Great sir,
where can we found Dr. Hitesh Patel recomendation in this site could you please put on some light here
I am not able to find out such recomendation as you bought companies like .please suggest me where I can found such GEMS.
Regards,
Ramana.
Hahaha. Vijay bhai - I am at best a learner. I am lucky to have been mentored by Hitesh sir and Manish sir. I will surely share and quicken my learning curve by being in the company of Valuepickr community.
This is not a stock recommendation forum. Here we learn from each other and try to analyse stock to the best possible extent.
Sir, even I dont know where does he post his work on Valuepickr. I am still exploring the forum pages.
I am a pure bottom-up stock picker. So, till I am convinced about individual companies doing well, I dont bother too much about sector tailwinds. And I have seen people pick winners by focusing on sectors. So, it depends on individual stock pickers.
Talking about Whirlpool, the logic while buying in 2007 was that in Rs. 400 cr market cap, I was getting an American brand of consumer durables. WMs and Refrigerators formed 90% plus revenues. I saw that they werent in ACs or other durables like microwave or water purifiers. In my interaction with the management, they mentioned about getting into other durables. The market penetration of durables was very low that time (even today, market penetration of refrigerators is less than 22%, for other durables it is less than 15%). So, I decided to buy and hold the stock till losses dont increase too much. To track sales, I used to visit my neighbourhood Vijay Sales showroom once every quarter. I hadnt predicted Whirlpool will grow this well this soon. I just reviewed the stock periodically and decided to hold till I see management doing something weird. I have seen my dad holding ITC for 20 years (30 bagger) and Gujarat Ambuja for 22 years (60 bagger). That made it easier for me. Plus I have mentors like Hitesh sir and Manish sir who keep telling me âdont fall in love with your stocksâ. I cannot thank these three enough.
Are there any recent picks after October 2016?
Truly inspiring. A rare combination of vision,knowledge,abnormal patience and what not. To hold something for 6/7 years requires different mind set. It is essential but very difficult to implement. The word âconvictionâ which is frequently used is very difficult to comprehend when an individual has no means of verifying information which is critical for success. So ordinary folks resort to holding well known franchisees and companies with track record if they have no mentors or no source for getting vital information(not inside) about the company. What I would be interested is the triggers that made you buy certain stocks like Eicher. When you bought Eicher it was not cheap and how got convinced that this could be a great bet.
Wow amazing portfolio
Great picks at right time and super holding capacity
Great job sir
Can you please advise your latest PF
Hey Meet! I am wondering if you made updates in the last few years 
Latest portfolio with portfolio weights
Whirlpool India - 20%
Reliance Inds - 14%
Bata - 7%
Kotak Mahindra Bank - 7%
Sonata Software - 6%
Bajaj Finance - 6%
Dabur - 5%
ITC - 5%
Avenue Supermart - 5%
Mas Financial - 5%
Hero Motocorp - 5%
Balance portfolio - Piramal Enterprises / HCL Tech / Tata Consumer / Indusind Bank
IT will be helpful if you can elaborate, details of your exits and new purchases.
Reliance is a amongst the latest bets (Oct 2019). Avg purchase price is Rs. 1250. Its a bet on malleability of technology / consumer tech / consolidation in retail & telecom
I bought Sonata initially in 2016 and then again in 2019. Avg purchase price is 225. I like the domestic products business and their platform theme and differentiated (IP) services business model.
I bought HCL Tech recently in first half of March @ 530. Its well diversified (in terms of sectors it serves). Also, latest acquisitions and cross selling opportunities along with 12 times earnings opportunity presented an opportunity. It forms 4% of the portfolio.
I bought Whirlpool India way back in 2007 as it was available at Rs. 300-350 cr mkt cap. Over period of time, the rationale behind holding is that it is a bet on under penetrated home consumer durables market of our country.
I bought Kotak Mahindra Bank last year @ 1490 and Bata @ 1600 as bets on consolidation in credit mkt and footwear mkt respectively
I bought Bajaj Finance in 2017 @ 1600 as a bet on different delivery model of financial services
I bought Hero Honda at 1585 (had discussed this in detail on our Mumbai investors Whatsapp group) in March 2020. Rationale was simple - Mkt cap of Rs. 32000 cr and EV of Rs. 26000 cr for Indias leading brand of motorcycles.
Mas Financial is a bet on prudent management, business model and limited competition in the mkt they operate in. I bought it at 400 something during IL&FS fiasco in Oct 2018. It forms 4-5% of the portfolio.
Recent exit was Hester Biosciences in 2019 @ 1700. Rationale was slowing sales growth, rise in competition, aggressive investment plans in Africa which could put pressure on balance sheet.
Sorry for the delay in reply
Thanks 
Checks you follow before entry, will be a good learning
First of all congratulations on your clarity of thinking along with excellent execution and patience! Rare combinations. Also, an experience sharing from Father where you see the long term results at home is a blessing indeed. Top it up with excellent mentors like Hitesh is a dream come true
Coming to your best pick so far, Whirlpool - I have been tracking it for past few years to take a decent position but doesnât seem to give much opportunity. Such stories once fly, only way to enter is forget valuations and buy a dip. I admire you buying it before it took off. Your rationale was simple that you were getting an American brand in a business with long runway at sub 500 cr mcap. But, there are many other such cases also or rather have been such as say a Sharp, Johnson controls, 3M in industrials, Agro tech foods in FMCG - which is still sub 1500 cr mcap. Would be nice to know that what made you chose only Whirlpool among those MNCs as all of them were quoting at very low mcap near 2005 as some of them have flown while some have been struggling as well. Also, what percentage by cost was it in your initial portfolio?
I checked charts of Whirlpool - It was at around 20 rs in 2003 and then a sudden jump to 150 rs in 2010 with no info from 2004 to 2009. Can you pls let me know what happened during these years and why I cannot see that data as you seem to purchase it around 2005?
Lastly, I still feel sub 30K cr mcap for this business and American brand is too less and I should accumulate in dips but seing someone holding an almost 100 bagger in same share is as if I am buying it too late and too costly. But I am aware that you are still holding it is as good as buying it today for you as well. How do you work on this mental block? Same goes for many companies like say a Titan which has grown 500X in last 20 years or soâŚHow do we buy such shares with decent allocation after they have grown like a beast in last decade or decade and a half is a mental block which I have got partially rid of but seems to come back every now and then!
Congratulations again for the almost 70X returns in Whirlpool and allocating fresh to ITC which has been 30X for your father as well. Your story is inspiring. Keep sharingâŚ
My universe of stocks comprises sectors such as consumer facing cos (FMCG and durables), financials, IT, pharma, consumer tech etc. This is consistent to my style of investing of buying and holding cos that grow consistently while deepening their competitive advantage and raising their relative market position. And then ofcourse there are filters like ROCE > 20%, FCF positive etc. There are exceptions to these filters though (RIL being one of them). My portfolio turnover ratio has been in single digits (I hate selling my stocks). So, my universe of stocks is aligned to this behavioral aspect of mine (here too there is an exception like my latest position in Hero Motocorp which is a branded cyclical).
There are many ways to make money in stocks. My checks and balances would be of no use to you unless your investing strategy matches with mine.
So, consider creating your own investing strategy consistent to your personality and consistent to what you are comfortable with. Once thats done, you will get your universe, principles of portfolio construction, checks and balances that are needed, behavioral aspects that will support your strategy etc. E.g. Someone who is an expert in cyclicals would end up hurting returns if she / he practices buy and hold. Someone who is into microcaps/small caps would be better off having a 20-25 stock portfolio (provided she/he manages to find those many ideas in our mkts).
Not many books have been written on importance of investing strategy / philosophy. This according to me is the single most important factor in an investors journey. I am not an expert in this subject matter. Since, investing is more of an art than science, I urge you to bring forth your own created style of investing and practising it rigorously over next few years / decades. Once you choose your way, you will also know whom to follow here in Valuepickr and in general.
I picked Whirlpool India in 2007 at 38-40. Reasons for picking it are shared in an earlier post. If I had picked Johnson Controls India, I would have still ended up with a very good result. I was just lucky that I entered a stock belonging to a sector which was having massive tailwinds. I had picked it seeing cheap valuation (for a known MNC stock) and was intending to sell it at Rs. 1000 cr + mkt cap. But before that, I started seeing the tailwind story unwinding. So, I had not foreseen the sectoral tailwinds and certainly not predicted Whirlpool India doing so well. Just lucky.
Consumer durable penetration in India is still very less (check figures). So, such bets are essentially a bet on rising penetration and quicker replacement of durables. Whirlpool India is not a leader but a good alternative to Korean durable brands for retailers.
Titan has a single digit mkt share in jewelry. Next best is a fraction of Titanâs size. So, even if jewelry mkt doesnt grow, Titan would still end up growing and perhaps end up as a monopoly in gold jewelry mkt in the next 10-20 years. Plus they are growing their casual / daily jewelry business as well.
Best way to think about such cos is - how wrong can I go? Can I atleast recover my capital in next 1-2-3 years and move to another story/stock?
Thanks for sharing your thoughts. I agree on the penetration part. Infact, if you take Johnson Control, then AC is currently most underpenetrated consumer durable sub segment in India and highest growing in last decade second only to mobile phones. Whirlpool, although not a leader in India yet, but is a leader in US in many sub segments. Also, it is one of very few AC companies which has a complete in house manufacturing of compressors in India - the most critical part of an AC. People who would research on product quality and buy would chose a Whirlpool, Bosch, Siemens, Hitachi (US, German and Japanese) anyday over say a Samsung/Voltas for AC/Refrigerators/Washing machines etc. Voltas has a different edge being a TATA company, good reach and trust for service along with price points play. If product innovation and premiumization plays out, then these top quality companies would keep growing at good pace. Whirlpool has a sub segment for integrated kitchens alsoâŚare you aware of how that is playing out and whats the demand scenario in India? There are very few options from top quality brands for integrated Kitchens in India and also the sub segment is far from mature yet and maybe still nascent. Would be good to know your thoughts on integrated Kitchens and any other top player in this area.
Also, regarding Johnson controls, can you pls let us know if the Indian listed entity includes only the Hitachi air conditioning part of the bsuiness or the complete offerings and services of Johnson controls India - like smart buildings etc.?
Your last two lines are very interesting way to look at it of moving to a different story if current doesnât play out. I sometimes think of it this way that although these companies are up 100 to 500 times in last 20-25 years, this doesnât mean they have reached their peakâŚwhat this only means is that back then, they were available really cheap and that was a diamond era for investing in India, while today being a golden one
Best Wishes and keep us posted, would be good and inspiring to hear from you !
