Building a much bigger Long term Portfolio

Due to unique situation I find myself in terms of personal finance I am currently planning to build a portfolio to be initiated in next few months.

Currently I have a small equity portfolio which has gone through considerable trimming. I call it my learning portfolio that I have mostly built during 2008-2011. That was a time where my knowledge of how to analyse a company was half formed (or maybe even 20-30% of now ) and mostly passed through the Lynch filters but I hardly did very detailed analysis. Looking back i did stick to some basic principals that helped me bring decent returns.

  1. Growth companies in easy to understand spaces (no pharma, IT, commodities, etc.)
  2. Low to zero leveraged /debt companies
  3. some of the positions triggered by awareness of the market (Havells, TTK)
  4. Be quick to drop less favored ideas for those where I have stronger conviction
  5. Try to buy with a margin of safety
  6. I did follow some of the investors who have taught me a lot like rohit chauhan

I also fully acknowledge that I have been lucky having rewarded by this bull run and I refuse to take full credit for the good return so far.

Current Portfolio

  1. Havells (avg. price 36) - I got interested during the time they aggressively started building the brand. Classic differentiation in an largely unglamorous space
  2. TTK (avg. price 427) - I was looking for a consistent performer that consumers will always buy no matter the macro cycles
  3. BEL (avg price 248) - This was through my study of analysis by some of the gurus i follow
  4. Titan (Rs. 78) - Simple story for me to understand
  5. HDFCBANK (rs. 248) - At some point I felt the banks were being undervalues so I took position in 3-4 quality names
  6. CRISIL (rs. 421) - again through some well informed blogs
  7. KOTAKBANK (rs. 87)
  8. AXISBANK (rs. 101)

The future portfolio is likely much bigger and while I still like all the above names I have refined my process and places like valuepickr have helped to strengthen some of my convictions on my new picks. There are a lot of business I like but right now I still don’t think there are many value plays out there. The portfolio has to be of great companies at fair price (still not willing to overpay even though love some of the names out there)

My picks at the current levels are

  1. PI Industries
  2. Mayur Uniquote
  3. HDFC bank
  4. Yes Bank
  5. eClerx
  6. MPS ltd.
  7. Accelya Kale
  8. Ashiana Housing

I also have a list of names I see as relatively value picks for me where I want to build a starter positions to evaluate on a medium term

  1. Camlin Fine
  2. Kaveri Seeds
  3. Sharda Cropchem
  4. KRBL
  5. Kovai MEdical
  6. NESCO
  7. Inox Wind
  8. Control print
  9. Atul Auto

Apart from this I do have a wish list in case value becomes attractive but where I feel it is tough for me to take a position at current levels.

  1. Eicher motors
  2. CRISIL
  3. Kajaria
  4. Cera
  5. Rupa &Co
  6. Amar Raja
  7. Poly Medicue
  8. Gruh
  9. Titan
  10. Page
  11. NBCC
  12. Havells
  13. Symphony
  14. Kewal Kiran
  15. Pidilite
  16. P&G hygiene
  17. Nestle
  18. TTK
  19. Hawkins
  20. Asian Paints
  21. Maruti
  22. M&M

Would invite views/comments.

Would like to use this thread as documentation of my investment journey

1 Like

you have too many stocks on the radar!

Of these NESCO should be part of your core holdings. Also one or two
housing finance companies in which case you can drop all the other banks. I
am buying Repco on corrections. It is part of my core holdings.

If holding only one housing finance company, you could add an NBFC like L&T
Fin holdings and skip the banks entirely.

Water is becoming a big theme because of irrigation and sanitation and
Indian Hume Pipes is a must in any portfolio.

Other gems would include Oriental Carbon, Aditya Birla Nuvo (pre demerger
of Pantaloon fashion), Piramal Enterprises and Kesar Terminals

  • shiv kumar

NNaik
http://mandrillapp.com/track/click/30607331/forum.valuepickr.com?p=eyJzIjoiSHRPY2pTSXotTnJDQmJJcFVpeUlsY256eUxRIiwidiI6MSwicCI6IntcInVcIjozMDYwNzMzMSxcInZcIjoxLFwidXJsXCI6XCJodHRwOlxcXC9cXFwvZm9ydW0udmFsdWVwaWNrci5jb21cXFwvdXNlcnNcXFwvbm5haWtcIixcImlkXCI6XCJkM2M3ZWZkZGVkNTQ0M2Y2OGQxZjExMzU0OWZiZWYzMlwiLFwidXJsX2lkc1wiOltcIjg2NjdlNTc1NzJhMDBjMGFkNGJmMGEwYzQ2NjM0ZWMzYzNkYzdmM2FcIl19In0
January 19

Due to unique situation I find myself in terms of personal finance I am
currently planning to build a portfolio to be initiated in next few months.

Currently I have a small equity portfolio which has gone through
considerable trimming. I call it my learning portfolio that I have mostly
built during 2008-2011. That was a time where my knowledge of how to
analyse a company was half formed (or maybe even 20-30% of now ) and mostly
passed through the Lynch filters but I hardly did very detailed analysis.
Looking back i did stick to some basic principals that helped me bring
decent returns.

  1. Growth companies in easy to understand spaces (no pharma, IT,
    commodities, etc.)
  2. Low to zero leveraged /debt companies
  3. some of the positions triggered by awareness of the market (Havells, TTK)
  4. Be quick to drop less favored ideas for those where I have stronger
    conviction
  5. Try to buy with a margin of safety
  6. I did follow some of the investors who have taught me a lot like rohit
    chauhan

I also fully acknowledge that I have been lucky having rewarded by this
bull run and I refuse to take full credit for the good return so far.

Current Portfolio

  1. Havells (avg. price 36) - I got interested during the time they
    aggressively started building the brand. Classic differentiation in an
    largely unglamorous space
  2. TTK (avg. price 427) - I was looking for a consistent performer that
    consumers will always buy no matter the macro cycles
  3. BEL (avg price 248) - This was through my study of analysis by some
    of the gurus i follow
  4. Titan (Rs. 78) - Simple story for me to understand
  5. HDFCBANK (rs. 248) - At some point I felt the banks were being
    undervalues so I took position in 3-4 quality names
  6. CRISIL (rs. 421) - again through some well informed blogs
  7. KOTAKBANK (rs. 87)
  8. AXISBANK (rs. 101)

The future portfolio is likely much bigger and while I still like all the
above names I have refined my process and places like valuepickr have
helped to strengthen some of my convictions on my new picks. There are a
lot of business I like but right now I still don’t think there are many
value plays out there. The portfolio has to be of great companies at fair
price (still not willing to overpay even though love some of the names out
there)

My picks at the current levels are

  1. PI Industries
  2. Mayur Uniquote
  3. HDFC bank
  4. Yes Bank
  5. eClerx
  6. MPS ltd.
  7. Accelya Kale
  8. Ashiana Housing

I also have a list of names I see as relatively value picks for me where I
want to build a starter positions to evaluate on a medium term

  1. Camlin Fine
  2. Kaveri Seeds
  3. Sharda Cropchem
  4. KRBL
  5. Kovai MEdical
  6. NESCO
  7. Inox Wind
  8. Control print
  9. Atul Auto

Apart from this I do have a wish list in case value becomes attractive but
where I feel it is tough for me to take a position at current levels.

  1. Eicher motors
  2. CRISIL
  3. Kajaria
  4. Cera
  5. Rupa &Co
  6. Amar Raja
  7. Poly Medicue
  8. Gruh
  9. Titan
  10. Page
  11. NBCC
  12. Havells
  13. Symphony
  14. Kewal Kiran
  15. Pidilite
  16. P&G hygiene
  17. Nestle
  18. TTK
  19. Hawkins
  20. Asian Paints
  21. Maruti
  22. M&M

Would invite views/comments.

Would like to use this thread as documentation of my investment journey

Thank you Shiv for your inputs!

Even though my watchlist is long I don’t think I will be able to add more than 1-2 in the next 1-2 years as to me the value already seemed to be fully realised inmost of the cases.

Indian Hume Pipes looks very interesting. The website is great and very informative. The long history, expertise, multiple locations do have makings of a Moat. need to analyse in more detail.

I am also trying to look at options like Repco - still learning and hopefully will form a position on it soon.

yes I did think of NESCO as part of my core portfolio - still forming my conviction here on the long term growth prospects

Here is where I am right now. Following are the positions I plan to build over next few months. I would also be on lookout for sharp falls in the market and if some of the other I am following above are at good value.

  1. eClerx
  2. P I Industries
  3. Accelya Kale
  4. Premco Global
  5. ITC
  6. HDFC bank
  7. CERA

Still looking for more ideas at good value

Finally have started building position. The portfolio looks as below

PI - 19%
ITC- 19%
eclerx-19%
Accelya-15%
Premco-7%
MPS-15%
Avanti-7%

I have tried to be very focussed on valuation and remain within circle of competence. have stayed out of Banking, NBFC, Pharma, etc. for now (hopefully I will learn more in these areas). Niche Outsourcing space is area i know well due to personal experience so I am definitely overweight on that. FMCG is another area where I am looking for more ideas but valuations seem high to me.

Avanti is one idea I am still not that comfortable about (based on my personal model/area of competence) but I feel I have built a good MoS there but it is something I will have to review more closely. Others I feel I should be able to give good time to perform/show value.

Comments are welcome from all

1 Like

Very interested in HMVL also as the next stock in the portfolio. I am forcing some diversification in my portfolio though I feel good value is still difficult in the market

So here is the portfolio as of now that has been built over last few months (starting Mar 2016)

As you can see I have high concentration in my top 3 picks where I have higher conviction. Some of the others are in secondary set.

Obviously I am not tracking the returns over such a short term but the portfolio is up 8% (sensex is about -1% though I should be tracking vs. mid cap index)

I review quarterly results and add for positive triggers and reasonable valuations. At an overall level I am still 30:70 equity:debt and the portfolio size is big for me so plan is to gradually build this (not in a hurry) and look for few more ideas while research more on my existing portfolio and adding to it over time.

any comments etc. would be great

1 Like

@NNaik

You seem to have a great portfolio Sir. top 3 picks are 54% of the portfolio! Seems a little risky to me but as long as you have a strong conviction it’s good.

Any particular reason why you have not initiated investments in REPCO and CERA? Both were or your radar as you discussed earlier. They seem to have a corrected a lot and are available at attractive valuations right now.

Also what is your view on Accelya Kale’s recent news item, as shared in it’s thread.

Do let me have your comments

1 Like

Thank you for the comments.

REPCO the reason is I feel that financial institutions are not within my circle of competence and I still have some way to go before understanding these companies well

CERA is good business but whichever way i look at it finally i feel it is a commodity like business. it is good brand and has strong dealer network but i feel it can be easily impacted by chinese imports or other low cost players. I do not see a very strong consumer franchise. Again I maybe wrong but valuations are also rich so I would rather be wrong in not picking it

Accelya I feel business is still strong so will wait for how this news pans out

Finally this is a portfolio that I feel i know reasonably well - I feel FMCG and allied businesses (packaging etc.) , logistics, KPO and outsourcing is where i feel I have more understanding based on my experience.

Thing is valuations have been rich and I have had to work hard to build this portfolio so looking at other names. TATA ELXSI is something i just got into

1 Like