As per Tim Melvin – "Warren Buffett once said that if you are not willing to own a stock if the exchange shuts down for five years after purchase, then you should not buy the stock. When I buy a stock I am looking for five years or longer. I have no need to be able to get out at any instant. I expect to sell it the same way I bought it, slowly and carefully."
"I find that buying less liquid stocks makes me more focused on the initial analysis as well. If I can't get out immediately, I want to make sure I am right about the value of what I own."
Equity market is a sea of opportunities. Opportunities exist in the form of common fishes, exotic fishes and pearls. Pearls are rare, less in quantity but value of the same is much higher than the normal catch.
DSIJ, with its 30 years of research strength, brings to investors its product "Pearl Pick" which aims to thoroughly screen the low float stocks and pick ones which have demonstrated consistent financial performance and management rigour.
The product is suitable for high risk, high return investors. Low float stocks are highly volatile and investors need to have a high risk appetite. As per our research, low float stocks demonstrate volatility; however, holding the stocks for the long term can reap manifold benefits and with improved financial performance, investors can also benefit from the liquidity premium enjoyed by the stock compared to its liquid peers.