Deepak's portfolio requesting feed back


(bully) #21

Started adding maruti and TVS srichakra. Looking to get in to Heritage foods. Diversifying.


(bully) #22

results of premco global and skipper dint pan out as i thought . Though keen to know what caused this quarter’s underperformance, im tad disappointed since had highly anticipated for better results. looks like i will sit tight to see off this bearish phase and see what happens


(bully) #23

Skipper promoters continuously buying and already they have 71% holding, some good news might be on the way . Dint want to munch anymore . Started buying when the price was 230. Now my average buy price is 146.


(bully) #24

Cobrapost on DHFL. If the result dint give me a shocker the subsequent events tests my faith in investing. With so much time and effort its simply not worth it. This is my second stint and it ended up bitter as well.


(Amit Jain) #25

Investing is a tough arena, and the challenge is multi-fold when investing in mid/small caps. It is certainly not for the uninitiated. Furthermore, these are tough times as market valuations are perched right at the top.

In these times, I think it is the job of the very few handful of the investors who can get the businesses right. Ones who have and are within their circle of competence.

For the rest of us, in the markets our capital currently stands to be decimated. But, there will be times when the headwinds will be few, and the market will forgive our mistakes, at least not brutally punish them.


(bully) #26

Thanks for taking you time to put down your thoughts. It just that the frauds committed/ shady deals of company of stature of DHFL was least expected.


(Hitesh Patel) #27

If you dont have the skill or knowledge to differentiate the poor quality companies in any sector the ideal thing to do is go with the most respected and admired one in the sector. Even if it means paying top dollars for it. There atleast you have the consolation of return of capital albeit at a later date.

The lure of buying cheap companies that have corrected a lot and hoping they will regain the lost glory is a difficult route to take. Some fallen angels rise from the ashes but the base rate of success is not good.

Ideally whenever a stock falls precipitously in a short span of time its coined as a falling knife and its better to stay aside rather than apply fancy valuation models to justify its cheapness.

Even if your thesis is right the fall will shake you out at precisely the wrong moment.

Best thing is to go with a portfolio of stocks with sector leaders with long term growth prospects.


(Changu Mangu) #28

Dear @bully

I am going to bully you a bit :slightly_smiling_face:. I genuinely hope you don’t mind. I have my reasons and I will detail them at the end of the post. I went through all your comments above before writing in to you.

Sir, you have said you cannot crunch numbers in fine detail and have no domain expertise in BFSI and you are putting a large chunk of your portfolio in financial businesses that require the highest level of number crunching? I saw that you have a “Financial math and Business economics certification from actuaries institute”. But sir, banking stocks are not even for most reasonably experienced investors. One of the earliest responders also tried to tell you that you have a heavy weightage to financials.

Then one more stock KRBL you have bought on a valuation of “I bought cheaper that Pabrai”. Why not stick to your circle of competence? Then in another stock DEEP you have figured out that all negatives are priced in. I mean if there are so many negatives, they are not getting priced in, you need to have gotten out of a stock with so many negatives. Period. Why not buy a positive developments stock, and not a negatives priced in stock.

And if at all, because you do have a financial education, then…

not Yes or Capital but HDFC Bank would make it to the list.

Then…

So your love for “financials” continues even after recognizing the risk in highly leveraged companies. And you rightly curse premco and then buy more? Because maybe you are trying to average a loser to if it bounces you can sell and consider a notional break even? The fastest way to lose money is to buy more to average. One can buy lower on conviction (may or may not work out), but the minute you buy to average, that is a red red flag.

But if results are not panning out why are you calling it a bearish phase. Ruthlessly get out if you find yourself in a hole, not to dig it deeper.

You are averaging again to try to get out of a loss, promoter buying is not a fundamental reason to invest.

And this below is why I read everything you wrote and I wanted to write to you…

As the wonderful Mr RJ has said; Markets are like women, always commanding, always mysterious, always volatile, always exciting.

So I think you should not lose hope and this is not a stint. It is a lifelong journey of learning. If you will treat the woman like a stint, a one night stand, she will not respect you. So, you have to spend time to learn what this woman wants, what she likes, what she dislikes.

I mean maybe you are getting disappointed and might quit again. So I wanted to write to you, don’t quit. Please accept market is right and will only value growth, ROE, ROCE, FCF, Quality Management, Quality Business etc.

I wanted to say this to you because this can be the most wonderful journey, if you continue ahead.

I am sure even the best investors on VP have had their setbacks, but they might have set aside their pain and their ego, and figured out how to get this mysterious woman to like them.

You from your words sound nothing like a bully, I have just bullied you actually, but only to be candid so I could point out some reasons which I think. Some in the world may just wanting to be politically correct so don’t say directly, but that does not help much, does it. So I am saying it quite frankly, but just with the hope that you stay back in the game to fight.

Because if you quit, the game is over, if you persist, you may end up charming the woman. In this world we don’t need extra energy when things are going our way, but we need to muster up the energy and not feel drained when we need to claw our way ahead.

I am myself a novice and am learning with the help of many at VP. Please continue to forge ahead and learn from the many friendly members. I am currently doing my 3rd Year VP. I hope to graduate this year and then start my Masters in VP. Then I will do a PhD in VP.

I really just wanted to help I am really sorry if I inadvertantly hurt you.


(Bharat) #29

@valuestudent Wonderful piece of advice

Realizing the mistakes and correcting it is very much needed. It is always better to keep our mind open to lot of information and not to make any fixed opinion for anything. I have seen people running behind so called Big names in market while i believe there are some great value investors present in our forum from whom we can learn a lot and they are much better than those big names.
There are plenty of great threads here from where one can learn and understand a lot on how to study a business , what are the pros and cons of the business , all the past and present of most of the businesses etc.
There is no substitute than reading a lot. It builds our own strategy and convictions for our stocks. Mistakes will surely happen but it will again be a new learning. It is a never ending process. But if one does it properly , chances of making any big mistakes are limited.
Once found a mistake , many people fear from booking losses and wait for the prices to come to their cost price which happens very rarely or comes even few years later at the opportunity cost. I believe booking losses is tough but that is the most sensible thing rather than waiting for prices to recover.

I have only 10 Months of investing experience and glad that i found this forum just after 2 months of my start. Very grateful to this community. Above were just my immature views. I could not resist myself from writing that.

Regards


(bully) #30

Wow what a reply. But allow me to explain my thought process.

Lately I tried to make sense of the story(the business its in / growth prospects), valuation( P/E,P/B,ROE,Leverage) and see if the numbers aren’t too bad (P/L statement ) and dive right in.

Premco I started averaging after they turned around in one quarter and the extremely positive management commentary but it dint follow through in the next quarter.

In Skipper case, management holding kept increasing this quarter(72%) and only the last
2 quarters dint pan out as expected. If you see the business they are still in top 10 manufacturers of power distribution systems and diversified with pvc. They keep winning orders.

Now let me address the chink in my armory financials. Before i could clearly understand IL&FS default and the liquidity crunch it caused. All i could see was housing finance companies dhfl and repco available at relatively cheap valuations. In case of dhfl , the concern on asset liablity mismatch im ok with . They have indeed started addressing with selling all non core business and might in future go for longer term liability (Longer duration CP/loans etc…)the disbursement for this quarter coming down by 90% is also fine but what im not ok is the shady dealings with shell companies . For an organisation thats 3 decade in business, huge visibility, having very high penetration (my wife’s homeplace,a relatively smaller town has a dhfl branch) ,marquee investors( so many mf’s , RJ) this is least expected .

Its still ok for in worst case scenario i get to lose few thousands but they lose everything.

Despite all this what you have mentioned is right. I liked the analogy. Thanks for going through the whole post and giving me a piece of your brain. Will surely try to put in practice shortly

My updated portfolio

Instrument Avg. cost Percent
IDFCFIRSTB 41 19.8%
KRBL 444 9.1%
MARUTI 6748 8.8%
YESBANK 258 8.4%
PREMCO 287 8.3%
KIRIINDUS 491 7.1%
REPCOHOME 397 5.0%
SKIPPER 136 5.0%
RAIN 179 4.6%
CANFINHOME 400 3.9%
DEEPIND 184 3.7%
UJJIVAN 276 3.6%
MANAPPURAM 72 3.5%
TVSSRICHAK 2294 3.0%
TIGERLOGS 175 2.6%
DHFL 288 2.2%
EDELWEISS 152 1.5%

sitting on 20% cash in case election results give any buying opportunities.

For India to become 5 trillion GDP financials have to grow. But eventually i will cut down


(RadheyShyam Aggarwal) #31

Wow! You seem to be a great soul ,spending so much time to hand-hold a stranger is really extra-ordinary. Was reading Greed and Fear before reading your message. Both resonate well.


(Investor_No_1) #32

Thanks bully for sharing your views so openly. I was just thinking when a small crisis like ILFS can shake beliefs and portfolios…what would a 2009 like event do…unfortunately I started investing from 2010-11 onwards…wish I had shed some blood in 2008-09 and learnt the hard way…because learning now after years of stable time will be even harder…


(bully) #33

May be i over reacted . im not discussing business cycles here. 2008-09 is a crisis time i agree but you atleast know the business was honest. not a satyam like situation. may be i have a flair for choosing such companies

deep industries- got my fancy when some oil drilling company was listing- involved in graft charges
krbl- agusta chopper scam
yes bank- more accusation
now dhfl- owner’s siphoning off money through shell companies


(Investor_No_1) #34

Yes that perspective i understand more clearly now. When i started investing I had my share of koutons…they week i bought and it started falling…all the way till 0 …it was not a scam but promoter pledging etc etc. Why I chose koutons over Trent was perceived value with whatever judgment capability I had then them and also some analyst reports influence. I am happy I had a koutons moment and its it’s better to have bitter experience in stock markets sooner than later…from that day I decided to never buy a koutons type share how much value I see in it…
I think you already got the answer from @hitesh2710 sir that focus on leaders…and I would say growth and quality more than value and special events…if we do not have that skill to identify true value and get out at right time…above will also not guarantee success but yes failure rate will reduce…

And my biggest learning in 2018 is to focus on macros as well…my approach used to be very stock specific…but in 2018 I have seen how macros can destroy returns from an otherwise good company and reduce returns to an extent that makes you question even investing in quality…