Stay the Course with Equities. Volatility isn’t the Time to Sell.
As opposed to individual analysts, who normally come out with one or two recommendations at a time and continue to hold on with the same stocks for an extended duration, Vivekam risks its neck out and comes out with a list of top 10 stocks eligible for investment on any given day and stores such information in a chronological manner, so that any interested individual can check them at a later date.
Where did we stand on our recommendations?
Instead of reviewing November month’s performance, Vivekam has decided to review the performance of recommendations given out by it in the whole of 2013. As you are all aware, Vivekam gives out its top 10 recommendations on a daily basis as shown above and such list is made available through its website. SPOTS service from Vivekam facilitates viewing of top 10 recommendations on any day of investor’s choice.
In most cases, companies announce results once in three months and therefore the maximum validity of recommendations given by Vivekam should be taken as three months. In order to check the efficacy of Vivekam’s recommendations, we have split the first nine months of 2013 into three quarters that end on 31st march, 30th June and 30th September. Before we present our findings a few lines about the methodology adopted may make sense.
In the first quarter of 2013 we have noticed that there were 62 trading days in the market and therefore Vivekam must have come out with 620 choices, at a rate of 10 choices on every trading day. It is true that some companies may have been repeated across different days if they continued to be the top preferred stocks by Vivekam. To measure the success of recommendations given out by Vivekam, we intended to check the performance, of every stock given out on every day, with that of index in the quarter. The methodology adopted is to pick up the recommended price and the maximum price recorded by stock from the date of recommendation till the end of quarter. Afterwards we pick up the value of index on the date of choice and also pick up the maximum value index reached before the end of the quarter. If the price differential in stock (price rise, if any) is more than that of index (measured in the same way), it is considered a success. Otherwise it will be considered a failure.
To take this testing process to a new level, Vivekam compared all top choices, only large cap choices and only MidCap choices using the above methodology. The table provided hereunder lists out the number of choices given in each category for all trading days put together followed by the number of times Vivekam’s choices have appreciated more than index and the percentage it meant. If you see the numbers for all companies in the first quarter, there were 620 choices given by Vivekam and out of them 534 companies or 86.13% have done better than index. In the same quarter, Vivekam also came out with 620 recommendations of large cap stocks and out of them 525 or 84.68% have performed better than index. When it comes to MidCap stocks, out of 620 recommendations given by Vivekam, 543 or 87.58% have beaten the index in that quarter.
On the same lines, when we check quarter 2 numbers, the success rate of all companies stood at 74.13% while the rate for large cap and MidCap stood at 77.94% and 76.83% respectively. When you compare quarter three numbers, the percentage of success for all stocks, large caps and MidCap stood at 75.16%, 63.87% and 79.84% respectively. With the exception of large cap stocks in quarter three, where most Midcaps’ have outperformed the index in the broad market, Vivekam never fell below 74% success rate in its recommendations. All these choices are available to any investor through our website and can be verified at any point of time.
Such a high success rate of successful recommendations is possible with Vivekam only because it believes that INVESTMENT IS A SCIENCE AND NOT AN ART.
Further, Vivekam automated the whole process of short listing the growing stocks, arriving at a fair value for each and every stock and ranking them in descending order by comparing the market value with the fair value. Only because the entire process is almost impersonal, the chances of manual errors are eliminated and the hypothesis, on which Vivekam had built its strong foundation, is validated.
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