dear fellow forum members
to be honest i have been not sticking to my margin of safety philosophy and i am surely tempted by the raging bull market underway. though i have decided that i will not be touching my core portfolio holdings like bajaj finance , piramal enterprises, shilpa and cera sanitaryware. i have been lately involved in momentum chasing as well. only screen i use here is a visible turnaround in business and the sector as a whole performing good.
i have exited pokarna at little loss, poddar at a profit of arnd 15% and ruchira at nil loss/profit.
i am only using 20% of my capital for these momentum/fancy sectors.
latest entry being :1. thirumalai chemical @1080
2. mahrashtra scooters @ 2800
3. arihant capital markets @ 155
maharashtra scooters is basically holding company which has a investments worth 9000 crores in bajaj group stocks mainly bajaj finance, bajaj finserv and bajaj auto. this is a pure play on future appreciation of fundamentally sound bajaj twins ( bajaj finance and bajaj finserv)
2. arihant is play in the ongoing boom in financial services sector.
dear fellow forum members
I am generally guilty of doing this as well. It is very hard to help yourself in such a raging bull. It is a good idea to allocate only a part of fund to trade the momentum. 20% is what I do myself too. I have a list of to have stocks. When one of these falls 15 to 20% for apparently no fundamental reason, I sell a current holding and buy the stock for momentum trading. I try to limit my portfolio to 10 stocks. So when the stock increased by 20% I sell them again.
What I have found out is that it works only half the time especially when you have high conviction in a stock you are buying. For example, I have made profit in stocks like Aurobindo, Glenmark, DHFL and Indiabulls Housing. While I have also made losses in Reliance housing, Ujjivan and Satin Credit Care. On a net level I have made only a small profit on momentum trading. But it still feels good to have second guessed the market and have won. Maybe when we keep doing this and get good at this, our win ratio and hence the profits could improve which I cannot yet say so. Some senior boarders here could say whether it actually works. The downside is although limited in a bull market as wrong picks are not really punished much. Things could be different in a bear market.
So I would say strictly 20% and only during the bull phase would be a good idea for momentum trading.
Exited thirumalai today at a price of 2020. The stock ended the day at 2200. Found a better bet in meghmani organics in the chemical/agrochemical sector . Meghmani has done lot of debottlenecking , is coming out of a difficult year and now has sectoral tailwinds. The indian chemical industry is poised for a good run ahead for couple of years and meghmani , Aarti industries and vinati are few names which I think will continue doing well.
Added Arihant capital markets , similar business of.motilal and edelweiss have been firing on all cylinders.
latest updated portfolio
- piramal enterprises
- bajaj finance
- manappuram finance
- tata metaliks
- mahrashtra scooters
- shilpa medicare
- suven lifesciences
- meghmani organics
- tvs srichakra
- arihant capital
I have now moved into 20% cash and did this by selling lot of momentum stocks in the first week of January. And I m waiting for at least 7-10 % of dip which I think that there is a high probability of getting one as this being a year of 10 + elections and markets will just use an excuse to get rid of the excess froth.
I m planning to hold on to my core ideas like Bajaj finance , piramal , Cera and will add them on dips.
Recently exited arihant capital , prakash industries and a bit of Tata metaliks.
- piramal enterprises : 25 %
- bajaj finance : 25 %
- ttk prestige : 10 %
- century ply : 5%
- mirza int : 7%
- manappuram finance : 8 %
- prataap snacks : 6 %
rest i have deployed as cash in gold etf from levels of 2700 hdfc gold etf.
bajaj and piramal are core and the largest holdings and i am not sure where to switch to from these two.
manappuram has not been able to execute the business as expected and after a quarter i amy review my holding there.
i have decent conviction in ttk prestige and looking to invest in the same on corrections and market dips.
i am now mid way in arranging a war chest for the next major correction which i feel is round the corner. even if that doesnt come , i will wait patiently and only invest when there is panic or a big sell off in the markets. such investments have yielded good returns, offer excellent margin of safety and peaceful nights.
hdfc amc looks like a long term buy as i could make out from the thread on the forum. i will be buying the same when the amc business shows signs of being in downcycle or a major sell off as mentioned above.
another name which interests me godrej consumer products.
also i am highly optimistic on piramal and then bajaj finance, chances are the both will keep surprising both in terms of business quality and execution capability.
views and suggestions are invited.
sold part of my manappuram today and invested the same amount in hdfc amc. hdfc amc looks a decent bet as compared to manappuram and i would like to average it on further corrections. i haven’t committed extra capital for the same, only reshuffling thru the existing portfolio. additional capital only when there is a major correction time wise or price wise.
Markets kind of tanked today. I was watching the day from the start, with a opening of more than 120 plus on the nifty , it corrected to around 350 points due to some hfc default scare.
It also provided me an opportunity to reshuffle my portfolio. Sold all my manapurram fin and hdfc gold etc. Converted the entire money to
- Bajaj finance : todays buying price 2300
- Hdfc amc : 1340
- Piramal : 2750
Still no incremental capital invested.
There is a lot of huha about hfc and nbfc as a whole today. It is surprising to see that few weeks back bajaj finance was being lauded as the best in the field and their moat is getting impregnable. Their results also show the same. So todays situation appeared to me where in business like bajaj piramal and hdfc amc will come out stronger. They have fared worse times with great efficiency. More important is for one to have a plan, courage and convection on the investment rationale. And finally the ability to be patient and let things unfold over a period of time.
What is your take on Force Motors and Minda Industries purely from Business Moat and Management point of voew
the auto industry is not my cup of tea. hence i have little to offer when it comes to that. according to me it has many movable parts , intense competition and is capital intensive. such things keep me away from it.
Markets look like are in a corrective mode. For long term investors this is just a passing phase and opportunity to reshuffle and add to quality names. Since I have a bottom up approach when it comes to investing and also I am little optimistic when it comes to valuations. I end up buying in periods of fear and decent price corrections. I haven’t invested any incremental capital during the correction. Also I had around 15 percent of portfolio in gold which I have now converted into equity. As of now invested 90% . Recent additions include :
- Godrej consumer
- Pidilite industries
- Piramal and bajaj finance in parts during the corrections.
I am expecting 2019 to be a year of quality businesses and hence sticking to quality with a capital Q .
Feedback and inputs are welcome
You accept that the market is in corrective mode. How deep or how long will this correction last, nobody knows. But we both agree that quality stock will stand apart, they will be most resilient to correction. So this correction is quite helpful for long term investors, it helps distinguish false quality from the real ones, and so it will give us opportunity to shuffle out from our mistakes.
But if you are fully invested, then won’t you get trapped with your mistaken quality investments? Would it not be better to reduce the equity exposure so that shuffling happens with minimal loss?
Markets are in corrective mode for sure , but how much and till when will they correct , this no one knows and also can’t be predicted. My approach is bottom up as I said before and I think it’s fool hardy to look at index levels to choose long term investments. Since the extent of correction can’t be predicted , the only thing I can assess is a decent price entry along with good business fundamentals. I am willing to see temp losses on the portfolios which I have seen in 2013 , 2016 also. Just a passing phase according to me. Also I do have additional funds which I will deploy for sure at distress levels.
Good to see strong conviction in shares you hold. I believe u r holding these since long and already at good profits. Wanted to know you added fresh quantity even sitting at how much percentage profit? Thanks
Okay. You have considerable exposure to financial sector. Don’t you think time is ripe to rotate out of the sector, or do you still see strength in it?
Yeah even after the recent correction piramal is 2x from my purchase price and bajaj is 3x and little more. With my limited experience in the investing world I have learnt that lending is a business of managing risk. Also of you can find financials which are run by smart and visionary promoters , one can end up being part of a decent growth story where risk is also pretty calculated.
But I do have other stocks as well which make around 60 percent of portfolio .
- Ttk prestige
- Century ply
- Godrej consumer
- Hdfc AMC
- Mirza international
These two have how much percent each in yout portfolio? I also have decent exposure to both of them.
i have recently made some changes to my portfolio.
have exited mirza international at a loss of around percent and invested the same amount in yes bank. at the price of around 150 for yes bank i think the price offers huge margin of safety. once the new management takes over there will be less noise around the counter and slight change of perception/sentiment change will give decent returns. i like it when people get too cynical and pessimistic on a counter given that banks are the forefronts of lending, they have a excellent regulator keeping a eye on their operations. yes banks balance sheet is far better than the likes of axis and icici. patience and business performance are the name of the game now. i have ample of both ))
Looks like a good move…I must say.
Straight out of Warren Buffett’s book. ( refer : Warren buying stake huge stake in American Express at height of pessimism and bloodbath in 1963 )
I hope it works out well.
Disc: no holdings in Yes Bank.