Changu Mangu The Bull - Portfolio

@valuestudent - thanks for sharing your personal experience…just curious with a dream corpus already, why did you resort to day trading? Was it a part of a plan or like you became full time investor (assuming with the kind of capital you mentioned or do you do any job) and had extra time and wanted to make most of it?
Hope your new strategy works well for you now!

What were triggers for your complete exit by end of 2021?

Many can feel euphoria in hindsight or even then but complete exit must have some solid triggers?

Did you do this for first time, I mean complete exit and side stepping or have done it before also?

I agree some type of real estate is good in India…however even after end of 2021, some good businesses have either given better returns or better yield or even both in some cases than real estate and/or opportunity to accumulate…would be nice if you could share your top 5 holdings when you made complete exit…that would make us understand if they were momentum/trading/sector rotation picks etc. Thanks

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@valuestudent thanks for sharing your experience. To share my personal experience with the weapons of wealth destruction: i started playing in Options toward the end of 2020. In my first couple of weeks trading options i made a few lakhs and i thought i had discovered the secret to making stupendous wealth. It was exhilarating – i started looking up prices of yachts and private jets (you can imagine!).

In the following weeks i lost all my gains plus more. I had no idea why the Airtel call option price was deteriorating much more rapidly than its share price, or why the same wasnt happening with HDFCs call.

With my dreams of owning private jets coming to a crashing halt, i promised myself to not burn my hands again again with these instruments.

Someone incredibly smart i know told me a few years ago “futures and options are for managing risk and not for making money”. Wish i had paid heed to his advice.

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  • Whenever markets give returns too fast to digest i feel jittery about future prospects.
  • i didn’t find many value buying opportunities… almost everything felt expansive
  • i was very concerned of upcoming Fed rate hike cycle… and basically my view was to avoid first 3 rate hikes and then assess again…

i had a call with my friends and we all decided that from here onwards… safer bet is real estate so we starting attending HUDA online auctions… and bought plots at ~25% discount to market rate… and then i pressed exit button on all stocks together as payment was to be done… rational was at least i will make 20% on this bet… as a thumb rule we buy only when there is minimum 20% discount to market rate… plus Gurgaon is very liquid market…

i did partial market exits in jan 2018 as well… but at that time i did rollover from small-mid caps to large caps… thinking it would be safe… but it was painful experience of 2 years… and later i saw vedio of stan druckenmiller where he mentioned his secret to 30% compounding is side stepping financial crisis and betting on other underperforming assets which made perfect sense to me… staying in market(bubbly phase) lets say 60% long and 40% short wont help you reaching 30% compounding target… at max it would be take you around ~20% range… so timing is sort of essential if one want to reach ~30% compounding.

my top holding at the time of exit were: AIRTEL, IEX, HDFC, IT Basket(Mastek, KPIT, L&T Tech) + Cyclical bets smallcase run by Jiten parmar

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Well, I’ll share an example; two people are walking on the road. They by mistake bump into each other. They, immediately do not start hitting each other. What really happens is, at the bump, the person who wasn’t looking might say “oh, I’m so sorry” and the second one might respond “no worries mate” and both move on, but if the first one says “are, kya re?” the second one might say “Sorry mate, my apologies” and it will still cool things off.

However, if the second also gets enraged by the first person’s language, it will. proceed to so use of verbal language, it many finish there or it may lead to a physical fight… or worse.

Similarly, in the markets, it was small incremental steps that took me there, and I guess take most people there.

Covid lockdowns started around 18th March. I was locked up at home and after a couple of weeks I was quite frustrated. One of my friends called me and while chatting he said, dude, I’m thinking of getting some alcohol to pass time in the evening, and I was like yeah, that’s a great idea.

So both he and me (both of us had stopped drinking everyday a few years ago) were back on the bottle by next day.

Next, I get drunk and every evening look at US stocks, got active on twitter, started listening to some hedge fund subscriber service (:zipper_mouth_face:) who had called the crash, and felt oh this guy knows something. Paid a fee and became a paid subscriber of his service.

He would send out 4-5 day trade alerts everyday. I would trade them, then I activated my futures and options account.

I was losing money on his subscription service, and in the meanwhile I had connected with some day traders on twitter. So, I stopped taking his signals, and then I started day trading using futures on my own.

Then I used to play cautiously and got back what I lost. From there I was glued to the screen from morning 8 am to night 12 pm (yes, drinking from 6 pm onwards) and trading drunk. We still could not leave home, and being a type of personality that cannot sit around doing nothing I had found something to do, which kept me engaged through the day.

Then I started making 4-5% a month minimum and some good months, I clocked I think nearly 12% a month.

This is where I was running calculations of 5-7% CAGR PER MONTH for 20 years and I was one of the richest men in the world :joy::joy::joy:

Then I started breaking my rules, I started taking directional bets via options, became a macro trader as well.

Well, I need not explain further :joy: on what happens. This is exactly how retail traders lose money. Day trading stocks, commodities, futures and directional opinions expressed via 2-3-4 daily trades via options.

So the inevitable happened. It was bound to happen.

Luckily, the lockdowns were over, I sat down with a cup coffee one morning, thought about everything, for a few hours, (played everything in flashback, saw my mistakes) and closed these accounts.

About 3 months ago, I opened investing only accounts, and have been slowly deploying capital to good long term investments.

I also bought a house in Pune this year and may move back to India soon.

Point is, I have lost and made money on multiple investments (private businesses and public financial markets). If one did not blow up everything then it may be a hard lesson, but if god has been kind that we were not finished, we will earn again, things will again be fine. It hurt me mentally initially, but we get over it. No point crying over spilt milk. Look forward.

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Liked very much your honest confession, very few people in stock markets are able to understand their mistakes and only few of them able to take corrective actions. I only follow ine things" Buy a large business when sector, stock is out of favor to make your odds most probable for a desirable outcome

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That is not true. The portfolio that I have shared here is giving around 18% CAGR. It is possible to obtain over 20% through long term investing. It is also possible to make money day trading, manually as well as algorithmically. You can read about those who have been doing this successfully in market wizards book series.

I believe that the difference lies in risk first approach. Most people trade focussed on gain. They become impatient and want to earn big money quick, and in doing so lose sight of the losses they will take if they are wrong. If they are lucky, they manage to avoid big loss for some time, but luck runs out eventually and they end up losing an amount they can’t afford to lose.

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Gains first, risks second is the exact mistake that I am trying to point. I do not know whether the likes of Kotak Bank, Asian paints, Dmart etc can keep growing at 20%. But they have very good execution, solid competitive advantages, and management with high integrity. They only have valuation risk, which is why they will always find buyers even when the markets are falling. So the reason I have them in my portfolio isn’t because I am aiming at some x% gains, but because they minimize the risks I am exposed to. Think about risks first, and let the gains take care of itself.

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Interesting discussion…it’s always good to aim higher…I have read your views and in various threads and like them…could you direct if you have a portfolio thread? Would really like to know which kind of businesses you target to get this kind of return consistently maintaining proper risk management as well…also what percentage of your networth you put at risk to get 25% or higher returns?

Btw interestingly the same stocks you mention going fwd cannot give required returns of 15%+…the ones which @Divyanshu_Bagga mentioned aka Asian paints, dmart etc. Gave 30-35% + returns over incremental capital deployed over just last 3 months or so…not saying this can be repeated consistently but just a perspective…

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Not financial advise. Just an opinion. Have seen 3M trade between 19K and 23K for quite some time.

The (relatively new but now old) trader in me says, buy at 19K, more at 18K and even more if it gets to 17K. Offload at 23K.

Don’t need to wait for 24K.

I would not short it. Only go long every time it hits those ranges.

Good risk reward imho.

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Right now want to sell my biggest winner Apple to buy more of Shopify (my biggest bet).

Staying away because I had some wine. May do so tomorrow if it still makes sense, when not on wine. One of my new rules :slight_smile:

Have been buying Shopify over the last 3-4 months hand over fist.

I use them so I understand their business model and stickiness.

I’ve been buying mostly US stocks as not many in India make sense at the moment.

My portfolio has 4 stocks and 80% plus is Shopify.

Not financial advise. For learning and logging purposes only.

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Sir are you using IND money app for buying US stocks?Please guide us, I am also thinking to invest in US market.

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I don’t live in India at the moment.

However, since I plan to move back to India soon, I checked with my broker (Charles Schwab) and they said Indian’s can open and/or keep active their accounts if they live in India.

Only thing that would change is, I will have to pay the capital gains tax as per Indian rules.

I am sure any Indian can open an account with Charles Schwab.

INR depreciates against the USD always (since our independence) so I have no doubt that INR will always depreciate against the USD. That itself provides a 4-5% gain every year (not each year but on a CAGR basis).

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By typing out our own thoughts we learn so much.

After I wrote the above, I realised;

  1. US or Indian Index will give 12-13% on a long term CAGR basis.

  2. If I only invest in US Indice ETF’s (even the one’s available for SIP via Motilal Oswal (if I’m not mistaken) and whatever else there may be…

Adding rupee depreciation of 4-5%, I can get long term results of 17% ~ 18% CAGR.

Why would I even bother with direct stock investing unless I came across a very very compelling opportunity.

PLUS THE NASDAQ IS DOWN 30% AS I TYPE.

Seems like a very good return for doing nothing. Warren Buffet was right about Index Investing.

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There is however one problem.
US markets are cyclical, they give good returns once a decade, when liquidity finds a way. Whereas, india is a secular growth story. Where top banks are growing at 18% cagr.

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You might see Nasdaq at 30% fall, but do u still feel that all components are available at good valuations…Nasdaq is still 16-17% high compared to pre covid levels…what makes u think US indices will be 12-13%, is it because data shows that in last 10 years which happened to be one of the biggest bull phases in US equities…In last decade, US nominal GDP (real gdp+inflation) grew at 6%…Normally index grow at nominal GDP levels, so US index ran faster than their growth…comparitively, with 12-13% nominal GDP growth in 2010s India index was growing at 8-9%…rupee depreciation will definitely give u 3% additional cagr for US investments, but 9-10% would be the ideal expectations including currency returns…India is poised to give better returns than this

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