As some one who has invested long back in Mayur and Astral and has accumulated lucrative returns, but missed re-entry consistently by trying to time the market! Is Mayurtrading reasonably given P/E > 10 for a some one with (2-3 years) horizon? Is Astral?
As a beginner in Investing I would be very grateful to a systematicmechanismto consider continued investment! Even though when the stock runs up quite a bit in short spans like Ajantha did.
Mayur is an A category businessin many portfolios.
It means for me a certain predictability in business performance, financial prudence and ability to fund that growth in business performance, management vision and execution depth in tapping opportunities before it, meet and harness inevitable business challenges, while moving up the value chain.
In simple terms - I fully expect this kind of a business to grow at 20-25% CAGR for next 2-3 years i.e. double business performance in the next 3-4 years (Sales & Earnings)
a) I will ALWAYS RE-INVEST all the super-dividends the company keeps sending my way back in Mayur
b) I will keep making fresh allocations to Mayur (from time to time) as long as Valuations don’t shoot beyond what I consider reasonable valuations for it 10-12x 1 year forward. If anytime it falls below 10x it will be time for me to weigh loading up versus other opportunities - provided it doesn’t exceed 30% of my Portfolio by Value
With the caveat-I have to keep track of developments/management-speakonce every 3-6 months - above sanguine viewpoint may be modified if that consistency starts faltering, or we see evidence of contrary trends for 2 or more consecutive quarters.
There is no substitute to equipping yourself with all that you can know about a company -when becoming familar with the business for the first time - and thinking/wondering about the quality of this business versus others in your portfolio and outside of it.
Once you have done that initial hard work - then keeping on investing in Category A business are NO-BRAINERS, for me. Then just once in 3 or 6 months is all the amount of attention you may need to give, maybe an hour or two!! That’s all it takes for me for Mayur & Astral assessment/continued allocation decisions, today.
Leaving me free to ask searching questions of the next Category A business candidate/prospect (I am getting familar with) in my portfolio.
Others may like to cite their style/preferences.
I would agree with Donald here.
One has to the time investment and energy initially only. And later keep checking whether things are on track or not every 3 months. And even if there is slight divergence then should give yourself 6 months and then can take call accordingly.
Coming to additional allocation to the stock, instead of looking backward like how much you paid for it earlier; he should look if it bought today what is the return can be expected. And is that kind of return possible with any other stock.
And it is always easy buy something which you already had, has seen the business performing some time, then to search for something new and buy it. And that something will take some time to perform or may not perform.