Is your portfolio in green YTD? Time to help others!

(pradip) #1

Dear boarders,

With the market making wide swings off-late and stock price of even good quality companies in red this year, I am sure for some of us also our portfolio is in red as well this year!

At the same time, I am sure for rest of us, the overall portfolio is in green (up by >0% YTD). This is quite an achievement and a result of good investment principles. I hereby, invite fellow board members in this category to share their winning investment principles for the benefit of others.

Some rules to follow (in order to ensure the topic stays relevant) -
a. Please avoid sharing generic investment principles. Try to be specific and back with examples.
b.Please avoid criticizing investment principles you don’t agree with. Lets try to keep a positive tone.

P.S. Senior boarders, please close this thread if it doesn’t abide to forum principles…
Disclaimer: My own portfolio is down 11% YTD!

(Paulbiplab) #2

Overall, mine is also red (-9.7%), but my portfolio is only one year old.
There are some stocks like Kwality, Force Motors, CanFin Homes which has dragged the overall profitability down.
But the silver lining are stocks like Tata Elxsi, Gujarat Alkali, Lupin, Exide, Greaves Cotton, ITC which are in green.

(1.5cr) #3

My portfolio is down about 4% and that was because of a fall in edelweiss otherwise the pf is a few 100bps in the black.

The reason why this has occured in my eyes is primarily because I had bought companies that had not run up in the bull markets. I did not hold the low quality financials and mid and small caps. I bought cos like SAIL, Tv18 Ge power. I held a cement company for a while and got out as I lacked conviction on that company, still bullish on cement though. I managed to snag orient refractories at 150 that is what has pushed the pf up. In addition to that I managed to exit Rain close to its peak valuation. That gave multibagger returns. Im not bragging, I got extremely lucky by entering and exiting alot of companies quickly as I lacked conviction, these companies were in the infra space and are down significantly now. I also held dewan for a couple of weeks last year. So in essence Ive just gotten lucky. I would say Im even as of now. But Ive completely restrucured my portfolio. I continue to buy edelweiss as well.
Overall it was just luck. But what Ive learned is, never ever overpay for growth unless and until quality of mgmt and quality of earnings are present. Essentially what im saying is pay up for a bajaj finance that is growing at 25% plus dont even pay a reasonable valuation for a dewan housing even if it is growing at 40%+. You can compromise on mgmt as long as it is built into valuations. For eg SAIL is literally written off by the market. Trading at some 3800 rs ev per ton whereas a bankrupt bhushan steel was aquired for 6800 or so ev per ton.
But the challenge is these days we dont even know for sure if quality is quality.
I guess to summarise, dont buy low quality mgmt unless its built into the valuations. Also always do good karma because luck is very much needed haha!
Im very new to investing im only a year old so i can be completely wrong. I take no credit for the decisions that ive made.

(mylu) #4

Good topic… Mine is in red <10%… TCI XPs is saving grace showing green. Rest 3 indigo, vguard, cdsl are going down almost regiuarly :slight_smile:

(Devaki Nandan Tripathy) #5

I have some contra opinion here. If your investment process has served you well for a reasonably long time frame, two quarters of drawdown need not warrant a change in investment strategy. If the process is changed in hurry without proper backtesting, it may be counterproductive. One needs to trust oneself, or else, find the best fund manager one can and invest in his/her fund.

Disc. Overall pf was just positive till last week for this calendar year. But then BOB-Vijaya-Dena merger news and Yes Bank saga propelled it into red… :grinning:

(Pratik--Patel9) #6

My pf is down 4.25% However, this is after booking losses in many other mistakes that I made so far. Because I am relatively new to market, I made some mistakes early this year but then as I researched more about some of my choices I realized that they were bad choices and I cut them down immediately. Thankfully, I was able to cut out almost all mistakes before this carnage and the businesses that I have now are good enough for me to have conviction. Few day before this correction, I sold some low conviction choices and raised some cash expecting some correction. I was already holding some cash because we were at top range of bull market. This has helped me. I have about 35% in cash and I am now looking for investment ideas and attractive businesses at better valuations in coming months.

Key Takeaways from my experience so far :

  1. When valuations are high, never invest full amount in one shot. I started investing in Dec 2017 when markets were really high. I chose some good businesses and invested their full allocation in one shot. That was a mistake. Some were bad choices and they were hit severely in July 2018 correction. I had to book significant loses.
    Now, when I find valuations to be reasonable wrt current market conditions, I start investing in chunks of 20% or 25% or even less. For example, few months back I liked Edelweiss a lot and thought it could be a good investment for long term but valuations were high so I only invested 25% of my total allocation for Edelweiss. After this, stock was showing constant weakness so I did not add more. Now that new worries have emerged for such businesses, I am so glad I just invested 25%. This has given me power to buy it at a cheaper price.

  2. Equity market never moves linearly. It moves like a pendulum in cycles of 7-8 years. We usually have about 1 or 2 years of correction followed by 1 year or so of consolidation which is followed by 3 to 4 years of bull market and then the cycle repeats. Because India is in a long term bull marker, the period and scale of bull run is larger than that of correction. This helps a lot in understanding which phase of cycle we are in. 2013 we had a sharp correction, after that we had some consolidation and last 3-4 years have been bull market. So I am pretty confident that market won’t go up the way it did in last 3 years or so. We are either in top territory of bull this bull cycle or at the beginning of year of correction/consolidation. This helps in controlling fear of missing out since I know market isn’t going anywhere soon. However, because we can never precisely time the market we should always gradually build our portfolio, how much cash should be held is based on where we are in the cycle.

  3. Power of cash : In an interview Mr. Govind Parikh said something which I’ll never forget. He said, "let’s say a stock moves from 100 to 10, it has corrected by 90% but when it moves back from 10 to 100, it has been raised 1000%! " This is the power of cash in times of correction. Every year, we usually get couple of opportunities to buy stocks at much cheaper price than the average price of that year. It’s also true in multi-year period. So, holding some amount of cash is always good, especially when we are in top territory of bull run.

(Avijit Mukherjee) #7

Hi Pradip ,

Mine is around 6 - 7% in Green … but what baffles me is that companies with good numbers and fundamentals are being not recognized / beaten down in the market mercilessly. Where as some companies like Sandhana Nitrobenzene has gone up more than 20 times in a short span of time . There are many more examples like this … any thoughts on whats happening ?

(pradip) #8

If quote Amit Mantri from his twitter feed, this is in simple terms whats happening -

@ 22:30 - “It’s terrifying. Others are terrified. That’s why they are selling. That’s why they are saying “I don’t care what the price is. Just get me out”. That’s when you want to buy. But the things that terrify them into selling will also terrify you. You have to overcome it.”

Attached are the notes from investor I downloaded from Prof Bakshi’s blog. Its pretty cool. Its an interest read in current times.

(S_Banerjee) #9

Not opening the content/link/pdf. Any other way to share please?