Govind's portfolio


(Govindarajan) #21
My latest portfolio
Stock Allocation
Infosys 16.2
CanFin Homes 12.25
NHPC 9.06
VST Tillers 8.4
ITC 8.14
City Union Bank 7.42
Balmer Lawrie 6.45
Oil India 5.92
BHEL 4.9
FDC 4.39
Coromandel Intl 3.32
GSPL 2.85
Bajaj Holdings 1.84
Torrent Pharma 1.62
Graphite India 1.47
Pidilite 1.36
Colgate 0.85
Travel House 0.78
KMCH 0.77
GAIL 0.69
Suprajit 0.63
SJVN 0.37
Ador Fontech 0.34
Relative Performance (since 13-Dec-2012)
My PF Top Fund CNX 500 TRI-Nifty
14.498 1.511 0.448 5.382

(surya kanth) #22
[quote="govindarajanv, post:21, topic:544300607"] 16.2 CanFin Homes | 9.06 VST Tillers | 8.14 City Union Bank | 7.42 Balmer Lawrie | 6.45 Oil India | 4.39 Coromandel Intl | 2.85 Bajaj Holdings | 1.84 Torrent Pharma | 1.62 Graphite India | 0.85 Travel House | 0.37 Ador Fontech [/quote]

Hi Govind,

I would like to put my comments.

Diversification is very misunderstood. One thing about Diversification is that every stock we add should be as good as the first one to generate consistent returns.

Pros of owning more than 10 stocks:

1. Taking a loss is very easy that's it.

Cons:

1. It is not easy to find conviction in 20 stocks.

2. It creates a false impression that the portfolio beats market.

3. It does not allow you to participate in booms.

4. Without a proper stock picking strategy, actually, It doesn't make much difference if you own 5 stocks or 20 stocks. But people believe that just by owning more stocks, somehow the risk is reduced.

And one more thing: I have some problem with these 20% growth stories. The problem is: With 20% earnings growth you have to be very good at picking price. Because generally in the mature stocks there is no PE contarction or PE re-rating to lage extent. but +5 or -5% is always possible. SO if you got in wrong price you may end up with 10-15% returns only.

If you would like to explore the strategy i follow please check my portfolio at

http://www.valuepickr.com/forum/portfolio-q-a/878769250 Link: ../../878769250

I would like to explain the problem above here:

Take HDFC bank Vs Page Industries.

HDFC Bank is a 25% growth story and Page is a 35% growth story.

There is not much PE re-rating left at both companies.

But with Page you will end up higher returns than HDFC bank over 10 years even if the PE ratio of page falls by 30%. But with HDFC bank The returns vary from 15-25% only.

That is why it is important to hold high growth stories.

My latest portfolio
Relative Performance (since 13-Dec-2012)
Stock Allocation
Infosys
12.25 NHPC
8.4 ITC
5.92
BHEL 4.9
FDC
3.32 GSPL
1.47
Pidilite 1.36
Colgate
0.78
KMCH 0.77
GAIL 0.69
Suprajit 0.63
SJVN 0.34
My PF Top Fund CNX 500 TRI-Nifty
14.498 1.511 0.448 5.382


(Govindarajan) #23

@ Surya,

I totally agree but my investment style is entirely different. I am buying stocks with a different time frame in mind, different return expectations etc. I am trying to discover investor in myself rather than adopting a new investment strategy based on some one’s conviction or style. I feel that is the key to success for any investor. RJ,RD,RKD, SB etc have discovered their own investing style matching their personality. Thats why they are successful. One size fits all does not work here. If every investor in the market buys Gruh, Page etc, how returns can be made from such investments? May be once I mature as an investor, my investment philosophy might undergo a change.

Are you the same Surya who gave his comments in SN->Gruh Finance research page?


(Govindarajan) #24
Stock % Alloc
Infosys 13.23
Can Fin Homes 13.17
VST Tillers 8.9
ITC 8.54
NHPC 8.22
City Union Bank 7.76
Balmer Lawrie 6.44
Oil India 5.51
BHEL 5.07
FDC 4.48
Coromandel 3.2
GSPL 3
Torrent Pharma 2.4
Pidilite 2.06
Bajaj Holdings 1.78
Graphite India 1.37
Travel House 1.28
Colgate 0.79
Suprajit 0.77
Kovai Medical 0.74
GAIL 0.62
Ador Fontech 0.34
SJVN 0.34
Returns PF Top Fund CNX500 Tri-Nifty
23.46 15.33 11.38 16.04

At this juncture, all stocks have gained in sync with the market sentiment. I am planning to increase stake in Travel House and KMCH which are still attractive based on valuations. In case if cyclicals in my portfolio rally, I will think of switching the fund from them to consumer companies. FMCG stocks are slightly out of favour now. I am planning to study Bajaj Corp and Zydus Wellness.

(Govindarajan) #25

All laggards in my portfolio are flying now. Everyone would agree that this rally is based on the hope and not a fundamental based rally. Now I agree investing in bear market is quite easy and not in bull market. I am planning to up my stake in IT, Pharma and FMCG as these sectors will go out of favor as investors would pull money from these sectors and invest in cyclicals and turnarounds. Appreciating currency would also play a major part.

PSUs, cyclicals and CanFin helped me to reach my two milestones

1). Maiden 50% absolute returns since inception of NAV based tracking (now I am at 51.01%)

2). CAGR of 30% (now stands at 32.66% since Dec-12)

I would work on to see if some partial profit booking can be done after the run-up.

I am stuck with Infosys and am planning to study CMC if it offers a better value than Infosys. Good parentage of TCS and better performance than Infosys.


(Govindarajan) #26

Three years ago, I had started tracking my PF’s performance using NAV method. I kept comparing my performance with a top fund, Tri-Nifty and CNX500 just to make sure there is some meaning in me putting some efforts in having a personal portfolio.

Run up in CanFin Homes has resulted in Can Fin Homes occupying 1/3 rd of my PF now. My bet on cyclicals and revival of economy still continues.

Entered Oriental Carbon, Selan and NMDC recently. Bull market has helped me in the last three years. I am very curious to see how my picks are going to perform in a bull and side ways market.


(Kunal shah) #27

Nice to see nhpc out of portfolio


(Govindarajan) #28

It is almost 4 years after tracking my portfolio based on NAV.

Here is the performance. My PF is a multicap protfolio, diversified and bias towards value stocks. I am comparing my performance against Nifty Jr (Multicap) and DSPBR Microcap (I am invested in this fund) to see if active investing still makes sense. It is looking like very difficult to beat Microcap fund but would have to watch for a longer duration but PF was able to beat Nifty Junior but going forward it will be very difficult to beat that index as well. if you see the other side, micro cap fund’s performance cannot be compared with a multicap fund. Let us how it pans out.

1Y	2Y	3Y	4Y

PF 40.73 25.26 41.96 30.25
Nifty Jr 29.22 9.54 24.08 17.70
DSP Micro Cap 31.51 17.39 43.57 32.21

First year is absolute and rest of them are annualized.


(bsahni) #29

Hi Govind,

Can you please share your latest PF & with % & holding duration?

Regards,
Bharat


(Govindarajan) #30

Hi Mr.Sahni,

I did not post my PF as I felt there could be some SEBI violation. Experts can comment if I have to remove this.

CanFin Homes which I invested at the size of 5% of my original PF amount has become 36% now. Though I have trimmed it in three occasions. I will continue to review it performance periodically and take calls on it. Rest of the PF is very diversified.

Disclaimer: I am not an expert and these are not buy or sell recommendation.


(bsahni) #31

Thanks for the quick response.

Appreciate if you can share your holding periods too for the scrips or at least which are the businesses which you have been holding for more than at least 1 year.

Regards,
Bharat


(sunnysachdeva) #32

Sir, Dont you think XIRR is better way to gauge returns that annualized.


(Govindarajan) #33

@sunnysachdeva
I use both NAV and XIRR methods but mostly use NAV for comparing the returns.

As of today’s closing price
NAV method gives 34.11% since inception (13-Dec-2012)
XIRR method gives 38.66% since inception (13-Dec-2012)

In both cases, I am considering dividends received/re-invested, not sure why there is a huge difference.

Can someone clarify if there would be any difference in returns between NAV and XIRR?

Do you also get difference in returns when both the methods are applied?


(Govindarajan) #34

@bsahni,

Except for Esab, Eimco, Ador and D&H, rest all are held for long. The same is evident if you look at my previous posts. I don’t churn my PF quite often.


(bsahni) #35

Thanks Govind bhai for your prompt response.


(Yogesh Sane) #36

@govindarajanv your portfolio record is great so I am not going to comment about your picks.
Just curious to know if you have calculated your portfolio returns excluding Can Fin? Since this is such a large part of your portfolio and it has produced such great results in the last 5 years it must have contributed hugely to your overall returns.
Just curious to know your rationale for allocating less than 2% to so many stocks when they won’t be making much contribution the portfolio overall.

About XIRR and NAV method, I use the same and I usually see the difference between the two in the 3rd or 4th decimal place so in my case results are pretty close.


(Govindarajan) #37

@Yogesh_s

Frankly speaking I see PF as a whole when it comes to returns but what you suggest looks interesting. This will help me to remove any luck factor. What if I have not found can fin or what if I have not invested in it or what if it had not given superlative returns. Thanks Yogesh, let me try getting that information but it is going to be cumbersome as I have been tracking only portfolio value so far.

Regarding allocation, My allocation to scrips depend on the following

  1. My conviction level based on high level metrics, macros and my understanding and analysis
  2. I am a SIP guy using my salary marked for direct equity investments. I do have a greater proportion of my investments directed towards MF. So whatever is available that month for equity, will be invested on whichever stock/s is/are attractive. I don’t keep any cash and I remain fully invested all the time
  3. Some are for tracking position and some like NMDC/GMDC which are cyclical will be divested and lower allocation stocks might move up on the allocation ladder
  4. I don’t mind on number of stocks, as I am a diversified PF guy. If you have 3 to 6 stocks, then you need to do a lots of research but the same quantum of effort will go waste when number of stocks is more than 12. Basic hygiene and my analysis of prospects, risk reward ratio, return ratio etc will make me buy a stock and quantum depends on money available or any stock making an exit, or opportunities available in the market.
  5. I always stay away from euphoria or trend and when you have that style of investment, you have to be diversified not worrying about allocation %. If conviction goes up and return prospects are good, stocks will move up the ladder.

Thanks again for making me explore from a different angle. Let me drill down on my calculation steps to understand where I get the difference in returns between NAV and XIRR.


(Yogesh Sane) #38

A simple contribution analysis should help you analyze how much any one position has contributed to your portfolio performance in any given period. Contribution of a security is the weight of the security in the portfolio at the beginning of the period multiplied by the security return over that period. I usually calculate contributions every time there is a transaction in my portfolio.


(Govindarajan) #39

Below is the result

All are annualized returns.

@Yogesh_s, how to factor in dividends when calculating XIRR? I guess the difference comes due to the way I included dividends in NAV method


(Yogesh Sane) #40

This is really a great performance. Since you beat MFs hands down why would you still invest on them?

I just consider dividends as cashflows so it appear as a cash outflow from the portfolio in my XIRR calculation. I just record the date I received the dividend and the total dividend amount received on that day. I also value the portfolio on every day there is transaction or corporate action (bonus, split, dividends, etc).