Coffee can method

Kindly check out the following link - Berkshirehathaway Shareholder Letters
I am assuming this is what you are looking out for.

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Setting target on a public forum really helped in becoming more disciplined investor during 2022 calander year. While I set a target of less than 10% annual churning, actual churning was about 6-7% (including few opprunistic trades in buybacks and IPOs). Only 2 exits (about 2-3% of total allocation) and 2 new stock additions in 25 stock LT portfolio in entire calander year and most of the incremental funds went towards increasing allocation in existing holdings. Hope to continue with similar discipline in future.


Can some one specifically discuss any new script poping up in screener according to Saurabh Mukherjee’s sales n roce filter

You have demonstrated the strength of your conviction!!

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I have a simple question.
Lets say I have 5lakhs cash which i want to invest in few stocks for long term but valuations are too high now, so i will hold. now where do i keep the cash? FD is bad option bcz of 30% taxation. where can I keep except risky liquid fund that give me liquidity plus safety n return.

Index valuation is high but one can find low beta and beaten down stocks. The ones that do not fall much and keep chugging along.

PSE stocks are other option. But many of these are expensive now so adding down in low quantities is advisable, in case they fall.

If these stocks also give dividend, which PSEs do give, that could be your additional margin of safety.

You cannot expect so much - liquidity, safety and return for your time frame, which I am assuming is less than 1 year. You have to sacrifice one or the other for such small time frames.

If you want can monitor the market in real time, take advantage of a single day falls to the tune of 2-3%, you can invest in liquid ETFs, but the return will be low, but you will have immediate liquidity of 80%. If you are of the view that market will fall more than 1 day, or for a few days, you can invest in liquid funds or even money market funds, but there could be exit load, and instant redemption limit, you have to check that. If you think the high valuations will sustain for many months, then you can look at UST funds too.

So depending upon when you need the funds and how you the need the funds, you can look at options available.

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Usually the 10 year T-Bond Rate is the risk free rate, that people use to park their extra cash.

I would say, put it in your savings account and enable auto-sweep on. Overall cash would yield an FD interest rate, but there is flexibility in taking funds out whenever you need.

Hope this helps!

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Liquid funds are not risky. They are the best option to park excess funds temporarily.

You can also look at arbitrage funds if you intend to hold for more than 1 month. From a taxation perspective they are treated as equity funds.

They are considered the safest and rather sedate, as they normally don’t give more than the savings account interest. Great place to park money which you may need at short notice, say a week or so, when you can’t afford to have the markets dip on you suddenly.

Money you have saved for your daughter’s marriage or buying a house, which you may have taken out of stock or mutual funds investments may be invested here.

Correct me if I am wrong.
(I am afraid we have deviated from the main topic.)

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3 choices:

  1. Wait for valuations to be of your liking
  2. Find some other stocks which fit your criteria
  3. Sell “cash secured puts” (i.e short a put at a much lower index value) expecting it to be actually hit (at which point you deploy your capital and have beaten the market as you are collecting premium). Keep rolling over at the same strike if not hit.