thing about them is that they are constantly trying to
bring in new services via research and analysis which is helping me to get an
objective view on the market. I hope that they bring about more expertise in the
mutual fund market also. I trust them because they have the transparency to go
back and review the performance of their recommendations."
-- Prashanth Nair, a Hidden Treasure Subscriber since 2011

But be warned:
Hidden Treasure is not for everybody!
For instance, if you're nearing retirement or have already retired, I don't recommend putting all of your
retirement money into small caps.

Small caps are for those who are ready to take some risk to make big returns.

While you can make a lot of money from small caps, you can also lose a lot of it very quickly.

Just one good small cap stock could be enough to make you very rich. But to find that one small
cap stock, you might have to go through a few duds as well.

Therefore every small cap investor needs to understand this and plan his or her small cap investments
wisely.

And that's what Hidden Treasure can help you with!

So to summarize, here's all you get by signing up to Hidden Treasure now...
Hidden Treasure for just Rs 1,950 (Normal price = Rs 5,000 for 1 year)
12 well researched and High Potential Small Cap Buy/Buy-at-a-Lower-
Price recommendations over the year!
Quarterly results reviews of these recommendations
Steady Income Smallcaps - II: Our Special Report on 3 dividend-paying,
high potential small cap stocks
Equitymaster's easy-access Installable Stock Market Yearbook 2014
edition. Worth Rs 750, this is invaluable data on top 300 companies of India.
Our Hugely Popular Asset Allocation Guide Free
Free Performance review every quarter
Free access to our "Intelligent" Portfolio Tracker worth Rs 330 per year
Free Subscription to The Daily Reckoning

Again, you get all this at ZERO risk . . .

We had sent out a recommendation to invest in a particular
small cap stock on 15th January 2009.
"I have made my money by following
Equitymaster."
Today, this same stock stands at a profit of 1,811% in a little
- Mohammed Yahyabhoy, a Hidden
over 5 Years.
Treasure Subscriber since 2010
In other words, if you had invested just Rs 10,000 in this stock
when we recommended it, your investment would be worth Rs 191,100 today!

This is the money-making potential of small caps!

So the price of Hidden Treasure should not be an issue anymore. And like I already said, you can try
Hidden Treasure without any risk for a full 30 days.

If it turns out that you don't like it, just let us know before the 31st day and we'll refund the entire fee you
paid. No questions asked!

And, we'll also let you keep the Special report on 3 dividend-paying small caps as a thank-you gift from
Equitymaster for trying Hidden Treasure.

Sounds good?

In any case, I suggest you act fast because...

a. The volume of small cap shares traded is usually very low, so getting in early can make a
difference. By subscribing to Hidden Treasure now, you get that advantage.
b. Through this offer you can get 1 Year of Hidden Treasure for just Rs 1,950 instead of the usual
Rs 5,000... which will be the case till for the next few days only.
So don't squander this opportunity...

This offer will close soon.

[Click here to subscribe]

Regards,

Rahul Goel
CEO, Equitymaster

P.S.: You can now get a year of Hidden Treasure for just Rs 1,950 (Normal price = Rs 5,000 for 1 year).
And in addition, a Special report notifying you of 3 dividend-paying high potential small cap stocks. So I
suggest you seize this opportunity with both hands... while it's still open!

P.P.S.: There's a 30-day money back guarantee on this offer. So if it turns out that you don't like
Hidden Treasure, we'll gladly give back every rupee you paid.

But this offer will be available for a few days only!

P.P.P.S.:Here's what one Equitymaster subscriber has to say about his experiences with investing
BEFORE and AFTER subscribing to Equitymaster premium research services...
"Though I am in the markets since last many years as investor and no doubt money
can easily be made during good times, I realise the importance of a good partner
during bad times, such as the current phase. I fully trust Equitymaster's Wealth
Alliance's impartial & conservative views during all phases/cycles of the market and
they can be fully relied for a fruitful hand holding not only during the current bad
phase but throughout. I respect them for their impartial and unbiased views."
- Surendra Pai Vernekar, a Hidden Treasure Subscriber since 2012

P.P.P.P.S.: If you have any queries, please do not hesitate to contact us at +91-22-61434055 or Write in
to us. We will be delighted to assist you!

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At More Than 60% Off
 Adjusted share prices have been used for Shriram Transport Finance
**Returns have been calculated as on 5th May, 2014 or the date of sell recommendation, whichever is
applicable.
***The total number of Equitymaster members is taken as on as on 14th August, 2012
****Past performance has no bearing on future performance.