How a Tipster Makes You Lose

The modus operandus of some tipsters.

These are the steps he follows:

1. Go to ICICIdirect.com, and click on Research=>Custom Screen

2. Choose "Small Cap" in the screener, and screen companies for low debt/equity ratio

3. Pick the list of small-cap companies

4. Recommend them because they are debt-free

What blind followers do:

1. PAY 10 TIMES THE MARKET CAP/SALES RATIO OF THE COMPANY, based on recommendation!

2. End up paying 10 times Book Value

3. Wait eagerly for rise

What actually happens:

1. Small-cap company's quarterly results are dismal

2. Share price falls

What tipster does:

1. Calls it speculative call OR

2. Calls it long-term buy

Sure-shot way to lose money!