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.

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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.

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.

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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.

This is just to add further about parking cash/funds:

An investor can park the cash in Overnight Funds or Safe Liquid Funds like PPFAS and Quantum Liquid Funds. These funds will give you 3% to 5% returns only based on RBI rates but those are flexible and you can withdraw funds when ever required within 1 day.

I have been using this strategy for about 3 years now and I am satisfied with this strategy. I do not bother about returns as I consider this as a cash component of my Direct Equity Portfolio, so my aim is safety, and liquidity.

Fixed Deposits of large banks like HDFC Bank, ICICI Bank and SBI are also good candidates as Post Tax returns could be 4% to 5% and liquidity is even better. ICICI Bank allows partial withdrawal as well. Only drawback is you need to keep adding more FD(s) and keep closing those online when you need funds. Hence Overnight Funds and Liquid Funds could be better.

I do not bother about returns generated by this cash component as any way it is part of Direct Equity Portfolio and will generate higher returns once invested in stocks. I do not invest this cash in any other Index ETF or low beta stock as you may encounter negative returns over there. When market corrects sharply, these low beta stocks also correct many times as per my experience. There is no point in taking such risk in my opinion.

Note: This post is just continuation of parking funds. Nothing about any new strategy.

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may you explain your strategy in detail.

A practitioner's analysis of buying statistically cheap companies are a few examples of what I do.

Hi All,

Is there any forum which discusses ideas for Long term portfolio of stocks which have good Sales & PAT growth for past 10+ years, ROE/ROCE stable or improving for past 10+ years, No Corporate governance issues, and good tail wind ahead?

I know that, this forum itself is a good idea generation forum but I am also looking for other forums on similar lines.

Though I am mainly an investor which believe in Buying and Selling stocks from 3-4 years perspective, I am also looking to hold few stocks for long term i.e. beyond 10 years as well if the story looks good for 10+ years.

I am looking for all Large Caps as well apart from Mid Caps, which still have long tail wind ahead and still has capability to grow further, with sound balance sheet, Low Debt, Good corporate governance.
Generally I do not come across any genuinely good Blogs where such ideas are discussed. Most people just mention few ideas based on recency bias. For Example, if Infosys has done well in last 5 years then they say that, it is long term story without any solid reasons.
Similarly they will mention names like Asian Paints, but again no solid analysis is presented.

So, it seems that investors still do not have sound framework for identifying long term stories without any recency bias.

Note : I may be wrong and this forum itself may have such ideas discussed, but I may not be aware about those threads. I am not looking for ideas which sound good for 4-5 years only but much beyond that with sound justification and in-depth analysis. For many people, SUN Pharma, LUPIN were these kind of stocks but they ignored the risk of US FDA and Pricing Pressure.

I don’t think anyone can say what a company can and will do after 10 years. To give you a hypothetical example, a simple thought of diversifying into an unrelated sector can occur to the owner of the company in the middle of the night, and he starts creating a plan the very next morning, and in 10 years, 40% of sales can come from this midnight thought.

A lot of things, technological, financial, geographical, constitutional, personal, familial can change in 10 years. So I think it is hard to say what can change, I think it was Jeff Bezos who said that the question of what will not change should be asked. Also, if there is no support of technology, governments, even people, sunrise sectors may not see growth as believed.

So while one can surely think and plan for 10 years, those 10 years should be divided into 3x3 or so. And if a company is performing more than our expectation, and if we are confident of the performance going even higher, we will always have the opportunity of buying more, but for higher price, which many follow. Some average down, some average up.

And there are a few threads more than 10 years old, you can look at them to know more about investing for 10 years.

And some investors too change with time, not all but some. What seemed like a good story may start looking like normal when one gains experience and finds better opportunities. Not everyone can afford staying invested for 10 years, even if they can, one may not be too happy with the result after 10 years. Age of the investor plays a role too. So there are some moving parts.

Just my thoughts, and I am a long term investor too along with short term views. I also want to see a few multibaggers in my PF, the kind of multibaggers which compounded slowly, but steadily over the course of 10 years, whose journey when I look back makes me happy.

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Buy, hold but don’t forget

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