How to choose best stocks? Should you buy penny shares? The STF Formula Explained | EXCLUSIVE

How to choose best stocks for multibagger returns: Pradip Halder (SEBI Registration number INH00006126), Founder and CEO of PHD CAPITAL, in a exclusive conversation with Business Today Television in the Daily Calls show, advised stock market investors on how to choose best stocks. He also suggested 'STF' formula, 'Dhanda-Banda' rule and 'Knowledge Before Lakshmi' concept to pick best stocks.

The Dhandha-Banda Rule by Stock Market Expert Pradip Halder

"If you are looking for value, you must view the stock market as a business. If you are investing in any business, you should first understand the business—because when both the "Dhanda" (business) and the "Banda"  (person/management) are right, only then will it make sense to you."

"You are investing in stocks priced at 80 paise or 1 rupee. In fact, there are many stocks below 15-20 rupees where people think if they invest, they will eventually make money if it performs even slightly like Suzlon. I still see people investing in Vodafone Idea; I still see people chasing R Power; I still see people running after Yes Bank. Somewhere, these stocks have no current future."

How to choose best stocks for long term?

According to Stock Market Expert Pradip Halder, if you are investing in any stock, you should at least check:

Revenue: Has it been growing at an average of 12% to 15% for the last 5 years?

PAT (Profit After Tax): Is it fundamentally growing at an average of 12% to 15%?

If it is, then definitely invest. Sometimes, like when I gave calls for Style Bazaar or Nippon India Life, there are fundamentals behind them. You can decide price action through Technical Analysis, but you will understand the actual value of the company through Fundamental Analysis.

The STF Philosophy EXPLAINED by Stock Market Expert Pradip Halder

Halder's personal philosophy is STF:

S for Sentimental (Psychology)

T for Technical

F for Fundamental

"If you look at things with a bit of sentiment and psychology, you will understand. If you know a little technical analysis, it can be better for you. For the last two weeks, I have been saying: come where there is strength. Where there is no strength—including the stocks we discussed in the show today—I have said "No" to 80% of them. And "No" means "No," I can’t do anything about that," Pradip Halder said.

"I use this STF philosophy for the personal model portfolios I manage. If Techno-Funda is combined with Psychology, the chances of making money in the market can increase significantly."

Should You Buy Penny Stocks? Pradip Halder answers

"Stocks trading at 1, 2, or 5 rupees, you don't know who the promoter is and there are multiple compliance failures. Think about it: if your age is 45-50 years (which is the case for the majority of our viewers), don't just think for yourself. Think about what you will leave behind for the next generation—your son or daughter—when they are 15-20 years old.

Advice on fund allocation:

If you have 100% funds, 60-70% should be in safe assets.

Use 30% for swing trades.

 

Asset Category	Allocation	Purpose
Safe Assets	60% – 70%	Wealth preservation and stability
Swing Trades	30%	Active growth and market momentum
Penny Stocks	0%	Avoided due to compliance and fundamental risks

 

'Knowledge Before Lakshmi Rule' for choosing stocks

"However, the timing and which advisor you follow is very important. As I said last week, swing trading and breakout trading are not for everyone. You need to understand that. There is nothing before learning. I always say that before calling Goddess Lakshmi (Wealth), you must call Goddess Saraswati (Knowledge). If you don't do that, it will be difficult for you," Pradip Halder said. "Learning is a very important thing. Do that, and work in the market by mixing Techno-Funda and Psychology."

 

WATCH FULL CONVERSATION here:-