Statutory Warning for Small Cap Investors

Finding good investment ideas in the small and midcap space in India is hard work, especially given the history of poor corporate governance standards.

Using screeners on the reported financial statements to find high growth businesses with high ROEs may seem to be the easiest way to find good ideas.

However, investors would be better off spending their time understanding the source of high growth.

Blindly relying on the company’s reported financials and/or management commentary can be injurious to portfolio returns.-from 2Point2Capital

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