Anurag's Portfolio - Beginner's Portfolio Feedback

[George_Cx]

I am in the field since 1996. My experince is after retaining a pre determined ceiling amount in a perticular scrip book profit then and there. The market may go down at any time, please see the history of nifty/sensex for last 20 years. I was holding maruti at peak level in 2018 when the price was 9800 waited it to become 10000. Bu it went down and nerver attained10000 since then. That is a lesson, book certain profit then and there

[Amritasen22]

Growth stocks are generally overvalued.This is because investors are will to pay a higher price for it’s future returns.Such stocks give higher return in bull market but has low margin of safety.Such stocks are generally not multibaggers but are consistent capital compounders

[Tar]

@Kris

isn’t it dangerous to invest everything in a single stock?

I don’t think so. Most often concentrated investing is seen as investing in obscure names. Why do you want to do that? There are lot of well known brilliant companies available with long run way both in mid cap and large cap space. For example, you can concentrate everything in a firm like Syngene if someone is willing to study it and do a deep dive on it. Similarly you can even concentrate it into a Reliance Industries for example which has lot of growing parts and is the largest company in India. Concentration doesn’t mean buying under 100cr companies. Concentrated investing is simply identifying a good well run company, studying it in depth and allocating a large chunk of portfolio in it.

@Kris

No matter how well you research and understand the company/business, there is always a possibility that a particular stock selection can go wrong for different reasons. Does a newbie has stomach to digest let us say a 50% draw-down and stay invested?

All these risks comes from not knowing a business. A drawdown shouldn’t scare an investor if he/she/they have done their research and know the business. On the contrary a well researched investor will see a draw down as a buying opportunity.

@Kris

Many new investors who face such losses during their early days eventually leave the stock market and never return. In my view it is better to start with something like 10 stocks with 10% allocation each. Just a contra view. Thanks!

They leave cause bull market seduces them in, they invest based on tips and zero research and exit at a loss, which they wouldn’t if they had instead research in the first place.

@Kris

Does one know the concept of stop-loss -etc

There is no concept of stop loss in investing.

Drawdowns and volatility is not to be scared of in the market but embraced. What I would be more worried of is corporate governance issues than 50% drawn down in stock price.

[raysubrata]

As a student you are doing a great job and there would be lot of learnings on the way. I personally don’t see any particular reason to reduce your holding numbers. Your returns will not increase just because you take a concentrated bet. If after sufficient learning you have enough conviction, only then you can take a concentrated bet. Otherwise it is fine to have a diversified holding…

[Kris]

@Tar

They leave cause bull market seduces them in, they invest based on tips and zero research and exit at a loss

I totally agree and they deserve it. But at the same time, the statements like:

@Tar

Concentrated investing is simply identifying a good well run company, studying it in depth and allocating a large chunk of portfolio in it.

@Tar

A drawdown shouldn’t scare an investor if he/she/they have done their research and know the business. On the contrary a well researched investor will see a draw down as a buying opportunity.

@Tar

Drawdowns and volatility is not to be scared of in the market but embraced.

are very idealistic views in my opinion and often preached by the so called experts who come frequently on TV, write Blogs or have huge Twitter following -etc. Check how many of these twitter handles or bloggers were active during 2017-19 period compared to now. If this bull run ends tomorrow and the market enters into a severe correction phase most of these will hit a mute button.

As an investor, in my opinion (I stress the words like “my opinion” and “my view” because I am not an expert and more importantly I do not want to sound rude or over-confident) one has to go through a complete bear market cycle to understand what kind of investor is he and how much is his ability to hold the nerve during a prolonged rough patch.

There is a limit on how much one can buy / average down and in many instances the stock keeps going down further and recovery may not be a v-shaped one like it happened in 2020. One cannot say how he would react/behave in such situations even if he is very confident about the company he is invested in. In my view this experience is important and until one actually goes through such situations (or start the investment journey in a bear market) I would not advice anyone to invest 100% in a single stock, for that matter 100% investment in Equity itself.

I think these discussions are going out of topic and sound more like a free gyan so I will not post anymore on this subject. If one feels this post is not value adding then please flag it. Thanks!

[Kris]

Hey @anurag23, I just noticed that you haven’t replied to this thread for a long time. I hope we didn’t scare you with the long posts here regarding the concentrated vs diversified investment, bull vs bear markets -etc. I hope you are doing good with your portfolio building exercise. Please do share your views here. Cheers!!

[Mandar_Chatufale]

Hello, can you please share how do you determine the valuations of a company is high?

[manjunathca]

Hello anurag, any updates on your portfolio ?