'Generally' not so useful advice

Apurva Sheth
In my last article I explained 3 trends that exist in the markets. The primary trend (1 year to several years) defines the long term direction, the secondary trend (weeks to months) defines the medium term direction and the minor trend (weeks to months) short term direction.

Now let's tackle the second part of the problem.

Seeking general advice from television channels or for that matter even newspapers does not cater to your specific investment goals. So it is necessary that either you do your own research or if you are ill-equipped for it then you get access to research which suits your style of investing.

An investor can easily access to 'free' research from his broker. Now answer this. Why will a broker provide 'free' research? Does it make business sense to give away anything for free without expecting anything in return? No! A broker always faces conflict of interest in terms of providing honest advice and generating volumes to earn his bread-butter.

Next comes the independent advisor who charges a percentage of profits for the research he provides. He will work for your best interests and see to it that you make money. But here again he will be more eager to book out so that he gets his percentage share of profits which helps him pay his bills.

Lastly, there are firms and individuals providing independent research who charge only for the research they provide. Their survival and growth depends on the quality of research they provide. The moment the quality of their service declines their subscriptions take a hit. So there's a direct relationship between the two.

When I look around for them, the first ones that come to my mind are our friends at Equitymaster. Whom you all know very well. (Let me tell you at the outset that we have a China wall between us and they are nowhere involved with the research that we do here at Profithunter)

I will tell you why I am speaking about them now. You see they are in business since 1996. They have gone through a couple of business cycles. Surviving through bad times proves their mettle in research. When I looked at the services they offered. It immediately drew my attention to the market cycle model I discussed earlier. They have services catering to the Primary and Secondary Trend. I have illustrated the services they offer along with the market cycle model.

Market Cycle Model on Equitymaster Services
Source: Profit Hunter

Value Pro, India Letter, Hidden Treasure are services built with a horizon of more than 3 years and cater to the Primary Trend. Microcap Millionaires and Stock Select are built with an investment horizon of 2-3 years and cater to the intermediate trend.

We at Profit Hunter have Alpha Trader which caters to the Minor Trend in commodities and currencies. We may also start a new service focusing to gain from minor trend in equities in the near future.

My purpose of telling you about these services is nothing but to drive the point about trends clearly into your mind. And I thought this would be the best analogy to communicate this point.

In my next article I will dig deeper and show you how to identify these trends with the help of specific tools.

Have you had a bad experience following general advice from TV, newspapers etc.? Share your views in the Club or share your comments here.

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4 Responses to "'Generally' not so useful advice"
Raviraj
25 Dec, 2014
I agree with Apurva that the services provided EquityMaster is trustworthy. And when applied with TA we will be able to achieve much better results based on individual's requirements (Short/Medium/Long Term). I'm eagerly awaiting the swing trading service.Like 
naveen
22 Dec, 2014
When I started investing, I would eagerly scan the newspapers and seek out websites for advice on stocks to buy and sell. It did not take long for me to realise that most of such advice was worthless. An astounding 95% of the calls given by these so called experts are wrong. I wonder why they are called experts and why their views are published in the first place. Slow and painstaking research done at your own end helps more than anything else. Like 
Drjlbansal
20 Dec, 2014
Dear Apurva,As you are starting new swing trading service from January,2015, some Qs are there-: As swing trading involves both equities and indices,what is your proposal.Will it be in Cash equities long only(least risky) or in stocks future both long and short.will you advise swing trading in nifty and banknity. Like 
PRAKASH TANAK
20 Dec, 2014
" The funny part of these news channels - last week when HPCL was falling they said it is falling because of the falling crude prices, day before yesterday when the prices rose they said the price is rising because of the falling crude prices. This is how they play with the emotions of the people who watch and read these stories."Like (1)
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