The Naked Trader

This smallcase is created on the basis of investment criteria set out by Robbie Burns, a UK-based trader, in his book ‘The Naked Trader: How Anyone Can Make Money Trading Shares’. These criteria have been adapted to Indian stock market conditions to build this smallcase.

• First, the financial vigour of stocks is checked and only those stocks whose revenue, earnings and dividend payouts have increased in the most recent financial year are selected
• Next, companies whose debt burdens are low relative to their operating profits are selected. Low-debt companies pay low interest, which automatically boosts profitability. Such companies are relatively better off even when the business environment is facing a downturn
• In addition to this, the model also checks for ratios like PE, so that reasonably-priced stocks are selected