Subashnayak_1983's portfolio


(N Sood) #61

you are not alone.. I guess 95% retail investors have sold 95% of their holdings and booked houses. Nobody is discussing stocks in offices anymore.. all rates being discussed are in sq feet wink

So what did Lynch have to say about this ?


(Raj Panda) #62

Congrats Subash,

One big problem with buying property is it tighten's the liquidity position beyond our calculation, more so if it's under construction. Wish you good luck!!

Hope you have done duediligencefitting for the amount involved smile


(Subash Nayak) #63

Exactly, no one discuss stocks at office these days, all rates that are discussed is in terms of sq feet, their appreciation, and their future targets.

This is what Peter Lynch has told about buying a house; makes perfect sense to me.

http://watchyourwallet.blogspot.in/2006/12/peter-lynchs-one-up-on-wall-street.html

1) _Do I own a house? _Lynch suggests that you buy a house before you invest your money in the stock market because, "in 99 cases out of 100, a house will be a money-maker." The way he sees it, a house is rigged in your favor. You can acquire one for 20% down (without having to make the cash call like you would with a stock bought on margin), the leverage you use increases your returns, and the interest on the loan is tax deductible. In addition, people generally do more research when they buy a home than when they buy a stock, which further increases the chances that the investment will turn out well.

;))


(HG) #64

Also depends on whether you bought the house for investment or self use. I think Lynch was talking about buying for self use - the great American dream is to own a house.


(Subash Nayak) #65

Thanks Raj,

100% agree with you regarding liquidity issue. Liquidity was the only reason which was putting me off from buying a house for a long time. As per my calculation I shouldn't be hitting any liquidity issue in near future (that is the hope part), but I can't be 100% sure.

Few of my friend, who have bought a home, actually maintain a excel spreadsheet with cash flow position for next 6 month, just to gauge their liquidity positions. I am yet to create one, but I will be needing the same very soon.

Regards,

-Subash

duediligencefitting :))


(Subash Nayak) #66

Hi HG,

Pretty much everyone buy his first house for self use only, it is just happens that most of them are sold when suitable opportunity arrives (mostly because of improved affordability, and increased income level) to move to next level smile . This is upward mobility effect.

By the way, I don't think the great american dream and average indian middle class dreams are much different. It all revolves around a nice home, stable job, good schooling for kids, and a peaceful retirement. (as they say, 6 figure salary, 5 day work week, 4 wheeler, 3 BHK home, 2 nice kids, and 1 sweet wife :))


(Rudra Chowdhury) #67

Good decision Subash smile

Best wishes for your new house.


(Ayush Mittal) #68

Congrats, Subash. All the best wishes.


(Vivek Gautam) #69

Bahut badhiya Subhash. Good step at such a young age


(Atul Garg) #70

Congratulations for the new house Subash !!


(PRASAD V. K.) #71

congratulations subhash for buying house. I would like to know how much effective CAGR you made in equities post tax because I saw a lot of churning in your portfolio. If you had kept that money in just FDS you would have got about 7% absolute returns post tax.

Thanks


(Subash Nayak) #72

Thanks Rudra, Ayush, Vivekji, Atul, Prasad VK for your kind words.

Prasadji, I would rather not like to tell the absolute number, for the sake of privacy and valuepickr term and conditions. But be assured, following valuepickr senior's picks of Hitesh bhai, Donald, Hemant, Ayushji can give you post-tax, post-brokerage gain many order magnitude of 7% of a FD.


(PRASAD V. K.) #73

Subhash I had put this question to you because I went through your portfolio thread and Rudra portfolio thread and found very sudden,abrupt,unexplained,churning of portfolio in both of them. I just wanted to know is it because of certain strategy you are following or that was because of change in investment philosophy. And if that was out of a strategy how effective that was benchmarked against conventional FD or pure nifty. If this violates forum norms I am very sorry for the same.

I have been in similar phase (a lot of churning) in 2006 to 2011 phase and when I did a unbiased audit of my investments and returns (post tax) I was surprised that inspite of having so many good returns exits my overall returns were pathetic.Because portfoio weightage for gains was very less compared to losses. Then I changed my policy and within last two years have been able to effectively compound at 30%.

Regards


(Subash Nayak) #74

Hi Prasad,

You have raised a valid point. Myself having just one year investment experience, I used to have very less conviction in stocks. So I used to have lots of switch between stocks.

Off late, I have started reading good investment related books, developing conviction in stocks, which has reduced the trading frequency quite low for my core portfolio (Mayur, Hawkins, Astral, Kaveri, Ajanta, Unichem, Granules, Cera); and then came the mega sale smile

Besides around 10% of portfolio is allocated for newer stocks/idea which might click/fail (like sequent, GRUH, Aarti drugs, La Opala). Having strict stop loss for these saves me from cochin minerals like fall, in the cost of more trading on these marginal bets. Also whenever I find some stocks really good, I sell the marginal ones to finance the better stocks/idea.

So my portfolio churning is mostly on the peripheral portfolio, that too with a strict stop loss. The overall gain on these might be ~0%, but I have developed conviction in stocks like Granules, Dishman, La Opala much before the crowd, found good entry points and these stocks moved to core portfolio.

I do track my portfolio return on a daily basis, but the issue is I use little bit of leverage (cheap company loan, deductible as EMI from salary slip), so that inflates my return. Plus my big time betting in pharma stocks during pharma bull run has given me real good boost to my portfolio. So my current gain % has so many special portion embedded in it. No point bothering about it.


(narendra ) #75

Hi Subash and others

Do we need stop loss for our investment portfolios ( I know people follow this stricktly in trading).

I have lost almost entire money ( 80%) in some stocks before , may be this strategy will help.At same time I have seen some stocks recovered after crashes.


(Subash Nayak) #76

Hi Narendra,

I don't know whether this is a smart strategy or not, but I hate losing money the most. So I do have very strict stop loss unless there is a solid investment rational behind it (this the catch). I also hate stagnant stocks, which I don't have much conviction. I have missed many nice opportunity because of this (Divis Lab, Anjaneya Lifecare, Thangamyl, Atul auto). But I have saved myself from crash of cochin minerals, and many more because of this. I have trained my mind to get above the price fixation and buy stocks at 120 even if I have sold it at 100 if it starts rising again, because of any good reason.

On the other hand, if I have conviction in stocks, I usually buy on decline of share price, to reduce my average buying price.

I know this is not an optimal strategy, but I seems to work for me, especially when dealing with stocks having ROE, ROCE 20+, low DE and PEG ratio less than one.


(hemant gupta) #77

hi subash,

congratulations for the house mate. first one is always special(i am assuming this is the first one).


(Hitesh Patel) #78

subash

congratulations on the house. Always a great idea to buy a house if it is your first. Lynch also as you mentioned earlier endorsed the idea and with good logic.

hitesh.


(Vinod MS) #79

Hi Subash,

Great decision to use your leverage and aquire a house. Congrats!

Itsmakes senseto have atleast one home-loan which is availabe at a cheap rate of around 6-8% post tax benefit. Actally the second home gives even higher tax benefit owing to full deduction of interest. So while you are working make great use of your credit capacity.

Cheers

Vinod


(Subash Nayak) #80

Thank Hitesh bhai, Hemant, and Vinod for your encouraging words.

Vinodji,

Thanks for reminding me the the tax benefits of a housing loan :). Haven't thought in that direction when taking my decision. Now I read about the various sections of income tax for the same. Seems buying a house is a real good deal.