Thanks for the suggestion, good insight and options.
I like 3M India (Mainly due to unique problem solving ability -fit for purpose) but due to present industrial down cycle there is chance of re-rating but its in my watch list surely looking to add at better valuation.
Regarding banking stocks, i have less confidence as of now (will wait till situation gets clear) although well established, sector leaders, good management.
I think i won’t dig deeper into Government companies and companies whose performance get vastly affected by government policies.
After few discussions with friends and reading other blogs on VP decided to add 1) IEX 2) Nifty 50 & Nifty Next 50 ETF
Removed HDFC AMC and planning to replace with CAMS.
It will be interesting to understand the thought process behind change in your strategy from concentrated to extreme diversification - index level diversification.
First of all I have replaced AMC with other better oppo comapny. In what sense you are asking about index level diversification
Adding Nifty and Nifty Next.
Some of the members were opinion to add index so thought to add but not added.
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Hi I am new in the forum and like the idea of trying to pick a few double in five year stocks. I also sell covered options on these stocks to generate extra returns. Two of my picks are Reliance and Bharti Airtel which are in telecom because I expect this area to grow and these two names to have dominant market share. Wecome thoughts.
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Frankly speaking, I am not tracking Airtel. I do have some holding in reliance industry which is mainly due to retail and Jio. Will not able to provide more inputs on same 
Good choice. HDFC AMC could also have been substituted with something like CDSL/IEX, whereas you might think about replacing Lombard with either of the top 2 life insurance players. On similar lines as what other members have suggested, you could limit exposure towards financials; maybe try playing financials by replacing SBI Cards with something like OFSS.
Here are some points that I could think up:
Consolidation—Much like the US airline industry in 90s and 00s, the Indian telecom industry has seen multiple bankruptcies, mergers, etc. and is now approaching a steady state, except VIL, where competition is less likely to be as fierce as in the past, especially from a pricing point of view.
The next 300 million—are large data consumers but are also very price sensitive. Translating market share into higher ARPUs is probably not as straightforward as it seems. I don’t think brand loyalty is high in this segment. Growing ARPU above the per-capital income growth of this segment doesn’t seem probable.
Capital Intensive—The industry is capital-intensive. Continuous investments in new wireless generation standards requires commitment to the business, and a strong balance sheet. 5G investment is likely to be debt-financed.
Free cash flow generation ability—Both Bharti and Reliance have struggled to generate free cash flow over the last few years. Last 5-year ROCE for Bharti is 6.64%, which doesn’t cover their cost of capital. The telecom industry has grown over the last 5 years, measured in terms of usage, but Bharti’s revenues have stayed flat.
US airline ticket prices dropped ~45% in real terms between 2000-2014. Although the airline industry generated high free cash flows after 2014, their stock prices didn’t do very much.
Hard to see telecom businesses in India growing above per-capita income growth soon, in which case buying the index is a better bet. If I am wrong, then it’s better to wait out the first round of price increase by these firms. If return metrics improve, then that is probably better entry point. Again, in the
US airline industry demand did not diminish when ticket prices increased.
Another risk: VIL gets access to rescue financing, and price competes for market share.
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Already replaced HDFC AMC with CAMS in Nov
I found this thread interesting.
Would be good to know how this portfolio has performed (or not) w.r.t mid /multi cap funds.
The reason for asking this is most of these stocks are already part of popular multicap /mid cap mfs.
The question to be asked here is whether there is any alpha to be generated via self allocation vs a professional fund manager.
Regards,
Abhijit.
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