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Good to Great

September 16,2016 Stallion Asset Blog

We at Stallion Asset concentrate our studies based on data on wealth creation. Today i am going to reveal a Secret which will make Stock Investing simpler for all of you.

“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” – Sun Tzu

Have You ever seen a Dealer at the Casino nervous after loosing 3 consecutive games? The Answer is No, but on the other hand if a Gambler loses 3-4 games consecutively he will get nervous and probably order a whisky. This happens because the casino dealer has a strategy in place and he knows he will win repeating the same thing again and again.

The Only thing consistent about markets is your strategy. We at Stallion Asset don’t Trade Stocks, instead we believe in a strategy. I am very confident that our Strategy of Growth at a reasonable price will consistently outperform Markets.

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We at Stallion Asset are in business of Buying Multibagger stocks and holding them. According to our Wealth Creation Study, Companies become Multibagger’s because of a Transition.

The 3 Most Important Transitions are

1)Worse to Bad (Highest Return)

2)Bad to Good (Stallion Normally Invest’s Here)

3)Good to Great


Worse To Bad – These Transitions normally happen to due change to change in Management, Change in corporate Governance, asset Sale, or Change in Macroeconomic activities. Lately the Rise in Sugar Stocks due to rise in Global Sugar prices and Paper Stocks Come under this category. These are not sustainable for long term as these business’ continue to remain bad.

Bad To Good –  These Transitions Normally Happen due to change in Macroeconomic Environment.  They last an entire business cycle of 3-4 years. This is where we at stallion Asset concentrate as we believe in Buy and Rotate approach. The recent change in Cement Stocks due to pick up in Infrastructure activity is an Example of this Sector.

Good to Great– These are Normally companies where visibility of earnings of Increases. The more longevity of Growth market senses, the more valuation Increases. Consumption companies are an recent example where market expect sustainable growth of 15-20% for next decade hence all these companies trade between 30x-50x

Conclusion – The Current Real GDP Growth of India is about 8%, adding 5-6% Inflation to it, Increases Nominal GDP Growth to 13-14%. There will be Sectors growing at 25% and there will be sectors growing at 2%. We strongly believe that wealth will be created if your in the right stocks in the Sector growing at 25% in this bull market rather than bottom fishing 2% Growth Sectors.

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