This is the biggest major correction in this 3 yr bull market. Index is down 15 % from peak. Technically 20 % fall can take it to bear phase ( as they say). At VP we generally don’t (should not) care about index level and focus on stock specific stories. As @hitesh2710 recently said market is always good for the one who is prepared and patient. Also psychologically correction is best time for PF rebalancing as switching is easier.
Some of us can take this correction as an opportunity to get into stocks we always wanted to buy and get rid of our weaker stocks. Some may not do anything as they say not doing anything is the best thing to do.Also it can be a good time to rebalance PF wrt PF allocation framework shared by @Donald i.e most undervalued and highest conviction should max allocation etc ( refer that thread).
I generally have a very concentrated PF having Ajanta, Can fin, Repco, Kitex, Cap first. During this correction I am nibbling in at lower levels Torrent Pharma and Avanti Feeds after their fantastic Q1, with limited downside in FY16. I am reducing Cap first during to prolonged slowdown in real state and LAP etc. At this time it can be a good strategy to have a very diversified PF for preserving the gains.
It would be interesting to know what others are watching buying.
It can make one prepared in case Index dips significantly from this level to buy from real good bargains, Also cash calls can be taken accordingly in counter rallies.
I dont know this is the right strategy or not, or sitting quite for this phase can be a better strategy for patient ones
I am also watching Shilpa, Indocount, welspun, nitin, Alembic pharma, kaveri etc for any dips to be considered as a buy.
What is your watch/buy list
Any pointers/strategy/put buying for
I have a concentrated portfolio with top 3 stocks making up 82% of the portfolio. In the last 3 months I have been reducing Hawkins Cooker and finally sold it all on the day sensex crashed 6%. Replaced it with Kitex and Ajanta Pharma. Idea is to keep nibbling Ajanta Pharma every now and then and add more to Kitex post Q2 results. Have been tracking MT Educare and Shriram Transport Finance as well but have not bought them yet.
I have a diversified portfolio of 18 stocks. Highest % of 9 to 10 in ajanta and Avanti and least in Symphony of 3%. About 6 months back Symphony was the highest. As a habit I have always booked profit after 1 year of holding(due to tax concerns) and invested in other conviction ideas which have less exposure like Atul, Vinati,CARE and Suven. Exited kaveri, Atul auto. Kesar terminals, TV today network, Ashiana housing, Vmart etc. I usually exit when the % goes below 3% even if it is a good stock and wait for reentry. I don’t know whether this is a good approach. I could take a hit of 10% in the present correction. I am watching Cyient and Ashiana for reentry. I am always fully invested even though I would like to be otherwise.
I have been tracking & have started nibbling Godfrey Philips around 550
levels, they have diversified into seven eleven types of stores, called as
24x7 stores, into pan masala ( Pan Vilas), confectioneries , high quality
tea and their original business of tobacco
Comments and inputs/ insights awaited from all the learned people of our
forum
I hold a tight PF of 8 stocks. I did some churning during the last 10 days or so. I/m much more happy that this correction is happening and hoping for much deeper cuts.
Exited: MPS Ltd
Reduced: Ashiana Housing
Increased Stake: Thomas Cook, GRUH, Shilpa Medicare and Symphony
Bought fresh: Eicher Motors
No Change: Ajanta Pharma and Avanti Feeds
Looking at: CRISIL, Sundaram Finance and Page Industries.
This correction was an excellent opportunity for me to rebalance my PF. My allocation towards Pharma earlier was on the lower side. I used this correction to add more of Ajanta, Shilpa, Aurobindo & Alembic. I already own Torrent. (I follow a basket approach when it comes to Pharma, as each of these names specialize in a particular segment).
Shilpa is an SIP candidate for me. I buy more when there is a correction and nibble when it is at the higher levels.
Sold off Amararaja & other names where my allocation was less than 3% in the recent rally.
I stocked up Avanti, Indusind, Treehouse, CCL, Bajaj finance, & MPS at lower levels.
I am looking at adding more of Avanti, & Kaveri if there is further correction. Looking to add PI & one of GRUH or Repco to my PF. Have invested 50% of my investible cash and will add more only if I get my buy levels.
I have other tracking/trading positions.
Thanks,
Ravi S
Disc - Please do your due diligence.
I have a very large and diversified portfolio and always confused to exit which counter because most of the stocks I have has been inherited and I don’t wish to sell.
But I sold my all holding in Reliance group ( both Ambani’s, they ruin the wealth of shareholder in last 8 years ) which I had since inception.
Also exited PSU’s like REC,PFC
Also exited commodity stocks like Tata steel, JSPL ( not sold at 770 and sold at 245 still lucky ),sesa sterlite.
I have following stocks
TCS
Sun pharma
HDFC
HDFC Bank
Kotak Bank
Thomas cook ( very confident on prem watsa )
Kitex garments ( very bullish )
Ambika cotton
Pokarna
Mold tek packaging
Intellect design arena
Shilpa medicare ( very small quantity wanna to increase significant )
Bajaj finance
Motherson sumi
Eicher motors
Page Industries
Bharat forge
Gruh finance ( very bullish )
Ashiana housing
Poddar developers
Shriram transport finance
Asian paints ( small quantity )
Aurobindo pharma
Avanti feeds
Bosch
Century plyboards
DCB bank
ICICI bank
L&T
Mayur uniquoters
Oriental carbon ( bullish )
PTC india financial
Premco global
SBI
Suven life sciences ( very optimistic )
Tech Mahindra
Tata Motors ( DVR )
United Spirits ( SIP and extremely bullish )
NIIT Wish list:
Shilpa medicare
PI Industries
Please don’t laugh at my portfolio being too diversified.But I actually don’t understand the capital allocation frankly spealking.
I am to reshuffle my PF if someones guides me. Also most blue chips I am having has been since inception and recieved as inheritance so reluctant to sell my winners.
Views very much invited to organise the PF from seasoned investors.
I have no meaningful cash. Fully invested and haven’t sold on any of the rallies. Pharma is 65-70% of the PF (shilpa, granules, shasun, torrent and alembic pharma - each between 10-18%) and others include Yes Bank, ambika cotton, HGS, jk bank, small portion (~2% each) in kitex and kaveri.
( I had Thankfully closed my BTST position on yes bank at profit of 25/- per share at arnd 836/- just before the epic fall came)
If I had cash right now, I would have bought yes bank, ajanta Pharma and maybe oriental carbon and ambika cotton too.
Even this loss-period has been a learning curve and will help for the future.
This is getting really collaborative now, so much to learn from each other and their approach toward PF balancing in a big correction. I guess there should be a process for value investors and a defined approach as to how to approach this subject and learnings from previous such phases of market.
The rule is pretty simple but not easy. Major corrections like what we saw a few days back are excellent opportunities to switch stocks in your portfolio. Both good and bad stocks would go down during a panic, while the bad stocks tend to settle there good ones will usually recover. Sometimes the best stock to buy in a correction could the one that you already hold in your portfolio and has performed well in front of your eyes and ticked all the check boxes. Cut your weeds and water your flowers .
I have 40% in cash, and about 28% each in Ajanta Pharma & Ujaas Energy. Have tracking position in couple of stocks. The 40% cash came last week, mainly from selling Suven & Shilpa. Fundamentally I remain bullish as ever on Suven due to the CRAMS play with high margins in CNS & on Shilpa due to high margin oncology business, in addition to the often discussed reasons. After going through this excellent article, I had decided at various points in time that I would sell of when either
Valuation of a stock captures 2 year forward earnings, or
Nifty PE is above 95%ile (this I had planned before reading the fabulous thread above) in a calibrated manner till it reaches 99%ile, or
Both 1. & 2.
As you can imagine, I did not have a fixed policy in mind (across different snapshots in time). Over the last year, my baseline PE for fair (and alarmingly overvalued) PEs has gone higher. Last Monday served as a wakeup bell and now instead of thinking about market tops and bottoms, I am back to my old philosophy of buy low (40% MOS to fair PE, at least 20% even for stability in earnings like GRUH) and sell high (2 year forward PE), but not highest. Sold off Shilpa which captured about 2 years fwd on a conservative basis. I had recently purchased Suven. On hindsight there was no MoS in paying 32 PE for a 30-35% growth company. Learnt my lesson and paid the tuition fees by selling at a loss . Another reason why I didn’t hesitate is that both Shilpa & Suven are expected to have lacklustre performance over next couple of quarters (though I am bullish as ever on medium and long term prospects of both) and bears are not known to have mercy.
Ajanta is not as overvalued as Shilpa, but certainly overvalued. To be frank I don’t know what to do. Will stick with the 2 year fwd formula for selling. In times of currency wars, the diversified (across geographies and currencies) earnings are helping me sleep well.
Ujaas, I might as well hold through a bear market.
To answer the question of this thread, I am not able to find value in good quality companies, so not buying anything.
Excellent write up and I think you are right. but sometimes it becomes difficult to exit your winners but as you said one need to be rational then emotional and also it is very difficult to sit on cash ( atleast for me ).
Great thread started. I have bought MT educare and dish tv in the correction. I feel these two companies do not have anything to do with the markets outside and fundamentally they are a domestic story…so i feel any correction in these two is worth taking a look at.
nice thread . I have been doing nothing for past many months now . I hold a concentrated large size PF of 5 stocks . no cash to invest . so watching the screen reading up but no selling or buying .But no tension .
I think we need to wait for some more time - we are yet to see the bottom. I am also sitting on cash after reducing exposure to polymed and Bajaj finane as part of portfolio rebalance.
Hello people.
A good way to retrospect. I have a portfolio of 18 stocks and effectively no cash as of now. The thing is when the market cracks both stocks ( which we have to sell to get into cash and buy ones) go down. And it’s a mental block selling at lows. However I hold astral which is currently at 70 pe which I feel is discounting revenue growths quite a few years down the line which hence I am planning to partially sell if not fully.
I will be looking to add to few of my existing holdings which include premco, Mt educare and cupid. To all these current holdings the bullish ness can be described in one sentence.
Premco: we will never stop wearing underwear even in recession
Mt educare: would have been a flop in any developed country, but in india parents will keep pushing kids for those magical grades
Cupid: better to safe than sorry. And what better way than for it to be decided by the fairer sex.
Regards
I sold Kaveri Seeds after marginal gains after 3 years. Will add in next few quarters if ground situation improves.
Tracking Orbit Exports( consistent growth QoQ) if it drops further. Premco Global and Paushak already in my PF, will add both of these if they go down from these levels.
and water your flowers 
.
. Another reason why I didn’t hesitate is that both Shilpa & Suven are expected to have lacklustre performance over next couple of quarters (though I am bullish as ever on medium and long term prospects of both) and bears are not known to have mercy.