Mahesh's Portfolio

[mahesh1980]

Hi, I am a lecturer by profession and investment in stocks is something I take very passionately. The following are the stocks I have bought into in a regular basis since 2012 september. It has generated a CAGR of 26% till date. My approach is to buy a small quantity of stock every 15 days trying to catch a stock at the yearly low.
I would like to solicit the learned views of board members on the same. Thanks and regards

3M India 1.10%
Abbott India 1.53%
Accelya Kale Solutions 0.62%
AIA Engineering 1.22%
Ajanta Pharma 0.95%
Akzo Nobel India 0.81%
Alembic Pharmaceuticals 0.57%
Amara Raja Batteries 1.34%
Amrutanjan Health Care 0.93%
Astrazeneca Pharma India 0.70%
Aurobindo Pharma 0.62%
Axis Bank 1.00%
Bajaj Auto 0.94%
Balmer Lawrie & Co. 1.20%
Banco Products (I) 0.78%
Bayer CropScience 0.94%
Bharat Electronics 0.66%
Bharat Forge 1.57%
Bosch 1.72%
Bosch 1.14%
Bosch 0.57%
Cadila Healthcare 0.81%
Canara Bank 1.54%
Castrol India 1.94%
Clariant Chemicals 1.05%
Coal India 0.34%
Colgate-Palmolive 1.34%
Container Corp. 2.17%
CRISIL 1.87%
Cummins India 0.99%
Divi’s Laboratories 1.92%
Dr. Lal Pathlabs 0.77%
Dr. Reddy’s Lab 1.49%
eClerx Services 0.65%
FDC 0.40%
Forbes & Company 0.52%
Gandhi Special Tubes 0.30%
GE Power India 0.83%
Gillette 2.69%
Glaxosmithkline Pharma 1.22%
Glenmark Pharma. 0.62%
GMM Pfaudler 0.85%
Godrej Agrovet 0.53%
Godrej Consumer Products 0.68%
Goodyear India 0.87%
Greaves Cotton 0.68%
Grindwell Norton 1.48%
Gujarat Pipavav Port 1.08%
Haldyn Glass Gujarat 0.70%
Hawkins Cookers 0.73%
Hercules Hoists 0.63%
Hexaware Technologies 1.35%
Hindalco Inds. 0.99%
Honda Siel Power Products 0.65%
ICRA 0.67%
Indoco Remedies 0.75%
Indusind Bank 0.98%
Ingersoll Rand India 2.00%
ISGEC Heavy Engineering 0.23%
Jagran Prakashan 0.32%
Kansai Nerolac Paints 1.08%
Kennametal India 1.79%
Khadim India 0.25%
Kirloskar Ferrous Inds. 0.74%
Kovai Medical Center 0.49%
Lakshmi Machine Works 1.11%
Lupin 1.80%
Mayur Uniquoters 0.84%
Menon Bearings 0.84%
MindTree 1.63%
Modison Metals 0.42%
Motherson Sumi Systems 2.63%
MPS 0.99%
National Peroxide 0.27%
Nesco 1.06%
NIIT Technologies 0.95%
NMDC 0.93%
Orissa Minerals Development Co 0.59%
Panasonic Carbon India Co. 0.45%
Panasonic Energy India Co. 0.85%
Pfizer 0.94%
PI Industries 0.73%
Sanghi Industries 0.43%
Sanghvi Movers 0.50%
Sanofi India 0.94%
Schaeffler India 0.16%
Sinclairs Hotels 0.31%
SKF India 0.80%
SML Isuzu 0.29%
Solar Industries 1.34%
Strides Shasun 0.28%
Sun Pharmaceutical Inds. 0.66%
Symphony 1.70%
Tata Motors 1.46%
Tata Power 0.91%
Tata Steel 1.32%
Texmaco Rail & Engineering 0.75%
The Byke Hospitality 0.64%
Thermax 0.96%
Tide Water Oil Co. (India) 0.66%
Tide Water Oil Co. (India) 0.00%
Veljan Denison 0.68%
Voith Paper Fabrics India 0.99%
Wendt (India) 1.14%
Wim Plast 0.82%

[dd1474]

Apology for unsolicited advise. why not be invest in ETF of Nitfy/Junior BEES? your portfolio is more diversified then even mutual fund. You may consider streamline around 20-25 idea for which you have conviction in my opnion.

Wish you happy investing.

[seeankur]

Suggest you to trim portfolio to max 20 stocks. If you are buying so many stocks then simply go for mutual fund.

[mahesh1980]

Thank you sir, your quick reply is highly appreciated. However with mutual fund i have to bear extra 2.5% of my returns as the expense ratio. but i do understand the rational behind your thoughts, thanks again!

[mahesh1980]

Thanks for the suggestion:blush:

[MHS]

Mahesh

One starting point is sell all the loosers and redistribute to winners and see how the PF will shape and then work on more conviction stocks.

[Cshar]

OMG, I can see all alphabet in this portfolio, restrict to maximum 20 stocks. It looks you are more fearful while investing.

[Uservijay]

For tracking so many stocks, you must spend a lot of time. That means the 2.5% savings from expense ratio must be offset by your day job. Is that significant to replace your day job?

However with mutual fund i have to bear extra 2.5% of my returns as the expense ratio

[mahesh1980]

Ya, frankly speaking I don’t do much of tracking after buying a stock. Only thing is before I buy I check for these two things

1. Reserves >= Share capital X 10
2. Debt to equity ratio < 0.2
3. Return on equity > 12
4. Altman Z score >3.5 ( value research helps me in this)
   As I mentioned earlier Till now it has given me 26% CAGR in the last 5 years. (Even though for much of 5 years it was hovering between 10 - 16%, of late because of the spike in the market it reached there). But I would happy if I could get something in the range of 15% long term.

[Uservijay]

Last few years, one can throw a dart and can get >40% returns. If we don’t track stocks on at least quarterly basis, we could miss opportunity to either add or sell the stock. If we prefer passive investing, we could choose index.

[mahesh1980]

Fearful yes, I am! I mean I don’t have the expertise to confine myself for 20 stocks. and I do understand with a concentrated portfolio of 20 stocks chances of high return is also high.
However trying not to sound rigid or adamant, let my try to put across my point. A mutual fund portfolio actually can have up to 70 to 80 stocks. Was wondering why we individual investors cant try to do the same that mutual funds do, minus the frequent churning of the portfolio. Buy strong companies and hold for as much as possible. There may be possibilities of great business going bankrupt held over a long time , but chances of multibaggers are also more.
In fact in "One up on Wall street " legendary investor Peter lynch writes, stocks held over very long term also can be risky. (Interestingly he makes repeated mentioning of Toys “R” Us , a famous toy company which gave him great returns. But couple of months ago company filed for bankruptcy! ) But the hope is that, to quote Lynch again “if u get 6 out of your 10 stocks right, then you can beat the Wallstreet”. So hoping for the best!

[mpbhat]

Point to ponder: If some of the above stocks in your portfolio go up by 10 times in the medium to long term, but does not contribute significantly to your overall net worth, is it worth all the effort of your buying/selling/holding these many companies…

[mahesh1980]

Thank you sir for your thoughts.

[mpbhat]

Pls consider consolidating your holdings.

As a first step,list these stocks by industry/vertical, you are likely to get a better picture (portfolio construction & fund allocation is as important as the stocks you own). Then plan on either adding to your highest conviction bets (or) selling companies where story does not look as promising now (as when you first bought them). Keep tracking these companies/business/industries and with time, I am sure you will get to understand them better, so you can then decide on adding them or switch to newer ideas over the medium to long term.

Most good investors I know like to have at least 3-5% in any of their stocks. Hope this helps.

Wish you good luck.

[mahesh1980]

Hi Prem sir,
That sounds quite practical. Even though I try to understand a company with the publicly available information as much as possible, as u rightly pointed out with time things may change or I might have done a wrong analysis in the first place. Thanks again for your response
Regards
Mahesh

[hitesh2710]

hi

You can consider the mutual funds returns of a few fund houses since Sep 2012 and compare it with the kind of returns your PF has generated. If the MF returns are significantly better its no use going to the effort of having so many stocks and monitoring them.

My suggestion would be to try to focus on few good companies which have proven themselves over time and invest in them. that might provide better than MF kind of returns.

[Cshar]

Maheshji, please don’t take me negative. When you enter equity markets, you are already in war zone competing with all other investers, need to tracks all positive & negative news yourself & make sure your portfolio goes up. It’s not an easy task. Getting continuous growth of 15% on portfolio is possible with diversification however diversification limit your gains. Any stock in your holding becomes a 10x will make huge difference if allocation is 10% of portfolio however will not make much in case of 1% of portfolio. My style of investing is below

Maximum stocks 20
Minimum stocks 15
Trade 10% of holdings in portfolio
Jump to better opportunity anytime you find with swapping with underperformers (this is bit risky as u will jump in at higher price )
1st 5 most conviction bets allocated 40% of portfolio
40% portfolio devided in 8-10 scripts.
10% new scripts), high risk bets, number of stocks 5, 2% allocation

Last year I entered meghmani at 2% holding which is now 10%. It’s a 3x.

I am rotating or quitting partially as price start
moving up. It’s concept of “spring” get out where spring is stretched & get it where spring is compressed

Best of Luck

[mahesh1980]

Hi Hitesh sir,

It’s indeed an honor that you took time to go through the post. Also sir, may I humbly request your thoughts on buy and hold strategy. I would be very curious to know your views on it and it would be really helpful.

And secondly, as you advised , I will surely compare the returns with that of mutual funds. In fact I had put some lump sum amount in Franklin India high growth companies (G) on March 28, 2016 It has given me a return of 29% as of now, which is around 3-4% higher than my stock investment. However my stock investment is spread across different market cycles. So I am convincing myself that I am not doing too bad.

But I can see a clear case to make the portfolio more concentrated as you pointed out. Again thank you for the response sir!

Regards,

Mahesh

[mahesh1980]

Hi Cshar sir,

I surely didn’t take it negatively. I fully understand the point that you are making. In fact I have learnt it the hard way. In June this year I took a small exposure (I know I take small exposure even otherwise! this was much smaller than that too) in Forbes Gokak. In 6 months stock has become a 3 bagger. And I cringe within myself as it goes up, for not having a larger pie in that.

Also it was so nice of you to throw some light on the way you do it. It looks quite sophisticated. But how effectively a novice like me could implement it successfully is debatable. But eager to learn though interaction with you and other elite members of this platform.

Thanks again !

Regards
Mahesh

[mahesh1980]

Hi, the recent fall in the market had a huge bearing on the portfolio. The 26% profit I was talking about has come down to 11% in a matter of six months. Hoping the midcaps make a revival