Arpit Dream Portfolio 2019

Q&A: Questions & Answers Portfolio Q&A
1

Hello All,

I am planning to create a Portfolio in 2019 for next 5 years with 15-20 stocks and minimum 5% allocation to each business. I will diversify it across Large, Mid and Small cap. Also I want to diversify it among different sectors to minimize the risk. Max allocation to single stock will be 10% and to a particular sector will be 20%.

Criteria for selection of stocks :

  1. Management Quality is first
  2. Financials has to be good and improving
  3. Valuation will depend on the business and growth opportunities. So it will be a mix of under/fair/over valued stocks in Portfolio

Planning to buy on dips and not in one Go.

Below is my current Watchlist from whom I want to create my Portfolio of max 20 stocks.
My Watchlist filtered Sectorwise :

  1. Technology :
  • TCS/LTI/Sonata
  • LTTS/Tata Elxsi
  1. Pharma
  • Aurobindo/Natco/Cadilla
  • Abbott India/Merck/Caplin Point
  • Biocon/Syngene/Suven
  1. Banks/Financials/Insurance
  • Yes Bank/Rbl Bank/DCB Bank
  • Bajaj Finance/L&T Finance/Gruh Finance/PEL
  • HDFC AMC/Edelweiss
  • HDFC Life
  1. Auto/Ancillary/Tyres
  • Maruti/Bajaj Auto/Ashok Leyland
  • Minda Industries/Sundaram Fastener/Endurance Tech
  • Balkrishna Ind
  1. FMCG/Retail
  • Godrej CP/ITC
  • Dmart/Zydus Wellness/Jubilant Foodworks
  • Titan/VIP/Relaxo
  1. Cables/Electric
  • Havells
  • Sterlite Tech
  1. Chemicals/Machinery
  • Atul Ltd/Aarti Ind/Vinati Organics
  • GNFC/Excel Ind/Nocil
  • GMM Pfaulder/Salasar Techno
  1. Plastic
  • Astral Poly/Supreme Ind

Awaiting inputs from fellow Investors and ValuePickers to provide their views on this strategy and Top 20 from the watchlist above. From the above I do hold few stocks currently. But am ready to modify the Portfolio accordingly. Looking forward to have a great discussion with you all in my Investment Journey.

Happy New Year in Advance!!!

1 Like
3

Thanks for the response, however I didn’t understand clearly. You want me to put up rationale for Individual stock selection basis or something else ?

5

Good to see your watchlist. I have few from above list. Personally none from Pharma and none from typical IT company stocks because of too much external factors involved like USFDA and US policy including Dollar up downs.

Would like to know what you are holding right now.

1 Like
6

Hi,
Continuing to my first post below are the stocks am holding right now and a single point Rational for buying these business :

  1. LTI : Holding From IPO : Mangement and future growth in IT
  2. LTTS : Market Leader and positive on IoT, Autonomous Vehicles etc
  3. Bajaj Finance : Market Leader and Retail Finance is less affected due to small size loan
  4. L&T Finance : Banking on management capabilities and NBFC sector growth
  5. Natco Pharma : Good Financials, Management, and in complex products. Looks undervalued
  6. Suven Lifescience : Betting on CRAMS business and Global Presence.
  7. Rbl Bank : Recently listed is growing rapidly. Potential to be next HDFC.
  8. Yes Bank : Entered recently on downfall, Excellent financials and growth seen in Past.
  9. PEL : Bet on Ajay Piramal who has created wealth over last few years for its shareholders
  10. Minda Ind : Sector Leader in Ancillary and an Established brand and great client List
  11. Balkrishna Ind : Best In Tyres off the highway, Exports,good growth seen in past.
  12. Sterlite Tech : Leader and with 5G coming in Optical fibre demand to remain high.
  13. HDFC Life Ins : Management says it all and Insurance penetration is less but likely to increase in future. HDFC remains the choice after LIC

Requesting feedback from @hitesh2710 @desaidhwanil @basumallick and other members of the VP board .

1 Like
7

@arpitjain512

The list includes good companies and may of them have dominant place in their sector. Personally I would be a bit wary in names like Yes Bank. (though its a personal opinion only).

Maybe you could add a couple of good small cap names to the list which could provide the extra delta to the portfolio whenever the small-midcap space starts getting market favour back. As of now they suffer from market apathy and these are the best times to buy out of favour good companies.

2 Likes
8

Superb picks… we have a lot of stocks in common! What’s your take on balkrishna fir the short term?

10

Just a thought, may want to have a look at eclerx and page(though) expensive.

11

Hello Hiesh Ji,

Thanks for your views.
Planning to enter in MNC companies ie GMM Pfaudler and Orient Refractories.
Let me know your views on these, they look Longetm compounding machines

12

Thanks I will check these.

13

Hello Everyone,

Last 3-4 months I have tried to take positions in the stocks mentioned above in my watchlist and Below is what I have created a diversified portfolio out of them. Still I am holding good amount of cash to deploy as and when I see dips. Overall below is the list of stocks I have finalized to be in my Core PF and non Core PF with the Percent holding I want to achieve in coming days :

Core Portfolio :

Information Technology
1.L&T Infotech : 7%
2. L&T Technology : 8%

Banks/NBFC
3. BAJAJ FINANCE : 7%
4. MUTHOOT CAPITAL : 5%
5. RBL BANK : 5%

Pharmaceuticals
6. NATCO PHARMA : 5%
7. MERCK LTD : 5%

Consumer Space
8. HAVELLS : 7%
9. SUPREME INDUSTRIES : 5%
10. CCL PRODUCTS LTD : 5%
11. RELAXO : 5%
12. BRITANNIA : 5%
13. VIP INDUSTRIES : 7%
14. GODREJ CP : 5%

Chemicals/Machinery
15. ORIENT REFRACTORIES : 5%
16. GMM PFAUDLER : 7%
17. VINATI ORGANICS : 7%

Non Core Portfolio

1.MINDA INDUSTRIES
2. BALKRISHNA INDUSTRIES
3. HDFC Life Insurance
4. Yes Bank

VPickers Let me know your views about my above Portfolio selection and how does it look for a 5 year duration holding with Periodic Reviews.

3 Likes
14

I have read this discussion off late. But I would like to add my view when you build your portfolio for more than 3-5 years. All Portfolio stocks move in their own orbit of ups and downs. You must look at reviewing them always from Risk Management point of view also. Sometimes you are unable to book gains at good times and then your full one cycle is wasted in waiting for the up move again after months of waiting. I am not a valuation expert but I manage my high concentration scripts with my unique excel algorithms. Queries Welcome for interested persons. Can give examples by stating recent downfall in market and exits signals as per my Risk Management Algo Excel. Thanks for sharing your views. It was a great learning.

15

Going through the picks in detail, what I feel is too much of diversification,eats away the returns.
Had I been in your place, I would have gone with the Sector Leader & increased my allocation there, once I am thoroughly done with doing my Homework.

Capital & Time is finite & one should be equally considerate towards this, the way they are towards choosing a pick.

I refrain myself from naming any specific business on any Social Platform, but definitely Consumption is going to continue as a theme & Consumer Financing is going to go as big, as times of ancestors of Cash in Hand are gone & we live in times of BUY NOW & PAY LATER.

Managements which have a clear vision & execution capabilities, focus & hungry for growth but controlled & not aggressive & finally growth should be sustainable.

Filter your businesses on these parameters & you will definitely find but obvious results.

Regards
Bharat