Navneet's Portfolio


(Gursimran Oberoi) #1

Hi VP Board,

I have been investing in small amounts since 2014 and had reasonable success during the bull period.

I made avg 70%CAGR for 2014-2016 on a very small 2lc portfolio (all small and midcaps) which was basically a pure value play on small and midcap stocks and offloaded my holdings completely around demonetization since I needed money for my wedding.

After squaring off my holdings, I had a hard time pulling the trigger again due to absence of the same type of valuations and limited time for research.( It was easier back then to find undervalued stocks and end up with smart returns and I do not have enough knowledge to analyze growth stocks and identify multibaggers)

I consider myself as a high risk investor, but I feel that the strategy I am presenting is a very conservative one. I need your guidance to identify If we can do the portfolio in a better way.
I am targeting 1L/m of investment towards Equities.

I have made the following strategy to re-enter the market with the view to have some core holdings in which we do SIP and save the remaining money as gunpowder for when the market throws us a sweet deal.

Following is my strategy in detail :

  • Monthly 50K towards direct equity.
  • Monthly 60K Sip ongoing (Axis Focus 25, Reliance Hybrid,Mirae Emerging Bluechip, PPFAS)

DIRECT EQUITY

  • I am thinking to allocate 50% of the direct equity allocation(25K/m) towards the following stocks in the ratio below with a long term view of atleast 5-10 years.

  • If there is no value buy available, the remaining 25K goes into liquid fund/FD as gunpowder.

  • I am trying to have 1 steady compounder each from the sectors which I think will remain favorable and in line with the Indian growth story and without drastically downgrading their ROE objectives.

  • I have not cared much for Intrinsic value calculations in these stocks since the SIP in these stocks will be for a minimum period of 5 years.

Allocation - equal % in all

  1. Reliance

  2. SunPharma

  3. Marico

  4. Bajaj Finance

  5. Thomas Cook

  6. LnT

  7. Adani Ports

  8. HDFC Bank

Queries -

  1. I am looking to add one stock from IT sector but am having a hard time coming up with shortlist. Any help and suggestions would be great.

  2. Would you rather have Piramal instead of Sunpharma? Or any other better candidates for this sector?

  3. To play the electric vehicle space, do I look at automakers directly or battery companies etc.

  4. Comments on overall selection of companies?

Mutual Funds

We have ongoing SIPs of 15k each in Axis Focus 25, Reliance Hybrid,Mirae Emerging Bluechip, PPFAS.

I am willing to trim these SIPs and have more in cash

Thanks in advance!


(Gurjot) #3

I understand a lot of people have done well during this time frame so just out of curiosity I wanted to compare this 70% CAGR returns over 2014-16 (till Oct 2016) with the mid-cap and small-cap index returns.

The BSE Small-Cap index is up around 105% which is a ~28% CAGR
The Nifty 100 Mid-Cap index is up around 101% which is ~27% CAGR

Now you’ve smashed both the Mid and Small cap indices with a 70% CAGR over a 3 year period - which is not a small time frame in my opinion. And even during this time frame I can name hundreds of small and mid caps which have not made the investors great money.

Given your stupendous outperformance and reasonably decent stock picking skills - I’m really surprised why you want to re-enter the markets with a proposed 50% allocation towards the large caps.


(Gursimran Oberoi) #4

Very true gurjota,

The high allocation currently is due to 3 things :

  1. At that point of time, I had a lot more time and a lot more conviction behind my bets and a lot lower budget. As I moved into a much much busier job, It lately became a lot difficult to even track the topics on vp and my portfolio/watchlist stocks. I personally feel rusty with such a job.

  2. The fact of the matter is that I am pretty comfortable allocating a part of my overall portfolio knowing that I can do without missing a few of their quarterly earnings reports. 50% felt like a good place to start.

  3. I still feel the markets have some way to go till I find the kind of valuations Im comfortable investing but im not averse to trimming the SIPs and having more in cash in case that happens. After all it still is my first ever bull run and Im still figuring out what works and what doesnt for me.

One last thing, back of the mind, I still feel the stocks I picked during the outperformance phase tapered out in the next two years, so maybe I was lucky to exit at those numbers. I feel there is a lot to learn for me wrt the investment thesis behind a stock and the mental strength it takes to hold them through thick and thin.

This time around with the index still at 24 odd p/e, marks another round of learning for me and how to invest at these valuations. I just wanted to be safe than sorry.

Views invited


(Gursimran Oberoi) #5

Thanks for the detailed response.

I surely missed the agro tech foods and loved your inputs on the EV space.

Will have to look into 3M in more details


(hari_) #6

i think you shouldnt invest in 3M India, they dont pay dividends. I would recommend you to look at Wendt India or Carborundum universal,part of the great Murugappa conglomerate


(Matt1985) #7

I am not commenting on whether to buy 3M or not. However, one should not decide your stocks (i would call as business as we are shareholders of the underlying assets / operations) based on dividend yield.

Once the Company has paid the dividends, the price of the stocks would reflect the amount of dividend paid. That is why in certain business literature, you can see the phrase ex-dividend price or X company will trade ex-dividend today. So can’t find any reason to select stocks / business based on dividend payout. Hope it helps