I have been in market since 2010, when I was an engineering undergraduate student investing my scholarship money in the markets. I read all sorts of books and was most influenced by Grahams’ philosophy of buying ultra cheap stocks and selling them when they didn’t seem so cheap. That philosophy didn’t really work well and I ended up losing half of my scholarship money.
This made me dig deeper into the art and science of investing and it took a whole lot of effort to fundamentally shift my view ONLY buying cheap stocks to buying stocks that are relatively undervalued but are growth oriented.
Adopting that method, I invested in early 2016 and currently my investments have produced a 11% okayish CAGR in the last 2 and a half years. As the title says, I am currently striving to build a portfolio that can produce a 14-15% returns for 15 years. I will be reviewing my rationale every month and in process eliminate the short term noise to focus on the longer picture. Key things that I look at when evaluating an investment:
- Management quality: Integrity and walking the talk
- A defensive barrier
- Would I be good with owning the company as an owner and not just as a shareholder
- Impact of technology
- Probability that the company can grow at a decent pace for a long period
- Whether the company is justly priced (this one is very tricky, but I try to stick to a process)
- The longer term macro environment of the industry
Here’s the portfolio that I have created using the above points as guiding principles:
- Britannia Industries
- HDFC Life
- Bajaj Finance
- RBL Bank
- Eicher Motors Ltd.
- Finolex Cables
- PI Industries
- Care ratings
- L&T Technology Services Limited
- Multibase India
Also researching Dewan Housing Finance, Kotak Mahindra bank, Page Industries, Havells, V-Mart, Tasty bites and Minda Industries. The issue with these companies is largely growth prospects in the longer period.
I regularly read ValuePickr to gain insight on stocks and to better my investment philosophy. The post is to both elicit a discussion on the portfolio and better the investment thought process.
Thank you esteemed members