If you are reading this newsletter and have been following Sadhan then till now you have watch 35+ Stock Analysis video (Checkout the Playlist
Now you might want to have a investing framework where you can place these winner stocks so that you can create a Portfolio for long term. So I present to you the Playbook of a legendary Indian Investor Bharat Shah.Having a 25 years of experience in the field of investment management, he has a considerable understanding of global businesses and stock picking is his forte. His investment philosophy emphasizes buying quality businesses enjoying superior growth but at reasonable valuations. In 2013, he authored a book entitled “Of Long-Term Value & Wealth Creation from Equity Investing: Observation, Ideas and Reflection”.
Bharat Shah’s book offers a great investing framework which I found very useful.
He used a very interesting framework for finding wealth creators stocks. The holy grail of investing is Investor’s ability to identify Earnings Growth Quality. He uses the concept of Compounding Multiplier (CM),
where CM = CAGR of investment returns/ CAGR of profits over a period.
It basically denotes returns generated per unit of profits. There are 6 categories but we shall be focussing on Top 2 in this article. You can watch this video simplifying the framework
Category 1: Winners
(Note: We have used CM=CAGR of investment returns/ CAGR of profits over 5 yr )
Here comes 6 interesting stocks satisfying this criterio: