MULTIBAGGERS
In the stock market we often hear this word. The simple description is any investment amount is called a “bag” so any investment appreciated by 100% becomes two-bagger (initial investment = 1 bag + appreciation of 1 bag). So any company to become a multibagger needs to appreciate atleast by 100%. We are often mislead by many brokers stating a stock which runs from 40 to 60 as multibagger, which isn’t true. It’s mostly used for shares which you expect to give multifold (multibagger) returns in future.
The main thing with stocks is if you keep on timing the market chances are that you lose most of the times than win, whereas, it is always safer for a retail investor with patience to invest in such companies which currently are available at low valuations and in the due process over a span of a year or three years would expand/increase profits and thereby demand a re-rating and high valuations. The best way to accumulate such stocks is via SIP ways. Wherein a small amount is invested every month in a particular stock for some duration and let the investment grow for a year or two and then reap all the benefits.
Before anyone asks any further questions, I would like you guys to read the following interview by RAKESH JHUNJUNWALA and try and understand the mentality of his stock-picking art.
The following link will take you to the above mentioned INTERVIEW
http://www.rmdhar.com/index.php/2010/07/05/rakesh-jhunjhunwalas-tips-on-how-to-find-multibagger-stocks/
Disclaimer: Investment in equity shares has its own risks. Sincere efforts have been made to present the right
investment perspective. Do your own research before you invest, not after investing. I can only guide/share but cannot guarantee 100% targets.
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