Yogesh's blue chip 10 Portfolio


(atul1082) #309

@yogesh Beautiful and crisp presentation.I was reading Mr Damani,'s interview wherein he talks about great ideas, lasting businesses and pricing power of business.With my limited exposure, I find it difficult to connect these.Any insight ?


(atul1082) #310

@yogesh referring to yr last slide of presentation, wherein there r companies like hdfc bank, Britannia, Bajaj finance etc.Most of these companies have become multiple times before they came down 8 to 10% in recent correction.At the end current mkt levels and macros like currency and crude rising, which of these or even outside the presentation list could qualify having pricing power, could b candidate for long term investment .


(atul1082) #311

@yogesh referring to yr last slide of presentation, wherein there r companies like hdfc bank, Britannia, Bajaj finance etc.Most of these companies have become multiple times before they came down 8 to 10% in recent correction.At the current mkt levels and macros like currency and crude rising, which of these or even outside the presentation list could qualify having pricing power, could b candidate for long term investment .
Disclaimer:I HV a small investment in some of them and looking for addition at lower levels


(Yogesh Sane) #312

CGDs like IGL and MGL are regulated utilities rather than natural monopolies. When you change the narrative, your valuation metric changes accordingly. Such utilities are regulated in such a way that these earn an ROE of usually around 15-18% and in some cases upto 20-25% when regulator want the utility to earn extra profit to enable to utility to grow and build long term infrastructure and attract competition in same or other circles. Thus higher profits are expected to get reinvested rather than get distributed as dividends or fat paychecks.

Such companies with clear visibility of their cashflows are generally priced as perpetual bonds with their valuation dictated by level of interest rates rather than typical factors used for valuation of equities. Since interest rates are hardening, I will not be surprised if the valuations come down further.

Even after the pullback from highs, IGL share price has gone up 39% CAGR over last 5 years while EPS has gone up only 14% CAGR. So some froth that built up during Sept 16 to Sept 17 rally still remains.


(vinay ambekar) #313

Sorry, but can you please direct me to this presentation? Thanks.


(sarthak kumar) #314

Sorry for pestering you but I am sure there are others as well looking forward to your portfolio’s annual update :slight_smile:


(Deepen Thakkar) #315

I think Yogesh has mentioned that he reviews his annual portfolio and makes necessary changes during/after Diwali . So I think the wait will have to stay for another 2 months


(KKP_Investor) #316

Great idea to have the discipline of the levels for each of these stocks. I buy in a similar way and I also sell in a similar way. I come up with these levels based on TA methods (various charting OB and OS level creation) and it has worked well, although since TA is not an exact science, stocks do stretch beyond my sell price and go below my buy price, but it really allows me to create and maintain a discipline. For LT holdings where I do not have a sell level, I let them just ride in a zig zag pattern upwards without a mental or VTC target.

KKP


(aswin) #317

@Yogesh_s The indicator is now at 38% for largecap, 23% for midcap and just 10% for smallcap. Curious to know your take on the prevailing market scenario and whether/how you’re making adjustments to your portfolio.


(phreak) #318

For anyone still taking the temperature of the markets and interested in knowing where we are, it’s a good time to look again at Yogesh’s spreadsheet.

Percentage of stocks trading above 200 DMA in Nifty 100 is 34%, Midcap 100 is 22%, Smallcap 100 is 6%. Since all these have 100 stocks, the numbers actually correspond to the number of stocks above 200 DMA.

My observations

  1. Smallcaps - Only 6 staying above 200 DMA of which HEG and Graphite India are two which could go under in another session. Atul, KSCL, NIIT Tech and Cyient are the other 4.

  2. Midcaps - 22 Stocks above 200 DMA. 8 of these are barely above - as in under 5% above 200 DMA. In just a session that 22% could drop to 14% quite easily.

  3. Largecaps - Although 34 stocks are above 200 DMA, about 14 of them are barely above and this could drop down to 20% in a week.

Things are getting quite interesting and next few months could be a good stock picker’s market. Perhaps time to dust-off value investing principles and pick up some bargains.


(Mahendra243) #319

https://www.bloomberg.com/news/articles/2018-09-28/oil-poised-for-third-weekly-gain-as-traders-brace-for-100-crude

Can this be a risk for indian equity markets?


(Yogesh Sane) #320

It is linked in this post.

@aswin @phreakv6

I generally follow indicator for large caps as these stocks are liquid and less volatile than mid and small caps. However, small cap index is showing signs of capitulation. Good time to buy. Overall index may not bottom out for some more time but individual stocks may bottom out sooner (or might already have). Some investors prefer to wait to see a bottom forming while others jump in early to catch full upside. I have tried both. I think being a buyer in a falling market and a seller in a rising market suits my current line of thinking so I am jumping in now. Even if I run out of cash before market bottoms out, I will just sit tight.

Large caps are showing resilience mainly because global markets are strong and MF inflows are going into large caps. While nifty 50 is still barely above 200 DMA, 2/3rd constituent are below. This typically happens at the top of a bull market where index heavyweights keep pushing the index higher while rest of the pack begins to retreat. However, current situation does not feel like top of a bull market.

Bear markets last about 8 to 14 months (just a thumb rule I follow so I don’t jump in too early). Bear in small & mid caps started in Jan so we are in 9th month. Going by this thumb rule, we should be closer to the end than beginning. Since this indicator is generally correct towards end of bull and bear markets (than towards the start), we could be closer to a bottom in small caps and a bottom in mid does not look far away. Trouble is, large caps made a new high just few weeks ago so if large caps were to join the bear market these may not bottom out for several more months. If that were to become true, small and mid caps will not see a rally until large caps are correcting. Combine these two observations together, it is likely that small and mid caps will just bounce off bottom for some time while large caps adjust.

Some Small cap IT stocks have dipped below 200 DMA. Remaining are also mainly IT. IT is seeing a tail wind due to falling rupee. Falling rupee generally benefits IT companies for few quarters before customers starts asking for discounts. I will not be surprised to see IT stocks starts pricing this eventuality.

Every bull and bear market needs a sector leadership so investors have something to take cues from. Until now that was missing but financials and (interest rate sensitive ) consumer durables have taken a lead. I will watch Bajaj Finance, Maruti, etc to see if trouble on Dalal Street is spreading to main street.

I have attended several AGMs this year and have heard from few others who also have attended many AGMs this year. Feedback from them is that situation on the ground is not that bad. To me it sounds like analysts who do only desktop research are cooking up a storm in a tea cup. As long as it creates opportunities, I am not complaining.


(sushilkc) #321

@Yogesh_s Thanks for sharing your thoughts. Please can you elaborate a bit more on the statement "…Until now that was missing but financials and (interest rate sensitive ) consumer durables have taken a lead… " I mean what are the indicators that you see which give this impression


(pradip) #322

Yogesh, it will help to hear your views on my checklist. Thanks.


(PK) #323

Hello Phreak, and Yogesh,
Thanks for this doc, but can we add nifty 50 also in to this list on this doc.