Hi, this is Varadharajan from Chennai. I am not from a finance or accounting background but work in Operations in BFSI vertical.
I am used to investing on hear say or by reading research recommendations or blogs, without completely understanding the business or validating the rationale or valuation.
I consider joining VP Forum as the best thing to have happened to me in 2016 and this happened very recently. I hope it's never too late, and I am a beginner and learning the ABCD of investing now. I have recently got my first Reader Badge. I can say with true conviction that this forum has been a complete eye opener to me, and I say this after just reading the threads on Investing Basics, and parts of Art of Valuation & Capital Allocation framework links.
This has created an interest in me to learn about equity investing and my investment journey is just about to begin. I intend to read the suggested books of Peter Lynch, PAT Dorsey & also Intelligent Investor by Graham. Apart from reading the material, I also wish to try out the DIY topics suggested in PAT Dorsey book starting 2017.
I would like to thank Donald, Hitesh, The Confused Consultant and the entire VP community for your comments and guidance, sharing your practical experience and learnings/mistakes, hypothesis behind your investments, making VP a great learning platform and for the thought provoking questions in the various threads.
When I joined VP group few weeks back, and I had shared my PF as I felt that I had too diversified a portfolio and was unable to keep track of the companies. I had received very good inputs and recommendations on the approach and I am thankful to the community for the same. I have started pruning this list and shall continue this as an ongoing exercise as I keep learning about investing.
I was looking on my portfolio and reflecting upon how I wanted to invest in future, I was faced with the following thought processes:
1) Sell my current stock holdings and sit on cash, learn about new opportunities emerging in the market, completely understand the business and the fundamentals, and if I have a conviction on investing, get into the company.
2) Research on maybe 1 company every month from my existing portfolio itself, understand the business model completely and if at the end of the month, I have the conviction that it's good to hold/increase exposure, make a decision and proceed. Else, get out of it and look for opportunities elsewhere.
3) Use the forthcoming 2017 to completely understand value investing framework, identifying opportunities, understanding business fundamentals, valuation mechanism, capital allocation, identify red flags and value traps etc. Basically, i want to develop my knowledge levels from an absolute zero to atleast 40% (this number sticks with me as it's generally considered a pass mark in exams
To start off, I have tried to put down whatever I am aware of the companies I hold and I asked myself 2 questions:
a) Can the stock double in the next 3-4 years?
b) Do I have the conviction if my question to above is YES.
However, after I thought about my conviction and knowledge levels, I am 200% sure that this borrowed conviction will be proven wrong. I am still undecided on how should I proceed with my existing portfolio. I shall maybe sleep over it and find an answer.
Stocks Portfolio Review.xlsx (16.2 KB)
Any comments and suggestions from VP Forum members are most welcome. Wish you all a very happy, prosperous and knowledgeable New Year 2017.