Yogesh's blue chip 10 Portfolio


(Vijay) #103

Sales is not the only growth metrics for valuation as margins are going to increase. The new models seldom have discounts. The higher variants usually have margins in excess of 40% and the spares often have even higher margins. For every vehicle sold today, the sale of spares contribute for the lifetime of the product and often increases with age. This causes multiplier effect.

The growth of cab industry has pushed Dzire to become the new Indica of cabs. The running cycle for these cabs are very high and the service and spares over time will be much higher than personal use.

Altogether I feel we could see bottomline growing much faster than topline. This if you look at PE, the stock is fairly valued, if not undervalued. The capacity constraint is one big hurdle now and it will ease over time. This means they can increase sales growth even further from 2020.


(Abhinav Mehrotra) #104

The cab people do not buy original spares and also look to save money if they can by getting service done in private garages. The competition is high and pricing power low balled in the segment you are talking about.


(Vijay) #105

Have you done any study on this data point? I have done a detailed study on Maruti manufactured cabs and over 85% of respondents use genuine spares (MGA) and over 70% use authorized dealers for service.


(Abhinav Mehrotra) #106

Please do share your study, would love to get into the details of it.


(yourraj) #107

Thanks Yogesh ji ,
my intent regarding index investing is one should have a sound sleep :grinning: Well researched with optimum margin of safety hand picked quality stocks are highly effective

could you please enlighten us on your following stocks on light of following factor

in my opinion these are overvalued stocks I couldn’t find strong rational to buy at such high P/E stocks

disc: Not invested in any of the stocks as per your 2018 portfolio , I have invested in some of the mentioned below but not in all

as per my understanding 2018 portfolio should be

Mayur Uniquoters Ltd. 13%
Kitex Garments Ltd. 12%
Chaman Lal Setia Exports 15%
IDFC Bank Ltd. 10%
Confidence Petroleum India 10%
Lupin 10%
indiabulls Housing finance 15%
Mahindra & Mahindra Ltd. 5%
Redington India 5%
Nath Bio-genes (india) 5%

Looking forward for your kind suggestions to break my belief and disprove my rational of stock selection and opposing views

Regards


(Storyteller) #108

(1.5cr) #109

Investors buying companies like these… I dont undersand! Why not buy a basket of MFs you will get better/similar returns with similar risk and an active fund manager for a very very small fee!


(Peabody) #110

Just wondering -are you comfortable holding India bull housing given the dubious nature of the promoters.


(Yogesh Sane) #111

Why would you say promoters have dubious nature?

They are paying taxes, salary is reasonable, their debt is rated AAA, and they are paying 50% of profits as dividends.


(Vijay) #112

First the mutual funds are not as good as you glorify. Second is the fund manager. If the fund manager is good, he gets too much aum and his hands are tied. Also I see that most of the average fund managers are less qualified than many here in this forum. Some of us here have been to tier 1 US business schools and have over 20 years of experience.


(1.5cr) #113

Go through my posts. You will understand that you dont need a tier 1 business school for USA to succeed in life. In reality spending that type of money to go abroad and come back to become a full time individual investor makes no sense. Had you taken that money for education and compounded it from a young age even at 12-15%, you would be lecturing at b schools. See the katyals of capacite… I asked a similar question to reputed investor. He laughed and said self study to be a good investor. If you learned everything from a top b school then all the analysts would be worth 50cr plus at the time of retirement…
Prospects of getting a good job etc are possible only if you get a reputed degree, I agree. But to judge your smartness and investment skill on a degree is a not correct for sure. Studying business is a waste. Im 22 today. Ive learned more from my laptop and an internet connection than I would have by getting a formal masters degree. You can check my posts. Its about having the right education not formal education. I still continue to learn and try to not rely on external research, but that is a long term goal and hopefully over time I’m able to be on my own when it comes to ideas and research.


(Jaclyn) #114

Im 22 today. Ive learned more from my laptop and an internet connection than I would have by getting a formal masters degree.

I like these words. Imagine even if 1 out of 100 uses the internet this way rather than wasting their time on social media or other stuff how far they will go in each of their field.

Internet has democratized the learning. You just need to imagine with a little ambition anyone can succeed.

I have used the internet to my advantage and polished my thoughts.


(Vijay) #115

I agree that B school degree is not required to be successful but certainly is not a waste of money. Look at my post and you will see another factor as ‘experience’. That along with education (bschool or self learn) is vital to avoid common mistakes.

Will you be able to perform complex coronary artery bypass graft surgery without formal education? Very few people could attempt and may be even succeed. But the general public derive knowledge through education. I am one of those average guys who learn from all sources (b school, annual reports, presentations, research thesis, research reports, etc.). The money spent for these activities is not wasted.

Unfortunately if average guys like me skipped education, it would not have been possible to

  1. Get the first million dollars through salary which can be used for investments.
  2. Understand businesses and be able to value companies.
  3. Reduce market risk by having alternate source of income (read it as salary)
  4. comprehend complex research reports and analysis

(1.5cr) #116

B schools cost alot of money. You can learn all of the mentioned through other sources. I dont have a prestigious US B school degree. Ive said that studying business is a more or less a waste of money. Social conditioning tells us its a safety net. You of course need to be a proffessional to be part of the healthcare industry. Professional qualifications are different. Learning to understand businesses and valuations, the safal niveshak mastermind course costs 15k rs. Approx 250$. I dont believe that you should categorise investors based on their qualifications. There is research on how people who dont take the student loan route end up on average being wealthier and debt free by age 40. This is in the case of the USA. You can run some basic calculations and come out with a similar result. Chances of someone becoming the next CEO of Goldman sachs is akin to someone finding and holding a 30x plus stock… Compounding at 26% CAGR would multiply 1re to 10,000rs in a period of 40 years. That is 10,000x. As far as salary aspect goes, I 100% agree. One definately should invest in a bachelor’s degree/diploma. But you dont have to do so by spending a pretty hefty sum on intl education. The money that your parents save for that intl education can be compounded from a young age.
Again not saying its wrong/bad/correct. Im saying judging a persons knowledge based on a foreign degree is outright stupidity. A person who reads every single famous book on investment and philosophy and started a portfolio and experienced investing would be a million times smarter than a harvard mba who sat overtime and completed case studies and assignments with an internship. Just dont judge someone on their formal education. Formal education means absolutely nothing!


(Vijay) #117

Some B schools in Europe and even in India are reasonably priced. In US, some public universities are priced fairly. You believe that education is of no use but my experience has been different. Sitting and taking a class with CEOs and top executives, which is possible in US (and may be in other countries) really gives a broader understanding of business.


(Kumar Saurabh) #118

Guys, let’s focus on stocks and Yogesh’s portfolio approach . With all humbleness, this is not value adding


(Yogesh Sane) #119

Index investing is a good strategy and in fact it is now the most popular strategy in the West going by the inflows into index funds. Your returns will be average, nothing less nothing more. If you are happy with that, there is no better way than index funds. That’s not a low maintenance strategy but a zero maintenance strategy. You can buy the index and forget about it. Someone will take care of maintaining the index and someone else will mange the fund to track the index. Most members on this forum though would like to earn above average returns hence they pick their own stocks. As market become more efficient at pricing stocks, more and more active investors will migrate to index funds.

There are as many strategies as number of members and there is no right or wrong strategy. What I presented is just one such strategy where I pick only 10 stocks from Nifty 50 index so that my universe is limited. Someone has already done the job of shortlisting 50 stocks for me so only have to marrow it down to 10. Idea is to beat the index by picking 10 best stocks from the 50 in the index. This is a low maintenance and not a zero maintenance strategy as annual re-balancing is needed. Reward for that is higher returns than index funds.

UPL is trading at PE of 19 and not 91 as you mentioned. Please check your inputs. Eicher looks expensive based on PE but it is growing at a high rate and has strong products so investors are already paying for future earnings.

Since this portfolio consists of only blue chips (members of Nifty 50), I have not included other stocks outside the index.


(Amit Jain) #120

“Index Investing”, with little effort, can be made into “Investing in Index stocks”, which is 1.5 times more profitable.

Fund managers have to follow rules, whereas individual investor who can spare an hour a week, can manage a portfolio of Index stocks with better efficiency.

Use of readily available statistical information and common-sense observations will lead to great returns. Much like what Yogesh bhai has charted out in his recent example of a well balanced and a logical portfolio.


(1.5cr) #121

It takes alot of time and effort to hit that 18-26% CAGR long term goal. I wont explain the maths behind compounding as we all know that even a 1% difference has a massive affect on wealth in the long term when we compound. Thing is in India good mutual funds have satisfactorily outperformed the index. It is every indians birthright to compound in the market. Every Indian can be very wealthy relatively in their lives if they all just begin investing from a young age.
How to become a billionaire? Firstly who needs a billion dollars (roughly 6000cr today)
But none the less what is something that almost anyone can do?
Compoound 1lakh at 25% CAGR for 60 years. And you should be around that number. Feel free to go cross check. That is the amount of wealth that a long term investor can create. Play around with the starting sum and throw in an sip you could see some serious numbers. Of course compounding at 25% with large sums of money is nearly impossible. But you understand the idea right… Its not hard for every indian to be very rich. Forget 6000cr most Indians at the age of 50 itself dont have a portfolio of 1cr. Imagine if you start doing this for your kids, your family will be among the wealthiest in India.


(kums17) #122

Great read. Thanks and keep writing on this topic Yagesh