Bala's portfolio Need suggestions

Hi Value pickr Members,

I’m a beginner in stock market and took positions in following stocks by doing research in value pickr and screener.

Ajanta Pharma- 20%
PI industries - 15%
Tata Motors - 15%
Praj industries - 15%
Just Dial - 15%

Cash ~ 20%

I would like to buy more in these stocks on dips.Kindly provide your valuable suggestions.


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Your portfolio appears fairly concentrated for a beginner. Concentration should be a natural outcome of knowledge and (justified) confidence in the thesis. Neither of which is expected to be high for a beginner. I think you should think about that. It is better to concentrate as you rise on the learning curve.

Also for us to be able to give you some feedback, it would be useful to hear your brief thesis on each of these names. That will also enable you to put your learnings together cogently.


Thanks a lot for your reply:-

Ajanta Pharma,PI industries and Tata motors are blue chip stocks with following attributes which have undergone some correction.PI industries will have advantage as there were reports that monsoon will be good and budget allocation to agri space.Tata motors sales may increase as there is proposal to ban trucks which are 15 year old.

(Average return on equity 5Years > 20) AND
(Debt to equity < 1.5) AND
(Interest Coverage Ratio > 2) AND
( PEG Ratio <= 1) AND
(Profit growth 5Years > 20)

Mid cap companies Just dial and Praj industries:-

Just dial is a good stock which also has offered a buyback on share at a price of 1550 and I think its a good point to enter.

Praj industries is also a debt free company and promoters are aggressively buying the stock in market.


Bala - It’s good to add financial company and a bank to your portfolio. They will give really good returns when economic turnaround happens.

Hi Bala,

I think your portfolio is too concentrated among few stocks and hence there is always a major risk if 1-2 stocks don’t perform. I would advice to allocate to at least 15 stocks so that the risk is always spread no matter how bullish you are.

Also as a practise I try to not allocate more than 10% to any stock no matter how bullish i am on the stock. It is always advisable to spread the risk and allocate the money in the stocks which has the same potential rather than investing in just 2-3 baskets.

At the current market position, I believe 25-30% cash position can turn very useful since I think global markets will continue to remain challenging. Also try allocating 10% of your portfolio in stocks which can prove to be multi baggers in 2-3 years and have the potential to give 4-5X returns.

Below is the mix I will recommend for you, though I am currently invested in more than 100 stocks.

Large Caps/Blue Chips - 30% (Market leaders)
Performing Midcaps - 45 (Future Market Leaders)
Small Caps - 15%
Potential Multi baggers - 10% (At least 5 stocks, do not allocate more than 2% in each)

Dear Bala
I am personally pleased at your stock selection, heartening to see beginner giving a shot at quality and diversity.
What I like about your portfolio:

  • apparently looks like your understanding of business competence is much wider (I can see Pharma, Chemical, Auto, E-commerce). Definitely a wide circle of competence, however you may further look at other business which you understands better or perhaps consumer monopoly types like daily usage products, familiar products or services. Familiarity can come from use, employment or acquaintance even.
  • 20% cash, this is a cracker!, after 20 years of practice I am struggling to maintain cash even now. Maintain adequate cash balance, shows extreme strong behavioral finance.
  • spread your portfolio to my opinion basis “attributes” that drives the company. For me these attributes what I use are a. Competitive Advantage of a company b. Quality of management c. Risk management capabilities (operational, financial, compliance and strategy) d. future catalysts for business e. margin of safety (franchise growth) f. Special situation (distressed asset, spin off or even emerging moats!)

Also please allow some natural flavour to come in, after five years you can customise and tell your story, will wait to hear from you then as well on your journey! :slightly_smiling:

Hi Suvendra and bhutra,

Thanks a lot for your suggestions and kind feedback.

I would take your advise and diversify my portfolio to 10-15 stocks by allocating capital slowly and steadily by doing sufficient research .