I see you have added Indigo. You had earlier mentioned…waiting for promoter feud to resolve before increasing allocation.
Recently Bhatia group has filed cases in US/UK against Gangwal group. What are your thoughts on this.
Disc: invested in Indigo
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As Diageo is the promoter company, and due to unavailability of enough news the uncertainty was much bigger.
This is a rule of the portfolio, if the news is bad and you don’t understand the intensity of it, capital protection becomes much more important. If I misjudge it, I will always buy it again and pay a premium for the same.
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The main concern for the promoter fued was if there will be hampering in operations. Been to almost 20 different Indian airports in the last month and found that they couldn’t be doing much better. Flights almost full, turnaround time as scheduled.
Yes the promoter fued is a problem, even bigger when they file lawsuits against one another, but integrity isn’t the case here. It is very much internal, and Bhatia has the ultimate power afterall. Adding allocation here I am aware of the problems making it a much more thought out process.
Hi
How are your returns till date. Have you bought some stocks like godrej properties and vinati organics recently or long back
Thanks
I bought them long back. Portfolio is break even as of now.
Time to update the portfolio here.
I apologize for being inactive
Dixon Tech is a new addition and my largest position.
Tata Motors, Titan, Astrazeneca, IRCTC, and Inox are new additions.
Vinati Organics, Indigo, Syngene, and Minda are where I increased my allocation.
I exited Dabur, Deepak Nitrite, VIP Industries, IOLCP and Maruti.
I am now on 15% cash.
Regards
I would say the churn has been rather large and very active for the last 3 months.
Nonetheless here are the rationale for exits:
Dabur- The day it made a new 52 week high was the day I exited. Valuation mismatch from the FMCG pack was the only reason why I bought it. I exited when the goal was reached.
Deepak Nitrite- The fact that it is so far majorly Dasda price contribution to the bottom line was a little uncomfortable to me, especially knowing that China’s plants will restart by March 2020.
VIP- I visited a lot of dealers and did some channel checks, the dependency on China is a killer here. Bangladesh is made so industry friendly now but their capex there is still pretty much stranded. Nothing is aggressive about growth so far.
IOLCP- At first it felt like a Buffett moment. But the more I was looking into it, the more wrong I was about the moment. Management reducing debt at an accelerated pace is a very good thing. But it is only a good investment if there is growth in the future. Currently I believe management is more on correcting the past mistakes mode, rather than re-writing the future and hence the exit.
Maruti- It was also a 52 week high-low game. The day it reached low was a buy, the day it reached high was a sell.
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Rational for additions:
Dixon- Management has been taking prudent steps to increase revenue from existing customers as well as getting new ones. Contract manufacturing is a great way to play the smartphone business. Foxconn exiting is just a cherry on top.
IRCTC- applied during IPO as valuation wise was quoting very cheap. I guess the market thought so too. Monopoly, many new areas of business, and authority to increase prices.
Inox Leisure- Management has been aggressively opening up more screens. I have also created a thread on Inox and hence you can find my view more on it.
Titan- The age-old story.
AstraZeneca- It was in another portfolio of ours, was transferred to mine. Holding period has been 3 years now and I haven’t taken a decision yet to add/ hold or exit.
Regards
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Update:
I am 93% invested now. 7% still on cash.
I exited ITC. The reason being, every single person I talked to said ITC is cheap. But the market doesn’t pay for more cash flow. It pays when there is growth. This is the ultimate rule. But ITC hasn’t been doing that so I took an exit call on it.
I increased my allocation in Godrej Properties a few days back.
I have added Camlin Fine sciences as a tracking position.
Last time I added portfolio acc to value, but I’ve added this time acc to cost.
Regards
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Timely move to NALCO during the dividend quarter or are you playing the Aluminium/EV cycle ?
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Inox is an interesting add. I’ve added it to my tracking position. Thanks.
I really love Titan as a stock but can’t pull the trigger due to valuation concerns. How do you feel about astronomically high valuations?
One more question would be what kind of timeline are you looking to stay invested in capital intensive businesses(like Indigo or Tata Motors) since the visibility of cash being returned to shareholders looks bleak.
When it comes to things being astronomical in value, I compare it with its own history first. Has it always been this way, or how long has it been since a strategy made it this way. Eg there are many HDFC bank notes even from 2002 that say that its valuations are expensive. What an incredible regret that would be to an investor.
Of course some valuations are priced to perfection, but sometimes the execution has also been almost poetic. For me, I see Titan eating away market share of all non-branded Jewellery makers. After visiting many Tanishq stores and local jewellery showrooms, the later are much more larger than Tanishq. I believe Tanishq uses its store space very well. That’s all it takes for me to understand how it can keep good margins.
For Capital Intensive business such as Indigo and Tata Motors, they are currently facing many challenges. So far I seem to understand most of them and hence am confident that they will be able to resolve many to come. I like the steps and directions which both companies are taking.
My time horizon is not too long unfortunately. The longest I can keep is 3 years.
I hope this helps
Regards
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Any change in NALCO holding/views post the recent very poor results?
Hey @Akshada_Deo,
Hope you and your family are keeping safe.
How’s your portfolio doing?
Just curious on how you are nudging your portfolio during current times.
Thanks!
Hey Rahul, I am well. I hope you are as well.
I was able to sell out of all of my positions back in February before the carnage. I never got back in the market just due to amount of uncertainties that is there is the market.
I do have a dominant dollar position.
I hope your family and portfolio is well. I haven’t been active on Valuepickr so haven’t updated the thread for a while.
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Hi akshada
Can I know the reason/working that went for your timely exit in Feb
I am trying to study the mental makeup before ones exit . Exiting my positions,leave aside portfolio has been a shortcoming for me throughout my career
Hi Deepen
It was a culmination of factors. The data that showed me nervousness in the market didn’t come from equity market but Bond and currency markets for me. Yields breaking all time low along with strength in dollar. I was able to sense it would be a liquidity problem soon enough. Along with this when Fed said all was fine but then in 3 weeks proceeded to do a surprise rate cut confirmed by thought process. Another problem that I saw was when they initiated Lockdown in Lombardy, I went head and thought that this is how other countries would react as well. It sadly became a viral option in govts.
I however had no clue as to how bad the market could potentially react. When they would react like this etc. VIX started shooting up as well.
I offloaded all my positions in a week.
I hope this helps.
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Hi
Do you still hold Dixon, Minda ?
Whats your view on their performance in light of covid ?
Thanks
Hi Akshada
Have you started rebuilding portfolio or waiting on sidelines. If yes could you please share the details and rationale.
Stocks in general have run up a lot. What are your current thoughts, watch list.
Thanks
Good portfolio. And u stick to quality stocks,and always ur portfolio had stocks below 15 , which I always preferred but failed to do it yet 
.
Btw IT and Financials Stocks never been part of your portfolio?