Aru portfolio - Open for suggestions

Hi …I’m 35 + already and father of two kids. I’m aggressively planning to invest in below stocks for long run (10 to 15 yrs - minimum). I earn decent enough and I’m also a short term trader as well. I don’t have huge debt as I paid off most debts. I have 15 lakhs home loan currently running (get over in 3 yrs). Idea is to wealth creation as I realized the value of long term wealth creation very lately. (Remember having alembic pharma at 90 rs). That being said pls share ur valuable suggestions on my portfolio below.

Laurus labs
Route mobile.
Cdsl
Cams.
Hdfc bank.
Iex.
Itc (from 200 levels).
Eicher
Gmm faulder.
Hdfc life.
India mart
Alkyd amines
Poly plex.
Reliance.

Trust me I really value any suggestions and opinions as I’m planning for very long g term and few wrong selections might destroy the journey.

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You are very experienced and are willing to go very long term but I see most of your picks as acquired by virtue of majority discussion or in favour/momentum etc.
I am not suggesting buy/sell or reshuffle…what I am suggesting is just an exercise…that what if you had not heard of most of these famous names in your portfolio in trend…what would your actual picks been as per your own circle of competence, comfort levels, original conviction, plan and strategy…

Pardon me if these are your original conviction picks…

Pls note above is just an exercise to understand yourself better as you talk of very long term…and no suggestion to buy/sell…you may actually do extremely well with all above picks…thanks

Hey Mate,
Hope you are doing well - really nice stock picks all are expected to boom in coming years except for ITC (idk seriously hahah) and if economy needs to grow I believe banking sector is the one which always supports it would be recommending more exposure to banking can say AU small finance bank and Muthoot finance good bets for long term. And considering India’s population would also add some consumer staples ( tata/godrej consumer products and avenue supermarts) , consumer discretionary(crompton greaves or balkrishna). Again those stock picks are super awesome but considering India’s population consumer related sector is never going to stop specifically companies having EPS 15+ even 10+ going to benefit more.
Thankyou

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Thanks for spending time in reviewing the portfolio. I beg to differ some of the points especially “acquired by majority discussion”. More than 40 % is well known companies (Itc, eicher, reliance, hdfc bank, hdfc life). I chosen them to stay clear during long run.

I’m electrical engineer so I have fair understanding of IEX and the way energy trading happening across states and monopoly nature of iex.

I’m also exploring business opportunities in the journey I have realized there is only 2 listed market places available for b2b business. I just want to stay away from just dial due to their numbers and india mart is my natural choice.

I have accumulating cdsl and cams slowly from lower levels and continue to keep, they are monopoly in nature infact I wanted to keep bse also in this basket but I was waiting for nse to get listed as bse ran too beyond my valuations.

In cmo, cdmo and api manufacturing space I want to pick due to the clear demand seen in coming years , not due to the product demand but the best China alternative whixh is ofcourse India. I have analyzed many and started accumulating l.labs from 400. Same goes to amine industry, in fact inwas thinking to create basket of stocks in these speciality chemical amine pharma space with companies such as granules l.labs etc.

Between borosil and gmm I went with gmm because of clear business and good entey point.indeed this is proxy for pharma

Few others stocks I want to add but given my ability of not able to track beyond 15 I have restricted myself

Few in mind are
Tata consumer
Whirlpool
Irctc
Tyre company (BL or MRF)
Inner garments (page or lux preferably)
Hospital space (preference kms or kims)

Nevertheless I appreciate your time again !

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Thanks for your time brother. Your view about itc is definitely true …I have entered and entering at near 200 levels but if it won’t announce any demerger in 2021 I might switch…undoubtedly I safe bet at 200 levels. I have strong conviction that it will go big in 2021-22. As I mentioned I will exit at 180 or end of 2021 if they don’t define a plan for future.

Very good information about dmart and cgreaves. Thanks mate !

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Hi Arumugam, here’s my 2 cents!

with your investment time horizon of 10/15 Yrs, its better you focus on consumption stocks. While your picks are good, most of them don’t have 10/15 years visibility into the future (I mean no disrespect to your selection strategy).

Laurus Labs - Good pick but plz make sure you some idea on the industry & the company’s future plans/execution.
Route mobile - This is commodity tech. I see a very little chance of this company surviving 10/15 years, let alone give you meaningful returns.
CDSL - Prone to regulatory disruption.
CAMS - Prone to regulatory disruption.
HDFC BANK - Basket approach is preferable when it comes to banks. (my recos are AXIS, ICICI, HDFC,KOTAK, Bajaj Finance)
IEX - Prone to regulatory disruption.
ITC - Good (don’t get disheartened by price inaction in a raging bull market)
Eicher - Prone to EV disruption & changing consumer preferences.
GMM Pfaudler - Good but keep an eye on your entry price.
HDFC Life - Very high VNB multiple, keep an eye on your entry price. contrary to popular opinion, life insurance is fairly penetrated in India.
India Mart - Prone to disruption. I see a very little chance of this company surviving 10/15 years, let alone give you meaningful returns.
Alkyl amines - Good pick but plz make sure you some idea on the industry & the company’s future plans.
Polyplex - Prone to regulatory/market disruption.
Reliance - Good pick.

My picks for 10/15 Yrs are
Reliance, ITC, Nestle India, Syngene, Asian Paints, Dabur, HDFCBANK, ICICIBANK, AXISBANK, KOTAK BANK, Divi’s, Pidilite, TITAN

Disc : Not a registered Investment advisor, consider this comment for educational purposes only.

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Much appreciate your response. Can you please elaborate prone to regulatory disruption. Any one such example from past? Prone to EV disruption you mean bullet bikes will be obsolete?

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Prone to regulatory disruption means the Govt can disrupt/limit the business model by regulation. You can do your own research on this.

Yes, Eicher may not be able to make electric motorcycles that are as good as ICE motorcycles ! since these motorcycles are lifestyle vehicles, they will be around. just that it may not offer you 10/15 yrs of continuous growth.

My thesis could very well be wrong !

Disc : Not a registered Investment advisor, consider this comment for educational purposes only.

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Sure. Thanks again for the inputs. Your perspective on regulations making me think again…I primarily considered (cdsl, cams and iex) these stocks given the monopolistic nature (nsdl and nse yet to be listed & Karvy is a dead snake). Indiamart also very similar b2b market place unless giants like Amazon don’t venture into this space.

The only sector govt regulations played the role was sugar sector and most companies underperformed in the past.

Very valid points thanks for sharing …

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I wont comment on individual picks, but from the point of diversification & professionally well ran companies in India creating wealth would suggest you to add an IT player (from Nifty100 list only) on dips , 10-15 years is a long horizon for predicting a company’s longevity based on the present (Needs periodic tracking/switching in lieu of few apples going rotten :wink: ), if you play your cards well might get a steady compounder in your portfolio without going much wrong…

All the best !

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Hi Arumugam,

First, do you own a house with no debt? Do you have some FDs? Are you sure about the percentage of money that you wish to invest in equity? Yes? Then, read further :slight_smile:

You are a father of two kids and cannot afford the loss of capital (or I assume, a significant mark to market drawdown).

I would suggest that you focus primarily on systematic investment plans in 3-4 good Flexi-Cap mutual funds and hold them over the next 10 to 15 years. Check with your investment advisor. On the top of my mind, I could say Parag Parikh Flexicap, UTI Flexicap and Can Robeco Flexi Cap but you would have to check track records and expense ratios on your own.

Do not get excited with the bountiful returns from specific stocks in the past 1 year. Extraordinary liquidity is floating around which has distorted discounting rates and multiples of stocks.

Your objective is a reasonable rate of compounding, say 12%-15%, and not necessarily identifying multi-baggers. This compounding is an average and not a linear rate that happens every year. You will have negative years. Compounding at 12%-15% over long periods will do a lot.

You can have a smaller systematic investment plan in 2 mid-cap funds to satisfy the craving for excitement. Axis Midcap and Kotak Emerging Equity Fund come to mind but again, check track records and expense ratios. Or, you can have a smaller portfolio of stocks. This is a satellite and not a core allocation.

I know this sounds boring, but, if it gets the job done then that should be enough.

Best Wishes.

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10-15 years is a long time my friend. I don’t know how you are going to do that. If you are sitting in 2015 and had to pick 15 stocks which stocks would you pick for the next 15 years? I bet that list would look very different from your current portfolio. if u were to pick 15 stocks for 15 years in 2023 that list would again look very different from your current Portfolio. You could do this exercise every year and the list will keep changing
Competitive advantages disappear, new tech becomes old tech, consumer preferences change etc etc. A lot will happen in the next ten years which will seem obvious only in hindsight
Good luck🙂

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Arumugam,

Good portfolio choices. You have a good understanding of the market. Your education background and experience are very suitable for direct stock investment. Some passing back out of learnings from being in the market for a long time. A portfolio should not be rigid. Regular follow up is always needed. It is very obvious that you will be shedding some of the current list every year and adding new ones. If you are not comfortable with any share just chuck it. Do not fall for price action only. Always look for value. Fancied shares are not necessarily the best. And do not fall for always buy the safest trap. Why does any body need a portfolio of HDFC, RELIANVCE, Nestle, HUL, MRF etc. If these are your choices, simply buy NIFTYBEES and relax. Stock picking and following it grow is a thrilling experience. Enjoy it. And always remember even if 3-4 of your 10 shares do very well, 4-5 perform in line with market and 2 underperform, you are doing a great job of stock picking. All the best.

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Thanks much appreciate!

@notreallythere…thanks for your response. I must say I have enough corpus from debt instruments (not fd but ppf epf nd gold ) to create later year expense. Candidly even I don’t care if I loose money from direct equity stocks. I’m active trader but never been long term investor.

Regarding your excellent idea about mutual funds I have been investing in actual funds in last 8 years via sip and average cagr of 23%.

Hdfc small cap.
Kotak flexi cap.
Mirae asset large cap.
Sbi blue chip.
Axis mid cap.

I will consider your response as more of intellectual than sharing open ideas. I have asked opinion about choice of picks than I have but…I will leave it up you to go and read what you have responded…nevertheless I should’ve responded my entire investment background…

Again appreciate your in responding, I’m sure it will be useful some someone …

Totally agreed man…this requires every year review to add and remove some stocks. As it is today whats your opinion ??

Hey. I can only give you my opinion on what i know. I don’t have a thorough understanding of most business on that list except laurus labs and CDSL. Both of which I own.For the rest my knowledge is outdated. I used to own some of these companies at some point of time but am no longer actively tracking them. So if someone tells you that they like your portfolio picks, the first thing to ask yourself Is- how well does this guy really know this company? Is his opinion based on outdated information? Etc etc
I have lost a lot of money listening to people who knew a lot lesser than me but still had an opinion about everything. Just be careful🙂

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