Warren Buffett says “If you don’t know jewellery, know a Jeweller”, meaning that if you don’t have stock-picking skills, find someone who does.
The stock advisory market has a number of reputed and top-notch players such as Equitymaster, Basant Maheshwari’s Basant Top 10, HBJ Capital, S. P. Tulsian, Stock Axis etc, etc. These services promise to uncover hidden multi-bagger stocks. Some of them have had great success, while others have failed.
Let’s objectively analyze the performance of Katalyst Wealth, which is run by Ekansh Mittal. Some of his stock picks are in public domain while others are not. Obviously, I cannot reveal the names of the stock picks that are not in public domain. However, what is important is that the stocks that are in public domain are still great buys.
First, the good news is that Katalyst Wealth’s stock picks have given a return of 60% over 24 months. This, as any accomplished investor will tell you, is a great achievement. If you can consistently compound your wealth at 20%, your money grows 6 times in 10 years. If you can get a 25% return, your money grows 9 times in 10 years. At 30%, your money increases 13 times in 10 years. In other words, at 30%, Rs. 1 lakh becomes Rs. 13.78 lakh in 10 years. In 20 years, Rs. 1 lakh becomes Rs. 1.90 crore. In 30 years, Rs. 1 lakh becomes Rs. 26.19 crore. Impressive, isn’t it?
This strong performance by Katalyst Wealth has been attained by focusing on a few small-cap and mid-cap stocks, with strong fundamentals and low valuations.
Leading the list of winning stocks is Cera Sanitary Ware, which was recommended in October 2011 at the price of Rs. 200. At the CMP of Rs. 860, one is looking at a 350% gain in 2 ½ years, which is incredible by any standards.
Next in line are stocks like VST Tillers, Amara Raja Batteries, Supreme Industries, IPCA Labs, Atul Auto, CARE, Swaraj Engines etc, each of which have given fabulous returns. Several of these stocks have given 100% + gains.
The best thing is that these stocks are still strong performers and can be bought even now. You can read the research reports to come to terms with the potential and risk factors of each stock.
Among the recently recommended stocks that are not in public domain is a consumer goods company that scores well on all parameters such as strong management, debt-free status, market dominance etc. The stock has given quick-fire returns of 50% since Katalyst Wealth recommended it. Similarly, another small-cap pharma company, which was recommended recently, has given quick-fire gains to its delighted investors.
Of course, this is not to suggest that all of Katalyst Wealth’s stock picks are winners or have given quick-fire gains. Some have disappointed and given losses. Others have just languished for a long period.
Fortunately, at the end of the day, the winning stocks have heavily outnumbered the losing stocks and this has contributed to the strong overall performance of the portfolio.
Another unique feature of Katalyst Wealth’s service is Ekansh Mittal’s constant goading that investors periodically share their portfolio allocation details with him. He reviews the portfolio and offers suggestions on whether they should increase or decrease their allocations. So, there is a lot of hand-holding that you may not get with the other advisory services. If you are a rookie investor, this kind of hand-holding can help soothe your nerves and increase your confidence.
The other positive feature of this service is that unlike other advisory services that smother you with stock recommendations (a pick a week, 52 stocks in a year!), Katalyst recommends only a few high-conviction stock ideas in a year.
The sense I get is that Ekansh Mittal is very conservative in his stock picks. He hates taking chances and risking money. If he does make a mistake (which is rare but not unexpected), he is quick to recommend an exit before further damage is caused. Also, he likes to stick to stocks and sectors that he understands and is comfortable with. All traits of a sensible value investor, who is investing for the long-term.
So, if you are looking for a stock advisory service, you need to give Katalyst Wealth serious consideration. At a rock-bottom fee of Rs. 5,500 for 6 months, you really do not have much to lose and everything to gain.