We are presenting below a Small-Cap Stocks Strategy
When investing in small and mid-caps, you won't ever get the perfect company...as an investor it's important to determine what level of imperfectness you are comfortable with and accordingly determines the allocation to the stock.
Multibagger companies coupled with good fundamentals & if by chance promotor turned out to be good than additional supporting elements.
Take the correction in the market as an opportunity to shift your portfolio to quality businesses with good growth visibility over the next two years period. Get out of stocks where you have the slightest doubt about management quality, cash-generating capacity, or debt servicing ability.
If you are making investments in small-cap business then don't forget to book profit at reasonable intervals because small-cap having high risk and minor corrections wipe out all profits made in one year.
People want to do all research when they open a shop somewhere. But in stocks they want weekly doublers cheap (by price) and without any study/homework
Whenever there is a good fall in the market we should take advantage of the "Exchange Offer". High-Quality stocks also fall by more or less the same % as Lower Quality stocks so we should exchange them. Once the market rebounds you want to be with your best players and not with the injured ones.
People try to screen and put in so much research to find out only a new name. After that, they take a poor bet on the same (as they are already holding 25 other scrips) & then exit with 30-60% returns.
When your stock is moving according to ur calculation it doesn't mean that it will become a multi-bagger..a sudden crash will erode all your money if it is not strong with its fundamentals & future growth. So take utmost care about your picks.