My portfolio: inviting comments


(chets) #21

Hi @ramanhp

Thank you for your comments. I am relatively new into investing so I won’t be able to guide wrt the price action for these stocks in next 3-4 years. However I can explain my rationale for holding these businesses:

1.PEL: Good leadership, excellent growth rate of the financial lending business. Medium term triggers are getting a housing finance lending and value unlocking due to demerger of finance,pharma and DRG business. Key monitor would be quality of loan book and NPA ratios. Since sector tailwinds are positive, the PE ratio may continue to be on higher side however point to note is that the loan book is usually tested during bad times.
2. Shree Pushkar: good transparent management, focussed expansions to move to higher margin products,no debt, 30% growth rate, 0 waste. Volatility of product prices may have effect on the stock price, but largely management wants to build a sustainable business model which is key.

Regarding run up in prices, almost all stocks are running nowadays, once needs to keep an eye on results and news related to stocks and make use of dips to accumulate. But firstly you need to build conviction and believe in the stock story.

Hope this helps you!


(Saurabh Maheshwari) #22

While you do have some quality stocks, your turnover is very high for a long term portfolio. You will end up regretting that you sold a few stocks a bit too soon. For example I would have not sold Canfin Homes so soon. This is a bull market after all. You sell when you have something really better.

If you like identifying short term bets, I would advise following portfolio distribution:
A: 50% - Growth stocks (20-25% CAGR) with low risk for a 3-5 year horizon. For eg. housing finance
B: 25% - Short term (~1 Year) bets for 50-100% returns. Usually in cyclicals and undervalued stocks. For example metals
C: 25% - Moonshots - 20x+ in 10 years. Let me know if you find any :slight_smile:

Looking at above framework, I would never buy HDFC. It is neither A nor B. If yo want more exposure in housing finance you can buy Dewan or Repco for example. Additionally, the key risk housing finance faces is increased competition from banks and I see you don’t have any. Try adding at least 1 good private sector bank from the likes of Kotak, Yes, IndusInd, RBL, DCB. Again no HDFC Bank.


(chets) #23

@Saurabh_Maheshwari thank you for your inputs.

When to exit a stock is a very difficult decision. However once conviction is tested, I do it. In case of canfin, it ran up too fast (but I agree that this is a bull market and I could have left it as it is).

I am generally wary of cyclical stocks as that require a very good understanding of the sector and the cycle, which I lack. Hence I have not invested in the following sectors: metals, sugar, real estate companies, cement companies, infra companies.
However I intend to slowly increase my understanding and knowledge of how cycles play out.

I would want to carry Piramal, Canfin, Bajaj Finance, Balmer Lawrie, Dmart and Wimplast for long term.
Shree Pushkar, Suzlon and Sanghvi Movers are more of medium term bets (1-2 years). However my stance could change depending on their performance QoQ.

Let me study the banks you have listed.
Again… thanks for the guidance, it helps new investors like us a lot.


(chets) #24

Updates:

I am now maintaining 2 portfolios as mentioned in my last update. Here is a snapshot of both:

Lessons learnt:

  1. Conviction pays: Exited Suzlon and Sanghvi Movers with marginal gains. The reason for the exit is due to flow of multiple negative news items during Q1, I started losing conviction.
  2. Read an article which said, during any bull run, do not sell stocks if they are expensive, stick with winners. So increased allocation in Bajaj Finance, Piramal, Shree Pushkar, CanFin, Balmer Lawrie. These are my core stocks.
  3. Created the second portfolio.
  4. Portfolios need some re juggling overall as I have high exposure to few stocks now. Not comfortable with any single stock being more than 20% of overall allocation. Will try to rebalance in next few months.

Overall money allocation:

  1. MFs: 50%
  2. Stocks: 40%
  3. Cash : 10%

Still learning. Thank you to usual suspects: @Mehnazfatima, @Yogesh_s, @ayushmit, @hitesh2710, @T11, @bheeshma, @Mridul and a lot of other folks.


(chets) #25

Here is how the combined portfolio looks today after some re balancing:

image


([email protected]) #26


4x sales prediction in 5 years---- if sales 3x then also good re rating will take place Your views Sir


(chets) #27

@dnj14773
For me, balmer lawrie is a hold for long long term. It is a high dividend defensive play and now with growth coming, it should perform even better.
This is a buy and forget kind of stock.
However being a government company, they are not very aggressive and hence 4x seems over optimistic.


([email protected]) #28

Yes agreed even 3x looks hyperbole to me…I am holding since past few years and even added more at 257 today for long term


(chets) #29

Added balkrishna industries to the portfolio in the last week…no other changes in the last 8 months…
Wait and watch mode as of now


(chets) #30

Its been a good time after a long time :slight_smile:

I have loaded up on selected stocks due to attractive prices and here is the portfolio as of today in the order of weights:

  1. Piramal Enterprises
  2. Bajaj Finance
  3. Natco Pharma
  4. Avenue Super markets
  5. NESCO
  6. Balkrishna Industries
  7. Oriental Carbon
  8. Balmer Lawrie
  9. Shree Pushkar
  10. Shivalik Bimetal Controls.
  11. PI industries
  12. ONGC
  13. Wimplast
  14. Shilpa
  15. HDFC AMC

I sold off significant part of my mutual fund portfolio in August and started reinvesting four times the monthly amount in SIP mode again from September.

Still sitting with significant cash to deploy in equities over the next few quarters.