In past cycles, operators took vulgar companies and made them look good.

Now, they take good companies and make them trade at vulgar valuations.

That is the difference.

Always read the oldest 10-K you can find on a company

Reading the oldest 10-K will give you added perspective on the business and it'll get you thinking about how the business has changed over time/how it will change in the future

Bull markets are a great time for fraudster promoters to make money. If you are a fraudster and also want to benefit from this bull market, here's a thread that explains how you can defraud shareholders and get rich.

1. Have a good story to catch investor's attention. Something like "only listed XYZ company" will help. Has zero value in terms of improving long-term cash flows of the business but is excellent branding for a stock. Change the name of the company to what's booming in the market

2. Draw analogies to D-Mart or other businesses that investors love (next Page Industries maybe?). Doesn't matter if your business is nothing like the ones you are comparing it with.

3. Give aggressive guidance. 15% growth is pedestrian. Talk stuff like 1 lakh cr sales/loan book or 50% growth for next 10 years. Your stock should be a potential multi-multi-bagger. Claim that there is no limit to how large you can be.

4. Start making up the numbers. Only Revenue and PAT matters. So don't worry if the Balance Sheet has all sorts of large unexplained scary stuff. No one looks at the BS in a bull market.

@varinder_bansal Realty sector main jaan aa rahi hai

Some stocks are undervalued just because they underperformed in down cycle than their peers. The key thing to note is that they will outperform their peers in up cycle.

To sum up, try to find undervalued market leaders who underperformed because of down cycle of the sector.

Bull runs in small caps are usually fast and furious, and the cycle repeats itself every 3-4 years. Every time, retail is sold stories of business turnaround and stock charts look fantastic for meteoric wealth creation. For the class of 2020-21, here's a couple of past stars.

These small cap stocks with 30-40 crore market cap went up 23X and 11x in a span of 24 months between April 16 and April 18. The story looked great then, but subsequently once liquidity and interest disappeared, the prices went right back to where they came from.

When in the thick of the action, it can be difficult to keep a level mindset. To keep the narrative believable, these companies are able to massage their top-line and bottom-line for a short period of time to show an imminent turnaround. Note the trends in these financials.

The company usually exhausts its ability to massage the financial statements very soon and the business health plummets dramatically. One collapsed so dramatically it has been selling fixed assets. The other one is Uniply Industries - a simple search on Twitter will suffice.

Newer small cap investors may be subscribed to many Twitter handles, Telegram channels, groups and even premium advisory services. Don't take anybody's word for the narrative being sold to you. On-the-ground-research and scuttlebutt can be plain fiction.