Oct 2018 Vs Mar 2019: Kind of mirror image. Wish one could predict 
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Buying on dips or averaging down is relatively easy for quality stocks. I found a link explaining in greater detail. Generally stocks rise over time, but if bought on corrections , then can add that extra alpha.
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Markets likes to see the growth and thus value the company accordingly. Till 2015 , the company used to grow its Sales in Double digits while the growth has been slowed down to single digits since 2015. That is more a reason for PE Contraction. It is still not cheap but dividend yield provides a good support on downside.
Management is mostly filled up with old guards who look to be very conservative and less innovative. There is presence of some new generation promoters and there is a hope that new generation promoters will learn from their competitors and will venture into new emerging products and utilize and capture the benefits of their strong Brand and network. Interestingly the growth has slowed down ever since new generation joined in 2015 (May be a coincidence only). Lots of new brands are emerging and it is necessary for them to stay relevant in this changing times with more aggressive marketing and innovating new products which is not the case as of now. Let us see they go from here.
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For clarity of thoughts we have to read and read a lot in fact. The veteran investors who have a few hundred/thousand crore in stocks, dont diversify too much because it is the game of concentration, not over diversification which gives better returns. You may like to check their portfolios. And we can concenterate only if - we have studied the businesses in depth, trust the management, and there are excellent growth options in future.
The standard blue chip companies are already well known to everyone including MFs and their future prospectus are already priced in. Look for the businesses which are less known, on which there is no research report published. This is very tough though, and making money in equity is tough for the same reason. Investing is simple but not at all easy. Please read as much as you can, 10-15 books at least to start with.
Drawbacks of over diversification are average returns which any good MF can give. In that case spending lots of time of self management of stocks make little sense in my opinion.
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@bharat19 very nice write up. I focussed too much on rising profit chart but not on profit growth % chart. I think ROC is important as much as absolute…I am curious to know what qualifies as good dividend yield and protection of downside… Didnot really get the point. 2.3% div yield… Is it good bad ugly…how to know… Is there a benchmark?
Also as per my understanding dividend paying companies have limited price rise… Psu stocks for example… Can you elaborate on this aspect a bit more…
@kush.pawan The debate between Concentrated and diversified Portfolio is never ending. No doubt , a concentrated portfolio may give better returns than diversified but it will have more risk than diversified. One has to be very correct in concentrated portfolio while one have the elasticity of being wrong in few stocks in case of diversified portfolio. One size does not fit all.
It is important to develop one’s own style of investment suited as per risks taking ability and return expectations. Some may have higher risk taking ability or equity may be very low part of their Net worth , so they may go for very concentrated bets. For some , return of capital is more important than return on capital and they need to hold a diversified portfolio.Ultimately it is all about how longer one remains in Markets.
If someone holding more than 25-30 stocks , then MFs looks a better avenue as spending time on individual names makes less sense. One may also start with 25-30 stocks and eventually bring them down to lower numbers. A portfolio of 12-18 stocks in my view is appropriate. Regarding veteran investors , i do not think one has the data of number of stocks they hold. Only greater than 1% of their positions in individual companies are disclosed.
Less known businesses have higher chances of capital erosion than proven ones. It again depend on the risks an individual can take. Some are happy and in peace with holding a portfolio of blue chips with 10-12% CAGR Returns while some have sleepless nights holding lesser known names. Lots of variables are there behind investing and any fixed formula does not exist. What may suit you does not necessarily means it will suit others.
@homemaker : I think , more the stocks we study , more we find companies suitable for investments. It is necessary to buy the best among the list without fearing of missing out on other names. At least there would be 50 companies available as per one’s style of investment but picking the best from that list is a tough task. In the fast changing world , one needs to be a little active and keep on analyzing the portfolio stocks from time to time and should not mind shifting between the Companies rather than buy and forget. Again , it depends on what one expects from the market and how much time one can devote in markets.
@homemaker I do not think there is a benchmark for dividend yield. It depends from companies to companies. The most important aspect would be growth. If the profits are growing and dividends are increasing over the years with future visibility of growth and sustainability of increasing dividends, then dividends at a particular rate can provide support. Otherwise if growth is not there , it can turn into a value trap. My statement was particularly for this company only as i have seen levels of 2800-2900 acting as a good support at yield.of 2.5% !
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True. I have a watch list of top quality 50 mid caps, assembled from VP and other sources. Now simply speaking i can bucketise the 50 into 3 segments…A, B, C basis nearing 52 week high and low as extremes. I plan to focus on top 15 nearing 52 week high and then start filtering, avoiding cyclicals or extremely expensive ones… Let me start some where and present the case for further discussion. Randomly picking names basis FOMO is not helping at all… Thanks for pointer 
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can you kindly share the watch list of top quality 50 mid caps you have?
Whats the reason you prefer Hawkins over TTK prestige ?
I think the main plus is that it is going to be an all-equity deal so no net cash outflow for HUL, plus makes HUL cross britannia in the foods and refreshments segment (revenue-wise). Got this from the article - GSK giving a boost to HUL in an all equity merger!
Latest update on your portfolio.
Latest update- nothing much to cheer about !
YB, STL, ALL, Page has dragged portfolio returns down. While BF, P&G, HDFC gains have ensured that portfolio remains afloat.
It has been a coffee can style till now, without any buy sell. The falling stock weightage has come down so incremental fall doesn’t impact the portfolio in a big way. I hope the winners gain further momentum with its increased weightage.
| S.NO | COMPANY NAME | P/L % | WT % |
|---|---|---|---|
| 1 | L&T TECHNOLOGIES LIMITED | 9% | 8% |
| 2 | INFOSYS LTD | 10% | 8% |
| 3 | BAJAJ FINANCE LIMITED | 84% | 7% |
| 4 | MARUTI SUZUKI INDIA LTD | -6% | 7% |
| 5 | PIDILITE INDUSTRIES LTD | 16% | 6% |
| 6 | 3M INDIA LIMITED | 8% | 6% |
| 7 | PAGE INDUSTRIES LTD | -27% | 5% |
| 8 | HOUSING DEVELOPMENT FINANCE CO | 32% | 5% |
| 9 | HDFC LIFE INSURANCE COM LTD | 22% | 5% |
| 10 | ABBOTT INDIA LIMITED | 12% | 5% |
| 11 | GLAXOSMITHKLINE CONSUMER HEALT | 7% | 4% |
| 12 | GRUH FINANCE LIMITED | -4% | 4% |
| 13 | INDUSIND BANK LIMITED | 0% | 4% |
| 14 | AVANTI FEEDS LTD | -7% | 4% |
| 15 | KENNAMETAL INDIA LIMTIED | 3% | 4% |
| 16 | PROCTER AND GAMBLE HEALTH LTD | 42% | 3% |
| 17 | ASHOK LEYLAND LTD | -20% | 3% |
| 18 | HDFC BANK LIMITED | 17% | 3% |
| 19 | BRITANNIA INDUSTRIES LTD | 0% | 3% |
| 20 | GMM PFAUDLER LTD | 8% | 2% |
| 21 | STERLITE TECHNOLOGIES LIMITED | -46% | 2% |
| 22 | YES BANK LIMITED | -54% | 2% |
| OVERALL PORTFOLIO | 3% | 100% |
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This pf is still better than lot of mutual funds, if you compare last 3 year returns ( both alpha + beta)
Yes Bank, Sterlite, Ashok Leyland are laggards. Corporate governance and cyclical headwinds has wiped out significant value. Portfolio is barely 1% up. No buy- Sell since 10 months.
| Company | Unrealized Gain (%) | Portfolio Weight |
|---|---|---|
| Infosys | 26% | 10% |
| L&T Technology Serv. | 4% | 8% |
| Pidilite Inds. | 33% | 7% |
| Maruti Suzuki | -4% | 7% |
| Bajaj Finance | 70% | 6% |
| HDFC Life Insurance | 40% | 5% |
| 3M India | -2% | 5% |
| Abbott India | 24% | 5% |
| Page Industries | -34% | 5% |
| HDFC | 22% | 4% |
| Glaxo.Cons. Health | 7% | 4% |
| Avanti Feeds | -3% | 4% |
| Procter&Gamble Healt | 45% | 3% |
| Gruh Finance | -14% | 3% |
| Indusind Bank | -9% | 3% |
| Kennametal India | -5% | 3% |
| HDFC Bank | 7% | 3% |
| Britannia Inds | -5% | 3% |
| GMM Pfaudler | 19% | 3% |
| Ashok Leyland | -41% | 2% |
| Sterlite Tech | -55% | 2% |
| Yes Bank | -64% | 2% |
| TOTAL | 1% | 100% |
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Thanks for the updates @homemaker, I have a small position in GMM (1.38% by cost) and Sterlite (8.13% by cost) and none of your good winners. Wish it was the reverse 
I guess your Portfolio weight is by current value, do you also track cost weightage of each company in your portfolio ?
Thanks for the regular updates. I would get out of Avanti, Maruti, Sterlite Tech, Yes Bank and instead buy something like ITC, Godrej Consumer where there is hopefully valuation support. Or maybe increase allocation to existing holdings like 3M. Or add few pharma names. Yes Bank weightage was very high to begin with (11%) and that has led to the below par performance. Also you started with 10 stocks. Maybe Marcellus like consistent performers or Coffee Can / consumer oriented companies suits your style more.
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I agree with your views. And numbers don’t lie.
I am interested in adding few good quality names like ITC, esp where there is valuation support. I mean putting fresh capital
However, with deep losses in sterlite and YB, I am not sure whether exiting so late will add any value. Let it remain, hoping will recover some losses.
My strategy has changed quite a few times along the time, though minor. But somewhere I missed using TSL at 20% fall from High. I could have cut my losses short. But then again I would have missed some good scrips which bounced back. Its tricky choice nevertheless.
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Also market does not have confidence on the promoter of Sterlite Tech as he has history of short changing minority shareholders. So even if OFS growth story is there, better to stay away from such companies.
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Last 2 days, there was a sharp up-move in indices. I exited, Yes Bank, Page Industries for loss and 3M at break even. Portfolio is reduced to 19 stocks from 22. Plan to scan and buy few good large/mid caps.
| S.No | Company Name | Profit/Loss % | Weightage % |
|---|---|---|---|
| 1 | INFOSYS LTD | 18% | 10% |
| 2 | L&T TECHNOLOGIES LIMITED | 1% | 9% |
| 3 | PIDILITE INDUSTRIES LTD | 42% | 8% |
| 4 | MARUTI SUZUKI INDIA LTD | 3% | 8% |
| 5 | BAJAJ FINANCE LIMITED | 97% | 8% |
| 6 | ABBOTT INDIA LIMITED | 35% | 6% |
| 7 | HDFC LIFE INSURANCE COM LTD | 41% | 6% |
| 8 | GLAXOSMITHKLINE CONSUMER HEALT | 21% | 5% |
| 9 | HOUSING DEVELOPMENT FINANCE CO | 26% | 5% |
| 10 | PROCTER AND GAMBLE HEALTH LTD | 59% | 4% |
| 11 | GRUH FINANCE LIMITED | -7% | 4% |
| 12 | INDUSIND BANK LIMITED | 0% | 4% |
| 13 | AVANTI FEEDS LTD | -7% | 4% |
| 14 | HDFC BANK LIMITED | 20% | 4% |
| 15 | KENNAMETAL INDIA LIMTIED | -3% | 4% |
| 16 | BRITANNIA INDUSTRIES LTD | 9% | 4% |
| 17 | ASHOK LEYLAND LTD | -31% | 3% |
| 18 | GMM PFAUDLER LTD | 24% | 3% |
| 19 | STERLITE TECHNOLOGIES LIMITED | -45% | 2% |
| OVERALL PORTFOLIO | 14% | 100% |
What is your reason for exiting 3m? Expected poor performance or reducing number of stocks in portfolio?