Hitesh portfolio

(ukdube) #3272

Too many uncertainty and unpredictable events are lined up in 6-9 months , market vitality is inherent.I am also of view to remain in cash for coming opportunity. In fact I am increasing my cash based on market up move.I have a feeling 9500 is a possibility.


Most of you are of the opinion that the worst is yet to come in view of the upcoming elections and other macros which may unfold in the next 6-9 months and hence moved to cash in substantial way. However I have a feeling that during the last 10 months, the market may have priced in these uncertainties and possibly the market may have bottomed out. This is only my opinion, not backed by any technical analysis as I am not proficient in it.

(Hitesh Patel) #3274


Thanks for your views. I would like to pen my views and some of it at the cost of repetition.

First of all we have corrected 15% from the top which is usually a regular sort of correction that happens usually once or twice a year. The reasons often are different. In the past these were sometimes domestic and sometimes global. Nov 2016 to Feb 17 was clearly due to demonetisation and its perceived effects. There the picture was pretty clear that things would definitely pass but no one was certain about the time it would take.

The correction starting feb 2018 was more to do with dealing with excess froth built into the system and to add to that the govt made the stupid blunder of levying long term capital gains tax. The small-midcap correction that had started since then has clearly seperated the boys from men. But during that time a lot of froth had been built into NBFC space. That now seems to be getting taken care of.

Coming to current situation, I feel the overhang of election outcome is something that cannot be wished away. If a single party or a cohesive coaliton is going to cross the line comfortably then that would be known only atleast one or two months before the elections. It may even take the time till declaration of results which might go on till May-June 2018. In the near term, BJP is going to face some tough music in Rajasthan atleast and we need to see how it fares in the other states.

Coming to risk reward equation, for me its pretty clear that if things change for the better in terms of market sentiments, the change in mood would be pretty evident. And the thing I suffer is that I might have to buy companies at 10-20% higher prices than what I might like to pay if I buy now. But the other side to the equation is that if the correction till now was only the trailer then the downsides could be significant.

The big positives have been very good numbers reported for q2 fy 19 and crude which seems to be weakening as of now. The negative is US dollar not coming off significantly, rising global interest rates, and the political uncertainty. Another factor which came across while discussing market risks with a market veteran recently is a soft landing in Chinese economy. According to him it was the single biggest risk factor. (I never thought about it). And of late a lot of global markets are also coming off strongly. That could trigger a global rout. If markets were to go down post the current rally I dont know where the fall could end.

So in essence if I were to take a big risk like the risk of political uncertainty, I would like to buy things at very attractive rates which I dont find even after the recent correction. What the strong multi year rally has done to our thinking is that we consider 20-30 PE as attractive for companies growing at 15-20% and 30-40 PE for compounders. If one compares these to the times of 2011-2012, these valuations would appear very expensive.

I prefer to remain circumspect about where the markets are headed and keep focussed updating my watchlist with companies which I feel are going to have good business momentum for next 2-3 years.

Technically I would watch out for resistance in the zone of 10800-880 where a falling gap could offer strong resistance. Till now the indices have not been able to go above 200 day moving average convincingly. The current upmove seems to be a potential right shoulder in a bearish head and shoulders pattern. Lets see how things pan out.


Thank you for your valuable views. I have seen you correctly calling the mid cap meltdown as well as the recent NBFC one. I had planned to add Pidilite, Kingfa ,Vaibhav Global and Havells during the recent meltdown but some indecision at the right time saw them bounce off pretty smartly from their recent lows. This may have skewed my views. It is very kind of you to have taken out your valuable time and express your views on my opinions which are amateurish.

(CP) #3276

Dear Hiteshji, thank you for your excellent analysis. I’m quickly realising that tracking businesses with a good momentum in the next 2-3 years would require a great deal of time, patience and discipline and that wouldn’t be easy for a novice investor like me. Although I’ve been making good progress by gleaning insights from investors like you, I have to admit that I’m no where close to a balanced, low-risk, long term wealth creation strategy. I would definitely agree that good businesses are still way too expensive from a P/E perspective as well.

Therefore my strategy is to concurrently begin investing in Nifty 50 & Nifty Next 50 Index Funds from UTI (lowest expense ratio) starting around 10,000 levels onwards and gradually increase it as it moves lower especially if the stocks I’m tracking do not get attractive enough. My question to you would be this-

  1. Is this something you would recommend in terms of a low-risk strategy?

  2. What point would you say the Nifty/Next Nifty is attractive enough to start dipping in? Would 10,000 a good level to enter in terms of value?

Thank you.

(Pramod) #3277

Dear Hiteshji,
Thanks for indepth explanation .Appreciate your thoughts.
Do you look for business momentum for next 2-3 years perspective or a long term perspective of more than 10 years?

(Hitesh Patel) #3278


Regarding a low risk strategy what you have in mind is perfect for someone who doesnt have the time or patience to learn the details of investing. Index investing has low impact costs and if one has the mental mindset to keep averaging on the way down, thats the way to go.

Having said that, I think since you have been on this forum, it would be a good idea to take a leap forward and try to learn the ropes. I myself came from a non investing background and read my first investing book in 2008 at the age of 41. But after reading One up On wall street, I took up investing like fish to water. So if you can read a couple of books just to find out whether the investing bug excites you, it would be a good idea. And with a sideways/ down trending market there could be plenty of time to learn and observe and practice what you learn.

Once you get the hang of basics of investing it will be your passion that will drive you further. What I have seen in most people is that even if they have enough knowledge about the field they cannot take it to the next level because of lack of interest or conviction or half hearted efforts.

(CP) #3279

Thank you Hiteshji. So far I’ve come to the conclusion that its best to take care of one’s investments oneself, learn, make mistakes and hopefully get better with time. Considering the rate at which I’m learning new things on Value Pikr, I’m pretty confident of reaching my goals far sooner than expected.

My learnings & strategies so far

  • I’ve decided to go it alone instead of Active Fund Management i.e MF/PMS. Passive Investing via Index Funds is for safety and shouldn’t cross 40-50% of the total portfolio

  • ILFS was a big black swan moment for me and I lost close to 8% in Tata Money Market. Hopefully this should recover over time. So I’m reworking my debt investment strategy and reorienting towards FD’s. Also learning & investing in Gov Bonds/Short Term Gsecs etc directly instead of via the debt MF route.

  • For stock ideas I’m relying largely on Valuepikr as well as some paid advice.

  • Hopefully this will all be part of my overall Financial Goal Planning & Wealth Creation Strategy. I’m still working on giving final touches to this overall strategy based on risk/reward, time invested vs. return i.e passive/active etc.

Will begin reading the Peter Lynch book you have talked about. This I guess has been missing so far.

Since you have been pretty generous with your advice and your time Hiteshji I decided, the least I could do is to give you an idea of how I intend to follow-up on it and make good use of an exceptionally high-quality, free and opensource forum like Value Pikr instead of taking things for granted.

Thank you once again for inspiring me, Hiteshji.

Hoping to learn much more from you and on Value Pikr!

(Abhishek Jain) #3280

indeed it has thrown impressive names.

(Abhishek Jain) #3281

Dear Hitesh Sir,
Thanks from the bottom of heart for being honest and helping people in their journey of financial independence.Kudos and Keep it up.
I too have a dream of being financially independent and building my portfolio which can give me 15 to 18% CAGR till 2021( almost 3 yrs from now). If I am able to do so, then I can look for some other aspects of life and career.
With an objective of returns mentioned above, here is my portfolio, with % allocation.I have invested a good amount in the recent drawdown of sept/october and thus average buy of most of the scripts is quite fair.
Request your review and guidance. I will be grateful:

S.No. Stock % Allocation

  1. Asian Paints 3%
  2. DMART 3%
  3. Bajaj Auto 4.5%
  4. Baja finserv 4%
  5. Britannia 3.5%
  6. Everest ind 5%
  7. Finolex cables 2%
  8. Graphite India+ HEG: 5%
  9. HDFC 4%
  10. HDFC Bank 6%
  11. HDFC AMC 5.5%
  12. HDFC Life 4%
  13. Tata Elxsi 2%
  14. Jamna auto 3%
  15. Jubilant foodworks 3%
  16. L&T Finance holding 3%
  17. Maruti Suzuki 8%
  18. Thyrocare 2.5%
  19. Sun Pharma 2.5%
  20. Page Industries 4%
  21. Piramal Enterprises 4%
  22. Pidilite Industries 4%
  23. Radico Khaitan 2%
  24. Reliance Industries 3%
  25. RBL Bank 4%
  26. CDSL 2%
  27. Dalmia Bharat 2%
  28. Blue Star 3%

Also request other senior investor tribe members to provide your valuable feedback.
Keenly awaiting your feedback

Abhishek Jain

(draveshia) #3282

That’s great list of stocks. A bit too many to track but peter lynch used to invest in a lot of stocks. Over hundred in the first year of his managing funds.

(Yushma) #3283

If I am looking at investing from a 5-10 year perspective, does it make sense to invest now or wait for correction as the election nears

(Hitesh Patel) #3284


You can please start the discussion on your portfolio in your individual portfolio thread which would enable you to get feedback and focussed discussion on your stocks from a wider group of investors.

And in the list please put up your logic for investing in the companies you have high allocations to.

We will take up the discussion forward there and I will contribute my views there.


(Hitesh Patel) #3285


For anyone investing for any time frame, the price which is paid to buy a company assumes a lot of importance. e.g If in a company X currently quotes at rs 100 and in 5 years doubles to 200 you get roughly 12% cagr returns.

If same company is bought at Rs 50 (its a hypothetical situation) and you get same price of 200 in 5 years, you make a 4 bagger.

Thats what accelerates compounding and hides some mistakes one is bound to make in some of other part of portfolio.

This thought process of investing for next 5-10-15 years gets severely tested when stock prices go down 30- 50-70% from the buy price. Very few people have the mental fortitude to keep holding on to the stocks in portfolio in the face of such severe dents. Its very easy to take a call for next 5-10 years and extremely difficult to hold on to the stock even for next 5-10 months if prices move severely against you.
And sometimes even if the price moves up much faster than you anticipate. :grinning:


Hi Sir, Does that mean, averaging down is good to reduce avg buy price and hold for long term for better cagr returns. Assuming its a reasonably good stock. I recently made a portfolio of 10 stocks, however I anticipate few stocks in my portfolio to go down by 10% to 20%. Should I double my allocation to lower buy price. Or wait & watch…kindly share your experience in averaging down.

e.g. Yes bank, Avanti feeds in my portfolio.

(Abhishek Jain) #3287

thanks Hitesh sir
Have posted my portfolio in an individual thread: " abhi’s portfolio"
Please provide your feedback

(kris2727) #3288

Hello Hitesh sir,

Could you please let me know your view on V2 Retail as it is in consumption sector and it’s in Tier 3/4 cities. Q3 results was disappointing even though festival were moved to Q3 and per management SSG will be 0% in near future due to intensive competition. To me it looks like that Rural consumption is not picking up as it should have negated some competition.


(Ramesh Patel) #3289

Hitesh bhai,

Would like to know your views on Talwalkar duos after demerger. Even as a combined entity also the erstwhile Talwalkar Better Value Fitness was doing reasonably well and was perhaps the only listed company from its sector.

Now as the separate entity, though the fitness business (Talwalkar Lifestyle) is still growing reasonably well it is quoting at ridiculously low levels by any standard. Quite intriguing or may be market is knowing something that we the retail investors are not aware of !! Lifestyle business (TBVFL) is also growing nicely with good future plans (Pl. see Q1 and Q2 results) and a south based prominent investor has already taken the entry.

Another such irrational pricing seems to be for Take Solutions (Pl. see Q1 and Q2 results) also. I am not able to find the negatives for such low valuations of these stocks particularly Talwalkar lifestyle & Take Solutions.

I am not sure whether u r tracking these stocks, but seek your views about their investment worthiness at presently prevailing prices.

Thanks & regards

(Abhishek Jain) #3290

I would add my 2 cents if you dont mind.
I was invested into this company earlier (just before demerger) and invested a good chunk on the day of demerger; they played with the retail investors by not properly announcing the demerger dates and secondly, created confusion with the names of the 2 entities ( i am still confused with the name swapping funda);
Needless to say this is a typical case of mgmt misleading investors; you can find multiple threads if you google on demerger thing. Read articles from CNBC and capitalmind.in
Perhaps it is because of this reason that the stock is available cheap due to questionable mgmt.

I may be biased because I lost a lot of money in this.But these are my views.

(Hitesh Patel) #3291


I havent tracked Talwalkar since a long time. As a concept stock it was looking a great idea but it didnt deliver too well on investor expectations.

And as mentioned by @abhijain the antics of management dont seem too well.

I think since this correction has and will throw up much better opportunities it might be prudent to focus on better quality businesses and better quality managements.