An aggressive contrarian portfolio

It is rare to see a contrarian portfolio here on VP. Most people play it safe by building a portfolio of yesterday’s winners hoping that future is going to be an encore of the past.

I also liked the fact that you have stated your expectations for next 2-5 years and these expectations also appear to be rational. IMO real risk in investing comes from having wrong expectations and you have already taken care of that.

There is one risk I can point out in your portfolio. IBHFL, DHFL and Repco are likely to be correlated with each other for the foreseeable future. They will either go up together or go down together. By having 3 positions, you have reduced unsystematic risks like cooked books (as all 3 are unlikely to have cooked books) but there is no protection against systematic risk of margin squeeze or real estate slowdown. Your expectations indicate that you don’t expect these risks to materialize in near future. You might as well reallocate Repco position between the other two.

Tata Motors is also another stock I considered but gave it a pass as I don’t see any immediate trigger for rerating. Domestic sales won’t move the needle for TM as Jaguar makes most of the sales. Global economy is likely to go into a slow lane. It has a huge debt load that will weigh the price down. Just my 2 cents.

There is a good overlap between this portfolio and the one listed here although my portfolio is not aggressive or as contrarian as yours.

Overall, good portfolio and more importantly a good approach to building a portfolio based on expectations about future than a reflections of the past.

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