Prudentequity.com stock advisory services review

Guys be aware of Prudent equity!!!

One of my friend was saying its a bad situation at a prudent equity, it seems that their new subscribers are frustrated coz no stock recommendations since 1.5 month and when they recommends stocks it crosses the recommended price by 10%-15% even before the subscriber logs in to his trading account, lols. This is due to their large subscriber base.

The funny part is that new subscribers receive sms at the last, the smses are triggered starting from their first subscriber.

To cool down their subscribers they have come up with long term stock recommendations for free/optional & cash stocks which are at subscribers risks, i.e. no research report from prudent equity side.

In addition they have big investors with crores of cash, who do short selling so when a stock is about to reach the recommended price they buy it first and hits their small subscriber. really sad.

Their subscription is also expensive, 20k.

 

Now prudent Equity has increased the amount from 20k to 25k. I'm not sure whether to Subscribe or not. Can anyone please suggest?

 

1 - No regular updates for already picked stocks.
2 - No discussion forum for queries.
3 - They have some assistance on whatsapp but it's not efficient and support is not always what you would expect.
4 - Too many stock picks ( usually one every week or two weeks)
5 - Haven't seen any exit calls for any of previously selected stocks.

They still have a long way to go..

 

I am contemplating too. But might subscribe in next few weeks.

 

I emailed them and have rubbished all above mentioned claims.

 

I am thinking of joining Prudent Equity. Those who have subscribed to their service, please confirm whether the returns mentioned in their website is true.

 

When I joined I had 5L investment. It is about 4% expense ratio.

Later I switched my mutual fund holding to PE stock picks as the return were very good in comparison to mutual funds

 

All I can say is that you try for yourself. They have good renewal rate. Many people including myself have renewed ahead of term.

I have always had good returns from personal investing but return of PE are even better than that. It is not get rich quick scheme though you typically need to hold the picks for 1-2 years unless they runup sharply.

 

Only to those genuinely seeking a good stock advisor:

I have/had been an active subscriber of EM, PE, PA, SG, KW etc. Based on my experience, PE stands out for both capital appreciation and more importantly capital protection. If you look at their performance chart in their website, dont be just awe-struck on %return alone. This is past performance and may not be reproducible. You need to look at the quality of the stocks recommended to understand their investment philosophy if past performance can be repeated on your money. You can easily find out that PE picks up stock much earlier than any others and they pick up at seed stage while others wait till they see a green shoot or a mature plant. Additionally their success ratio in finding the right healthy seeds is > 95%, which is amazing.

Repeating what i said few months before, it is your hard earned money. You need to pick a stock advisor based on your temperament.

To be honest with you, DONT choose PE:

• IF You are a trader. Or your investment horizon is less than 1 year.
• IF You look for stock recommendations monthly like what you might be used to in other services. At PE, stocks get recommended if opportunity appears for both capital appreciation with sufficient margin of safety for capital protection. Ask any subscriber, their capital on any stock is not under water. Stock recommendations at PE could be lumpy but rest assured, based on past 4 years, there were more than 12 recommendations/opportunities that your capital can be deployed in 1-1.5 years of joining them.
• IF You cannot be patientful or cannot practice patience after joining PE. You have to be patientful not only in holding stocks but also in holding cash, if you want to be a successful long term investor. Patience is a key virtue practiced at PE (and trust me, it will be doubly rewarding - when others are worried about market collapse, you will be euphoric at PE). "Be a lizard" and wait for your opportune time to hit the target - is what PE preaches.

Dont bother about high subscription fee. It is increased every year as members grow their capital and members are happy to renew as well. If you have capital of > 5 lakhs (min capital threshold = 3L to recover your costs, assuming 10% return in extreme worst case), dont hesitate in choosing PE. Experience of most members after 1 year of joining is that they would liquidate all other assets (MF, FD, other services etc) and route into PE stocks.

PE is more about capital multibagger than stock multibagger, and that is what we as investors want. They capture the uptrend even though they are not technical analysts, and also they rightly avoid time correction, so that capital is always at work growing multifold. They dont brag about stock multibaggers but most of their stocks after their sell call become multibaggers - when others put their buy call, PE would have issued partial/full sell and moved to next opportunity to grow your capital.

 

What i heard is that their subscriber base is not at all large, because PE does not do marketing (no free newsletter subscription, no periodic offer emails to past customers etc) and only word of mouth publicity. Two years back, i have to find them listed on 50th page of google search of stock recommendation service but today they are not only on page 1 but first entry. I joined them not by looking at % return but the kind of stocks getting recommended and when they spot them.

Looking at the volume on their stock recommendations on day 1 which is not tallying with their subscriber base, PE did a detective work and busted 8 whatsapp groups (around 700+ shadow members) which shadow PE recommendations. So the pseudo subscriber base run by illegal unethical copycat people could be large.

BTW if you join ANY equity recommendation service of repute, their first day stock shoot-up would be > 10-15%. This is due to the rush exhibited by retail members in buying the stock at any cost. We ourselves are to be blamed for this behavior. PE takes care of this 10% increase on their margin of safety, and stock having potential to double in 2 years even at 10% rise. So you as a subscriber at the end of 1 year will always feel good, and would be in a mood to route all your other assets to PE recommendations.

Einstein said that the eighth wonder of the world is compound interest. If you are long term and interested in capital multiplication and to experience this eighth wonder in your wealth creation journey and looking for the right stock advisor, then PE is one of the wisest choice that you cant afford to miss.

 

Good write up on PE. Difficult to run fee based service because everyone wants free. (Not talking of specific case but talking general). In software and movies so much piracy is seen. Even books pdf copy can be downloaded on Internet. Basant Maheshwari stopped services because of piracy and started pms service. How to survive in fee base model in age of whatsappa and Internet. We have to think hard how to save business model based on Internet delivery of services otherwise it is doomed.

 

I think one solution is to reduce fee to low figure then it becomes not worthwhile for pirates to copy recommendations (talking general and not any specific case). If fee is very cheap why people will cheat if it is so affordable? Revenue loss is made up by huge volumes of subscriptions. So everyone benefits by this IMHO.

 

Since you have subscribed to multiple advisories, do you have the %returns for each of those mentioned (of the same year) by you and can you publish the returns for comparisons.

I am only looking for returns comparisons so that we don't have to shoot in the dark regarding different advisories and people can choose the advisory (keeping the returns comparison as one of the parameter).

 

You can directly ask these companies to share their performance returns and you can compare yourself. This is public domain information.

BTW comparing just returns is what you should not do. %return is past performance, and that too in a given year. Try to understand their investment philosophy, how sound their stock picking ability and see if that matches with what your temperament/expectation is. There are 100+ sub-disciplines in value investing itself and each is successful in its own respect and time. Your style and your advisor's style have to match, else you will not be happy as stock market is very volatile and zig-zag in its behavior (over long term, returns would be up against other assets). If you dont have any idea on investment philosophy/style, you can better go for Top 3-5 diversified equity mutual funds and be peaceful.

In terms of relative returns, my experience is: PE > {KW, PA, SG} > EM. I know there would be someone here, who would ask me for proofs (contract notes etc) with stocks invested etc - I am not a marketing person for these companies, please excuse.

 

Every stock advisory has to close their subscription if number of subscribers (mainly their capital) exceeds what their investment approach can cater to, for a given good quality of service. If there are more capital chasing a given stock, both buy and sell experience would be distorted, leading to poor customer experience and bad mouth.

So i am for increasing the subscription fee as the quality of service goes up, while restricting new subscription. These advisories if they are not money minded, can implement their own KYC norms, restrict people and personally understand their customers and service them better.

Value and Price go hand in hand for any asset (goods and services), including stock advisory service. So price has to go up based on increasing value. If price is constant or more discounts offered to customers, then value of the asset is proportionate. This is a clue to identify good services from bad. Check if their subscription fee over years are going up or not. If not, time to wake up. If you are offered discounts, then also time to wake up - because some other new customers in future may come at lower price than what u paid.

 

Good suggestions I also would like to know comparing returns of stock advisors versus model portfolio return. Only problem is big fight may start on who is best advisers and create Big headache for everyone.

I think rule should be there that advisers must get return audited by CA firm. Even if rule not there it must be voluntarily done by adviser to create confidence in public and stop controversy

 

Point is there. It is difficult business model.

 

Yes, true. And all stocks recommended over all these years are listed in full, and nothing is omitted out. Beauty is not in their returns but in the nature of stocks recommended. PE is/was very successful in finding them young and in their uptrend with a hit ratio of more than 95%, and in few misses, loss % is much lower (in the noise).

Why i am doing this - is it not a promotion, yes - personally i dont want to do it as it affects my returns (more capital chasing a stock at the same instant is not good for me). But then, there is a need to weed out proxy illegal unethical copycats (invisible enemies). Genuine retail investors find it hard to find credible stock advisors and when someone does good, it is better to vouch for them - tripadvisor model rather than mouthshut model. Additionally i am hoping that PE might close subscription one day, once they hit their target numbers (it is in their minds) that they feel comfortable serving and retain happy customers. Similar to some good quality Smallcap/midcap mutual funds that close subscription once in a while and open up only when they feel they can grow customer's money.

 

Except for PE, no other advisory has put their returns openly (at least that I know of). We should congratulate PE for that.

Once you request for any information (including returns) from the advisories, they will start calling you and trouble you to the maximum extent.

Finally, I go with a advisory based on the amount of return they help me make in the long run. Please note that I have mentioned LONG RUN as many of the advisories will be weeded out if they are not maintaining returns, customer satisfaction etc.

Are you saying EM is the least returns provider or based on other parameters?

 

At least they should beat the Index (whichever index the stocks comes to or average of the indexes) comfortably and secondly they should beat the Mutual Funds returns as well.