Investors lost almost 99% of their wealth in Brightcom Group and Varanium. So some thoughts on mistakes…!
Investing Lessons from Fraud at Brightcom & Varanium Cloud
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Caution on small companies making big promises on hot new biz (AI, ML etc) where they don’t have experience and resources.
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Stocks are discussed too much on social media by a particular set of people might have an interest in the stock that’s why you are seeing one-sided updates (only positive) of the company
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Don’t just buy because some big investor has bought (his/ her allocation could be less than 1% and your allocation going beyond 40% -60% is scary). They can also go wrong.
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Low PE does not mean its undervalued.
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Doing biz or most biz via foreign subsidiaries is the big problem. BCG have zero focus on India but for its peers India is big market. How can media tech company India could not be big market?? does not make sense
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Don’t fall for it just because Index Funds are buying.
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Don’t believe blindly what everything management is saying. BCG lied about its management in Investor PPt itself.
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Try to connect dots… if so many negatives or fishy things better to avoid them.
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Don’t catch falling knife
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Explosive Growth in P&L without underlying growth in Cash Flows and BS is another disaster.
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Frequent resignations in KMPs and Auditors is another recipe for disaster.
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Selling visions and guidance via press releases does not give confidence.
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Signing MoUs, and deals with unknown companies might be fancy but just on paper.
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Promoters are selling, just accept it. Don’t try to neglect other stories like fundraising ki vajah se holding kam hua ya SHP mai error hai.
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Background of KMPs if looks fishy avoid it.
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The degree and the impact of governance issues needs to be check on overall business and fundamentals. Can ignore if small …
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Rise of retail participation in a stock could be another sign of storified stock
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Asset Allocation is very important, don’t buy the multi-bagger stocks on day 1. Mutlibagger Stocks takes years to create Multibagger Wealth…
Kindly maximise the reach of this to save investors …!
Remember two golden rules
A. Capital Protection is much more important than Capital Appreciation
B. Read Business, Not Stock Prices
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