Our key objectives are, first, to protect your capital, and second, to see it grow at a healthy rate.

We strive to build up a portfolio of stocks carefully chosen through a focused and disciplined approach. We are not market timers trying to predict the tops and bottoms of the market. The strategy is to acquire equities of strong and profitable businesses run by smart and credible managements at market prices well below its intrinsic worth. At TMP, you can see in real time how wealth is created.

- An Offline PMS [http://www.themillionaireportfolio.com]

HBJ Capital, India Web: www.hbjcapital.com E-Mail: Info@hbjcapital.com Call: +91 98867 36791

HBJ Cap is growing faster than ever. HBJ Capital can be your 50x in 3years investment. Ask how?

Aim to become #1 Equity Research Company in India by 2012, the same year we have planned to get it listed at BSE/NSE.

What Next?

HBJ Capital – “Specialists in discovering multibagger stocks” is launching more & more innovative products & services with single focus on long term wealth creation!!!

Table of Contents

           

From the desk of CEO, HBJ Capital - Page#4 Current Portfolio (June 16th 2010) - Page#5 Transaction and notes - Page#6 New Portfolio – Page#7 Portfolio objective – Page#9 Business model and working – Page10 Service features - Page#11 Service suitability - Page#12 Investment methodology - Page#13 Portfolio allocation - Page#15 Key people - Page#16 Communication on portfolio update - Page#18

From the desk of CEO, HBJ Capital
Dear Members, First, to give you an update on the performance, the TMP has recorded gains of more than 80% compared to 5% gains from the Sensex. TMP has been clearly making its march forward after consolidating at various levels. We believe that the tremendous performance will be carried forward. For this edition, we have made 4 changes – 1 SELL and 3 BUY positions. It is to be noted that the portfolio allocation has also considerably increased from less than 56% to 63%. We had to sell some of our existing counter in order to cap the allocation levels at 65% and we choose to do it with xxxxx. xxxx, yyyy and zzz were the ones that we considered and finally we went ahead with xxx. While we believe that yyy can appreciate by 50% in another 10 months by way of earnings growth, considerable order wins that are expected by the company can also have its impact on the counter. zzz is actually coming out with record earnings and the stock has not probably reacted to it. In our previous edition, we had already tipped you off that “We are expecting significant changes in, the portfolio in the next 2 or 3 months. Some of the stocks in the portfolio may entirely move out and new stock can replace them. We may also sell some of our stocks in our portfolio that may be at a loss and replace it with some of our new recommendations.” We expect the same to continue. We are expecting the portfolio to get more and more concentrated during the current reshuffling phase which can continue for one or two more months. We expect that the TMP would contain just 7 or 8 stocks with allocation levels of more than 85%, by the end of this process. And as for the markets are concerned, we expect volatility to continue, but we believe that TMP has already got use to it and is best placed to make use of it. Happy Investing. Kumar Harendra, CEO, HBJ Capital Services Pvt Ltd, www.hbjcapital.com, Address: #912, 1st "F" Main Road, Girinagar Phase II, BSK 3rd Stage, Bangalore - 85.

Current Millionaire Portfolio (As on June 16th 2010)

Hidden

Transaction and notes

Hidden
Confidence Petro – The earnings are good, the projections look even better. But stock price does not seem to be Hidden going anywhere. It was at least from 7.7 levels before and even that is not happening nowadays. We are exiting the counter now. But, the thing is we know what this company is into and how good the business growth can be. So, it should not really be a problem for us to come into the counter again when we feel that the stock price can move. We may be losing 25% or 20%, but that should be fine.

Hidden Spice Mobility – Finally, even the name change has happened. Currently we are buying into a 1200 Crore company, which we believe has a strong future especially on a longer run with all its related units merged together. We will buy more at 64 or lower levels. Hidden Camson Biotechnologies – This is one of our oldest recommendations. xxx, after making a high of 210 has come down by 25% to around 150 levels. There has been weakness in the counter for the last few months, but it has been trying to form a base at around 150 levels.
The company is currently carrying out expansion plans in various spheres. The marketing team, the product portfolio, manufacturing facilities are all being expanded. We expect the company to post strong earnings for the next 2 years, especially FY 12. The weakness in the counter can take it to 130+ levels and if that happens, we will buy again.

Hidden Geodesic – Looks extremely cheap at current levels – 3.2 times on just the annualized earnings on Mar quarter. The company posted YOY positive growth numbers in Mar quarter and we expect the trend to continue. Fundamentally speaking, the valuations should improve.

New Portfolio

Hidden

Basic info on TMP (The Millionaire Portfolio) operation

Portfolio objective
To create sustainable wealth for the subscribers over a longer period of time (read 4 to 5 years). To maximize the returns from equity investments and to perform better than the broader indices. By leveraging on the HBJ Capital’s recommendations, which are mostly well researched potential wealth creators from the mid cap, small cap & micro cap segment, the portfolio will target achieving 8 to 10 times returns in 4 to 5 years of time period.

Business model and working
The Offline PMS Service will work more like a regular PMS, but with some minor differences. In a regular PMS or a Mutual fund, excluding the market factors, the success of a portfolio will entirely rest with the Portfolio Manager. However, in the case of an Offline PMS, the success of the portfolio depends on both the Portfolio manager and the investors. The Portfolio manager creates and maintains a portfolio, while the investor will replicate the portfolio with discipline. Any new customer will be provided with an initial portfolio that he may need to replicate. As and when any changes are being made to the portfolio, the investor will be informed of the changes through a detailed report included in this report. The changes to the portfolio will be made only after the market hours, thereby giving sufficient time for the investor to take action. The Portfolio manager will start with an initial investment of INR 10 lacs (1 million). The investor will replicate the equity holdings by applying the original ratio of holdings to his / her portfolio allocation size.

Service features
The Offline PMS Service will serve as a strong alternative to various Mutual funds and regular PMS offerings.

The idea of offline PMS is yet another innovative business model from HBJ Capital and is the first of its kind. The offline PMS service will serve as the best case option for the investors who are looking for professional help to build a wealth creating portfolio over the years. The service looks at eliminating all kinds of hefty fees being levied for similar services like the Application charges, Exit load, Entry load, Management / Administration fees, brokerage charges, Profit sharing and replace it with a simple one time annual subscription charge.

Service suitability

This service is suitable for investors, who can…. Allocate a minimum of 3 or 4 lacs towards equity investments through this service. Strictly adapt to the portfolio changes with the time delay not exceeding one day. Understand the multibagger potential of small cap stocks and the risk associated with them. Has the acceptance of high risk – high reward equation and has considerable risk tolerance. Looks at wealth creation over the years and not on quick gains and short term, instant profits.

Investment methodology
Almost 100% HBJ’s recommendations –
HBJ Capital has a strong presence in the area of Equity research solutions across various segments like the Small caps, Mid caps and the Micro caps. It has dedicated business verticals and a research team assigned to each of the categories. These business verticals have been operational for more than a year and have been providing research oriented services to their respective customers. The TMP service will make use of the existing advantages and leverage the strength of these business verticals. Hence, the portfolio of TMP service will mostly contain the recommendations of HBJ Capital only..

Growth opportunities –

Since the portfolio would mostly make use of HBJ’s recommendations, the scope for future growth in business for the companies are huge. HBJ Capital’s recommendations are well researched, fundamentally proven and in most cases, they are emerging opportunities. Hence, the portfolio would mostly contain companies that are from an emerging sector or from an existing sector that is poised for a big change. The thrust will also be placed on companies that are innovative and do things in a different manner.

Investment methodology (Contd.)
Focus on long term –
There is substantive empirical evidence to suggest that equities provide the maximum risk adjusted returns over the long term. In an attempt to take full advantage of this phenomenon, investments would be made with a long term perspective.

View stocks as businesses –

The approach to valuing a company is similar to making an investment in a business. Therefore, there is a need to have a comprehensive understanding of how the business operates. The key issues to focus on are growth opportunities, sustainable competitive advantage, industry structure and margins and quality of the management.

Market factors –

The investment portfolio would be regularly monitored to understand the impact of changes in business and economic trend as well as investor sentiment. While short-term market volatility would affect valuations of the portfolio, this is not expected to influence the decision to own fundamentally strong companies.

Portfolio allocation
Following are the limitations on portfolio allocation….
The maximum allocation to “Non- HBJ Capital recommendations” is at 20% of the portfolio. The maximum allocation to the “10in3” stocks is at 50% of the portfolio. The maximum allocation to the “Street Smart” stocks is at 60% of the portfolio. The maximum allocation to the “Micro Cap” stocks is at 25% of the portfolio. The “cash levels” of the portfolio cannot be more than 70% of The the portfolio. In exceptional conditions, the portfolio manager is at liberty to make changes to this clause. The portfolio manager has the liberty to invest in “Gold ETF”. He can also prefer to put his idle cash into Gold ETF. Note: Based on the market condition & in order to maximize the return, portfolio manager is free to make changes to the above clauses anytime with proper communication to all the members.

Key people
Following are the key people, who will run the TMP services, along with their respective Junior Analyst teams. Arun Gopalan – Lead Associate, TMP Arun has around 8+ years of experience in equity research & investments. He has been associated with HBJ Capital for more than a year and he has been successfully leading the flagship business vertical of HBJ Capital. Prior to Joining HBJ Capital, Arun was working as a business consultant with Toys “R” us, New Jersey. Arun has a management degree from Indian Institute of Management – Calcutta and a Bachelors degree in Technology from MIT, Anna Univ. He is a dual degree holder from the Anna University, graduated with a B.Tech in Mechanical Engineering and Information Technology. Sandeep Jain – Prime Contact, Business Management He did his MBA from IIMA. He has 6+ years of total experience & brief stint at Morgan Stanley & Goldman Sachs. He has been associated with HBJ Capital for more than 3 years & currently handles all customer care related issues. He is also the prime contact & deal maker for HBJ Capital.

Key people (Contd.)
Ekansh Mittal – Lead Associate, MPS Unit
B.Tech degree with 4+ years of experience in discovering multibagger stocks, he is one of the youngest associate with immense energy to work round the clock.

Jitendra Kumar – Lead Associate, SLT Unit

B.Tech degree with 9+ years of experience in technical analysis. He has expertise in predicting the market trend and spotting the right opportunity to enter & exit the market. His trading calls are most popular among HNI & NRI clients.

Communication on portfolio updates

Portfolio change (addition or removal of stocks partly or fully) if any are likely to be done after market hour on any particular day, in such case the changes will be communicated to all the members prior to market opening next day. Portfolio will be shared with all the members at least twice a month, tentative dates would be 15th & 30th of every month, but exact dates depends on portfolio reshuffle day. All the members are expected to replicate this portfolio as soon as possible with the changes done, either addition of a stock or profit booking etc.

Disclaimer
This document is not for public distribution and has been furnished to you solely for your information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. This material is for the personal information of the authorized recipient only. The recommendation made herein does not constitute an offer to sell or solicitation to buy any of the securities mentioned. No representation can be made that recommendation contained herein will be profitable or that they will not result in loss. Information obtained is deemed to be reliable but do not guarantee its accuracy and completeness. Readers using the information contained herein are solely responsible for their action. HBJ Capital, or its representative will not be liable for the recipient’s investment decision based on this report. HBJ Capital, officers, directors, employees or its affiliates may or may not hold positions in the companies /stocks mentioned herein.

Sign up to vote on this title
UsefulNot useful