My performers - kalyan's portfolio

Q&A: Questions & Answers Portfolio Q&A
1

over four years of continuous learning about stock markets and testing different methodologies, I have finalized my portfolio of 20 companies. I wish to stick to it except for any dramatical changes in the economic scenario of india.

companies with >7 % of allocation
page industries, Havels india, Britannia, astral poly technik

companies with 5-7% allocation
eicher motors, pidillite, ttk prestige

companies with 3-6% allocation
sundram fastners, solar indus, security & intelligence services, minda indus, dmart, amber ent, asian paints, bajaj fin serv, navin fluorine

tail enders (<3%)
adv enzyme,dixon tech, natco pharma, varroc engineering

I built my portfolio with the companies having strong and ever increasing cash flow since many years. Most of them are increasing continuously instead of sudden spikes for at least a decade. All are having good fundamentals. Unexpectedly I have finalized this list of A grade companies of rating agencies. I have tried to avoid cash sensitive (require large amounts cash for operation) companies.

I have not fixed percentage of allocation to any company. Depending on the performance of company (increase in share price) I will keep on adding some more shares. If I find some thing very potential candidate, I wish to add it without selling existing shares.

Why I have diversified?
I have frightened by the ongoing disturbances in companies due to lack of good management. I dont want to loose my capital and I want to limit the risk I am taking. My target is not to find multibaggers but to find the equities that can give good returns than any other asset class stably.

Why I wish to add the performing ones (even at high price) than the valued ones at low price?
If I buy valued ones I may have to wait for years. Any thing may happen meanwhile. If it wont perform due to unforeseen events, I will be depressed. But when I buy the performing companies, I always have the chance to sell my entire portfolio with in few days through out my lifetime with little risk. Ofcourse, I never wish to do. But it gives me peace of mind.

suggestions are invited from the experienced investors of this forum.

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2

It was nice reading a sensible list of companies. It looks like a rock solid PF. However, I wish to ask you, how do you rate yourself as a PF manager In terms of understanding the Dynamics of each company that you have invested in, knowing their valuations, and basically knowing their earnings on the near term.

I rate myself a three on ten. Even for a good company like Page, I am not sure about several important things that would me to have good returns.

3

I understand that, I may have missed some important points and it is difficult for me to keep track of all important changes of each and every company. Thatswhy I have diversified.

4

Diversification is not the solution, when it comes to a midcap portfolio. @Yogesh_s recently made a fantastic post about how most midcaps are not able to cross the “chasm”.

It is tough for weak business to crossover such difficult times as now.

If you are relying on diversification to keep your PF afloat then I strongly suggest you go with a portfolio of Nifty 50, where your capital will be safe at least.

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5

Thank you very much. I will go through it.

6

I feel that mine is not a diversified one. Because i have choosen a list of performers and depending on their performance only i will keep on adding them. (I will add only best performers…but not each and every one). May be I would be left with 5 to 10 stocks while all others will be tailenders.

7

I have even tried

A concentrated portfolio.
Pros: yes, performance is far more better than diversified.
Cons: if some one is not performing even if everything is good, you may have to wait for years to make sure that you are correct. I.e. lot of patience required. No entertainment to small investors like I. you must be very good at selecting the stocks and always track them. Because even a small mistake causes big damage to your portfolio.

A performing multibagger portfolio:
Pros: it will give huge returns when you choose right stocks.
Cons: it is more difficult to hold a multibagger portfolio than selecting stocks. It is volatile enough to cause heart attack to a common man. My total portfolio value swang in the range of above 50% in few days. I could not hold it any more. Finally I sold with some good profit.

A diversified portfolio:
It has more cons than pros.
Suppose some stocks of your portfolio gave best returns, few others will definitely give worst returns. Finally return of your entire portfolio never beat the index (atleast).

So depending on my personal experience i chose the method and portfolio which is suitable to a common man.

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8

I am not sure, this is just a idea.

  1. capital saving and getting constant returns, Use good mutual funds and keep averaging rgular basis to get good returns.
  2. If you think, any stock will do outperform like multibagger just add that stock in Dmat account.

Thanks

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9

We are all going through the troubles to be able to beat MFs, ETFs, Indices, FDs etc. I believe it is possible.

10

yes, I have been doing sip in MF also…

11

if you are expecting annual growth rate of funds 14 to 24%, then mutual funds SIP are best.But add rare opportunity stocks to your DMAT account.(If you believe on any company). good luck.

12

Thank you… I have been adding only those companies whose pricing power is increasing along with other fundamentals and it must be performing one among others (in terms cmp). This is to increase return from my shares portfolio.

14

I have finally removed all low conviction stocks and choose only 3 high conviction stocks.
Page, brittania, ttk prestige. If the conviction changes i may change my portfolio.

Rationale: fundamentals are improving.
Almost all other businesses are saturated. I.e. limited growth.
All the above three picks are strong companies. I.e. low risk.

Advanced enzymes is loosing its pricing power.
Dmart- few key fundamentals are decreasing. So we may have some more years to come back.
Dixon, amber and sis - opm is low. So it might take some years to start performing.
Havels etc.-there is no continuous increase in sales.

1 Like
15

can you please highlight what are theh key declining fundamentals for Dmart?