11 Silly Mistakes Of Investors Hunting For Multibaggers

Silly Mistakes Of Investors Hunting For Multibaggers Woman traders busy in analyzing potential multibagger stocks.

(2) Concentrating On Few Parameters Only By Ignoring Others

It is one of the most significant mistakes of investors analyzing multibagger stocks. Stock analysis is not an easy task as one might think. It requires a lot of information to differentiate good stocks from bad stocks.

Similarly, multibagger stock identification is a lot more difficult task than finding a good stock. It is due to the fact that these stocks are mostly away from limelight.

You need to concentrate on a number of parameters before coming to a final decision. But, new & unskilled investors are often in a habit of evaluating a stock depending on few parameters.

According to a post published in MoneyControl, a company which is forecasted to deliver higher earnings is a good bet for your portfolio. But, at the same time investors should investigate whether economic conditions permit such kind of growth multiple.

For example, several investors look for stocks trading below book value, stocks trading at low P/E ratio, stocks trading around 52 weeks low, & many more.

Although, these factors are quite important to analyze a given stock but these should be considered in combination with other factors. It is perhaps true when evaluating potential multibaggers in making.

A stock can trade below its book value because it deserve to trade low. Similarly, a stock trading at high P/E ratio might show exponential sales growth to become multibagger.

Therefore, investors should always look for a wide range of parameters together rather than few parameters only.

[Read Also: 20 Basic Rules To Make Money From Multibagger Stocks]

(3) Rushing To Book Profits Even On 30% Or 40% Upside

It is one of the most popular mistakes of investors sitting with multibagger stocks. Every investment requires reasonable amount of holding time before delivering good returns. It is perhaps true even when investing in multibaggers.

You need to hold multibagger stock until its price is reached to its full potential. But, holding good stocks for long period is not an easy task.

Several amateurs investors who got success in buying true multibagger stocks end by exiting too early. These investors rush to book profits as soon as the stock has shown 30% to 40% upside.

The funny aspect is that on the one hand investors are hunting for multibaggers, while on the other hand they sell a stock just for 30% upside. They don’t wait to even check if the selected stock becomes a multibagger.

However, if the same stock (potential multibagger) falls by 50% then investors can hold them until the original buying price is reached. This is the worst strategy that results in more losses rather than profits.

Fundamental investing is that if you found a hidden gem in stock markets then buy & forget it at least for 3 to 5 years. Thus, your investment horizon should be sufficient enough to allow multibagger investment to get matured for profit booking.

Image Source

  • Mistakes Of Investors Hunting For Multibaggers: Shutterstock

Recommended Posts

More From GetUpWise

About Editing Staff
At GetUpWise, we are a team of professional writers from different areas of subjects. We are conducting thorough research on each & every topic from highly reputed sources before writing any piece of article. Once research is done, we try our best efforts to provide informative piece of articles in an easy to understand manner. It is something that is extremely essential to meet our goal while reaching & offcourse building a strong online community. We do update our articles from time to time in order to provide the most latest information quickly. Thus, our articles can be used as a "way to gain smartness".

1 Comment on 11 Silly Mistakes Of Investors Hunting For Multibaggers

  1. The biggest thing is that newbies need to stop going off of everything they see on a stock message board imo. I’ve been following a board for a long time and no matter what you will always see “pumpers”. Now only if I would have learned this back when I started lol.

    Nice post thanks.

Leave a comment

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.

Get Instant Access To GetUpWise Posts

Subscribe Us

Please do verify your email address by clicking a link sent to your email.

More in Stocks & Mutual Funds
Free Stock Trading Platforms To Cut Trading Cost
6 Free Stock Trading Platforms To Cut Trading Cost

Online trading portals facilitate buy & sell of financial instruments. These free stock trading platforms to cut trading cost are...

Close