ValuePickr Forum

My Portfolio_Homemaker

(Marathondreams) #256

I would say you are lucky that you have stocks which balance each other out. This is purely due to your diversification. In last 3 months, concentrated portfolios from the storied investors are also down between 10-30%. That’s the nature of the market. Such times make one believe the true meaning of famous words of John Maynard Keynes ‘Market can remain irrational longer than you can remain solvent’

I believe you have good stocks, maybe bit more for my liking. You may want to prune that a bit…(average out). It is difficult to decide what is good entry price as “good” or “bad” is always decided with hindsight. So one never knows while buying. This is the time to “wait”. Only problem is nobody know how long?

1 Like
(dumboinvestor) #257

this should be your portfolio based on your picks.

  1. Page
  2. Ashok Leyland
  3. HDFC Life
  4. Abbott
  5. 3M
  6. HDFC Bank
  7. HDFC
  8. Bajaj Finance
  9. Pidilite
  10. Asian Paints
  11. HUL (you have GSK already so that should be fine)
  12. ITC
  13. Nestle
  14. HDFC AMC
  15. LTTS (already holding)

I have added a few more cos based on your investing style. Since you dont mind sacrificing returns for 2-3-4 years due to high valuations. Based on that I have removed companies that arent the pedigree of nestle, asian etc:
If you take valuation risk on such companies then you are effectively taking a risk and forgoing returns since it is mostly discounted. In companies like Nestle etc even if you are wrong on valutions, no issues. Simply hold on and wait.

You can keep 10% for trading/opportunistic bets if you want.

12 Likes
(Investor_No_1) #258

Above looks a nice portfolio. @dumboinvestor appreciate the simplicity and clarity of ur thought in prunning!

(Matt1985) #259

This initiative is really appreciated dumboinvestor. In certain cases, handholding may required for new investors specifically who hasn’t seen the 2008 / 2009 carnage or who are new to the market. The above is a general comment and not intended against homemaker. In fact, I really appreciate her learning process as we are all here to learn.

I just wanted to add that all these stocks / picks suggested by dumboinvestor are solid names with strong parentage. When an investor is putting his / her hard earned money, just pause for a moment and try to think like a private equity guy what would one get by putting the money into this company. As we are not private equity guys, we can’t forsee 5x - 10x kind of return or cannot undertake all the rigorous risk factors they would consider; but if your investment can guarantee sound sleep at night, that should be enough for an individual investor / shareholder. Another test would be to make sure that whoever runs the business of the company you hold, still the business would do well.

While there are 15 stocks, depending upon the risk profile, one can invest in 6 / 8 / 10 most high conviction stocks. I would say the key is to select the most conviction stocks based on one’s analysis / circle of competence (no need to put money in all these 15 names unless you want a fairly diversified portfolio with 15 stocks). One can also take a few bets in small / midcaps stocks which could do extremely well. This is the approach I am following for the past few years in the market. See the returns Vinati Organics has generated in the last 3 years (whopping 333%…!) So, in hindsight all looks fine and if one can’t find such kind of names early, just SIP in names from the above list.

Coming specifically to the stocks, majority of them are really sound names which would qualify for ‘buy and hold’ at least for the next 10 years. Personally, I would disagree on one name, i.e. Ashok Leyland. I won’t invest in Ashok Leyland but would consider names such as Kotak Bank if one wants more weightage in financials or Bata in the consumption space (probably not at this price level but after a meaningful correction) or may look into Honeywell Automation, the Indian subsidiary of NASDAQ listed Honeywell International.

We are all familiar with Kotak bank and the returns it has generated over the decades. Also note that the AMC / broking business are not listed at the moment. Uday Kotak is under pressure to reduce his stake in Kotak bank and this could be an overhang at the moment. Otherwise, it looks solid as a rock. Similarly, there is no need for an introduction on Bata, how they changed themselves and become the leading player. See the products they have recently launched in women wear / athleisure. See how they are protecting the customer base and pricing strategy thus not losing to Sketchers (whose products are known for comfort at a higher price band). Regarding Honeywell, I came across a few articles and based on my quick look, it looks like a solid bet with good parentage. Note that Honeywell US has been in business for more than 100 years and if Honeywell India can provide all the technologies / products of the parent in India, then that would be fantastic. As I am not techie nor an engineer, slowly grasping the business at the moment. Anybody, who has looked into Honeywell or whoever has the circle of competence into Honeywell’s business, please share your thoughts.

Interview by Honeywell India, MD in 2018

Disclosure - Holds a few stocks from the above list. Also, I am conscious of the fact that Ashok Leyland might have been included in the list by dumboinvestor just because Homemaker currently holds it.

4 Likes
#260

Kotak, Bata and Honeywell sounds interesting. Kotak is better choice than indusind which I hold. Bata is a classic consumption stock and a super brand. Honeywell is US MNC, with recent great deals on smart cities projects.

Aside to what dumboinvestor has shared is simple, impacting and good.

All said and done, I should look beyond stock picking. Its no doubt very important but is one of the many elements of investment. Equal focus should be on operation and maintenance of the portfolio…however, I wonder whether activity will add any value especially in the current market situation.

(Chandrasekar) #261

I don’t like Maruti due to it’s nature of business. Overall, these car companies not make more than in single digits (if at all it’s profitable). Also, I’m in O&G for my daily bread - with all conviction feeling that a disruption is in cards. If i were you, i will come out of Maruti (I’m holding Maruti, waiting for an exit price, looking for a bigger fool). Any MNC is good due to their governance.

#262

Any one tracking Honeywell Automation.…Very impressive rise in profits. However price has gone up significantly. Welcome thoughts on valuation @ PE 56

Source Screener…

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(s) #263

Marginally overvalued for now but all business lines are looking bullish. Good investment for coming 5 years and a long term hold for portfolio.

(Vijay) #264

When did MSIL make a loss? In fact it has been very consistent in making double digits PAT growth. Cash making and negative days in working capital. The platforms they use have a payback period of less than 3 years making them the fastest company to break even. Also they milk some platforms for decades which is unheard of in any car company. Did you know how Omni and wagon R had paid back? They milked their customers far too long than any car company had done. However platform lifetime has reduced now but Maruti still has the quickest payback period. Heatect platform had been so widely deployed and has already broken even. All these makes it a cash spinner rather than capex heavy. If you look at capex in the last 10 years, it is clear that they just need 2 quarter earnings to meet their 1.5 year capex. No other Auto company is able to do that. Their Capex (NFA+WIP change+Dep) was 26k crores in the last 10 years. The FCF to capex is 1.7 times. FCF to CFO is 43%. Their SGR is at 20% and they can easily remain debt free even with such high double digit growth.

Revenue CAGR (%)

  • 10 Years 14.58
  • 5 Years 12.74
  • 3 Years 11.50

EBITDA CAGR (%)

  • 10 Years 23.70
  • 5 Years 18.35
  • 3 Years 6.27

PAT CAGR (%)

  • 10 Years 20.28
  • 5 Years 22.64
  • 3 Years 12.91
13 Likes
#265

Hi VP,

Its been quite a while since my last post. Infact I don’t check portfolio regularly. Somewhere I found enormous peace in inactivity. I was rather involved more in border tensions, Elections and everything other than investing. :grinning:

To my surprise without doing much, my portfolio is nearly 3 % up. Its in line with major indices. Detailed portfolio update will share shortly.

What is indeed interesting, is the benefit of picking quality stocks. Not getting into all the intricacies of quality investing, but what it did for me atleast is, takes emotion out of investing. Quality stocks may go down or up basis market, indices, sentiments, over valuation or momentary poor quarter. But it doesnot cause unnecessary panic or emotional turmoil and thus premature buy sell calls. Views of fellow boarders welcome.

6 Likes
(wing777) #266

Yes,indeed.As they say,quality never goes out of fashion.Just as class scores over crass,so quality in the long run scores over trash. Quality is the “Lambhi dorh ka ghora !”
In the ET March 4 edition, in an interesting article"Alpha hard to find,Funds stay Focused", the emphasis on quality stocks and good governance,by Angel Broking fund managers, has been highlighted.

1 Like
(777) #267

That’s great to hear and it’s also a time to book some profits In my honest opinion.

#268

Portfolio update: Portfolio is up as major indices are moving up. Returns in sync with Sensex/Nifty but lesser than Midcap indices. Top performers are Bajaj Finance & Yes Bank, a clear example of Quality & Value buy. Top Laggards are Sterlite & Ashok Leyland- a clear case of caught up in a cyclical. However the ranks change frequently, barring few predictable performers / non performers. No Buy/Sell as I am inclined towards holding. May look for some buys in midcap/small cap but each less than max 3% of portfolio. Kind of POC- Trial approach. Feedback welcome !

S.NO Company Name Profit/Loss % Weightage %
1 INFOSYS LTD 14% 8%
2 L&T TECHNOLOGIES LIMITED 1% 8%
3 MARUTI SUZUKI INDIA LTD -1% 7%
4 PAGE INDUSTRIES LTD -10% 6%
5 PIDILITE INDUSTRIES LTD 20% 6%
6 3M INDIA LIMITED 14% 6%
7 YES BANK LIMITED 44% 6%
8 BAJAJ FINANCE LIMITED 49% 5%
9 INDUSIND BANK LIMITED 16% 4%
10 AVANTI FEEDS LTD 9% 4%
11 HOUSING DEVELOPMENT FINANCE CO 14% 4%
12 ABBOTT INDIA LIMITED -8% 4%
13 GLAXOSMITHKLINE CONSUMER HEALT -1% 4%
14 HDFC LIFE INSURANCE COM LTD -3% 4%
15 GRUH FINANCE LIMITED -8% 4%
16 ASHOK LEYLAND LTD -16% 3%
17 KENNAMETAL INDIA LIMTIED -1% 3%
18 BRITANNIA INDUSTRIES LTD 9% 3%
19 HDFC BANK LIMITED 10% 3%
20 MERCK LIMITED 24% 3%
21 STERLITE TECHNOLOGIES LIMITED -32% 3%
22 GMM PFAUDLER LTD -3% 2%
NA OVERALL PORTFOLIO 6% 100%
4 Likes
(Dragon) #269

Portfolio is stellar and it will do really well over a long period of time. However, I wish you would trim some names and bring the number of stocks under 17…

All the best :blush:

(prabhatg1) #270

I have abbott in my portfolio wanted to know your view about its valuation is it justified to give such a high pe because a high pe stock is benifical only if there is comfort in his topline for next 3 -4 years i understand they are planing to launch 100 new api but wanted to check your thesis

#271

My thesis is same as yours. New launch or new introduction of battery of new products, less dependence on US FDA norms and being an MNC are plausible reasons for high PE.

#272

I dont know which ones to sell. Should I sell the losers or the winners. Todays loser becomes tomorrow’s winner and vice versa.

I read somewhere, selling is an art of investing and is more difficult than stock picking :grinning:

(Mahendra243) #273

This is what warren told to Peter lynch

Selling your winners and holding your losers is like cutting the flowers and watering the weeds

(Dinesh Sairam) #274

Actually, no. Peter Lynch first used this sentence in his book. Warren Buffett called Peter Lynch (That was the very first time Buffett talked to Lynch) to ask his permission to use his quote in his speeches or Annual Letters.

7 Likes
(Mahendra243) #275

Correct…but what my intention is never sell your winners and lap onto the losers in PF…
This is what happened next when
Lynch said he mistakenly sold his stocks in Home Depot and Dunkin’ Donuts too early because they would have soon grown over fiftyfold.