Hello friends
I have a portfolio of around 15 stocks. While adding stocks, i did not allot any stock more than 7 %. But now one share (Saregama) increased and its weightage is now around 19%. I have confidence in this company. What to do now, should I sell small portion of its stock ?
What should be the maximum exposure in a particular company ?
Thanks
- Do you need money? Then sell some of the holdings.
- Do you have a stock in the portfolio that you have higher conviction? Another stock that has the potential to be better than your current top stock? Then trim some and invest in the higher conviction stock.
You do not have any legal obligation to have a limited allocation to one stock. At various times investors like Munger, Nick Sleep had portfolios with a single-digit number of stocks. I think Nick Sleep now has 3 stock portfolios. If you have a high conviction, just let it ride. It is the characteristic of winners to be the lionās share of the portfolio.
PS: Not investment advice, just my opinion and what I practice.
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Thanks for elaborate explanation @anishdvsy . Seems like i need more knowledge about the business to build higher conviction. 
Hello members,
I would like to understand the general trend of exit route of preferrential issue of equity shares or warrants holders after their lock-in period ends. Do they sell in the normal market or there is separate trading window for such exits such as bulk/block deals? In general, what is the impact on share price on such exits if any?
Regards
Hi, I am not timing the market. But considering higher valuations of the most of the companies, I want to keep some cash to invest in case market drop 10-20%. Cash could be from partially profit booking or saving as I donāt see much investment opportunities at this point of time.
So I need suggestion on where to keep that money as this 10-20% drop may come in 1-3-6 months or may be after 1-2 year as we donāt know. Shall we put this money in liquid fund or short term debt fund or is there any other instrument which can return 6-8% type of return and we can use it in case market goes down.
As the interest rates are down, you will not get 6-8% return for such time frames.
If the objective is to have the cash ready for market falls, then I would say liquid ETFs, not even liquid funds. As sometimes, market falls for only a couple of sessions and resumes its uptrend quickly, so being in liquid ETFs is helpful in such scenarios. But the downside is obvious, a 2.5% return.
If one thinks market will fall gradually and he will have plenty of time to buy, then liquid funds are good, but here too, they will not give 6%, in the current situation, as the duration of bonds is very less.
As we move from liquid funds to other categories, the risk along with the return increases, as the tenure of the bonds increases, with higher return bonds whose tenure is also higher, there is always a possibility of a bond downgrade, a default, there by loss of capital.
So objective matters and risk appetite matters, with debt funds too.
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Dear Kumar,
The value of this portion you mention comes from the optionality it offers. Iād say donāt keep returns as a criterion when you evaluate where to park these funds. For the optionality to be effective, the key factors to consider are safety (i.e. the funds donāt reduce due to say, credit risk), and flexibility (i.e. the funds are highly liquid). Returns on these funds can be ignored, or if you are really keen on it, it can be a veeeeery distant third factor.
All the best.
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$Intellect Design Arena Ltd #redflag
Out of total FY21 consolidated revenue of 1500 cr, trade receivables at year end was 186 cr and unbilled revenue was 456 cr.
Gross fixed assets (incl intangibles) at year end was 338 cr and CWIP was 344 cr
100 cr was parked under Prepaid expenses at year end
Employee exp payable at year end was 90 cr (this is apart from provisions for retiral benefits). Total employee exp for the year was 800 cr.
Someone added this on Multipie, can someone please explain how it is arrived that it is a red flag? Exactly what is being put together using this data? Thanks!
@ashishp2010 - Itās next level of equity research. Here is a brief synopsis for you to start with:
What does a Red Flag mean? Any approach to over/under-book Sales and delay/expedite Expenses to improve/smoothen the immediate/future profits by mis-using the flexibility built in the accounting principles.
In the short-run, managementās discretion can be accommodated by the accounting principles. Using discretion, empowered managers may decide to move Income and Expenses to various accounts on a Balance sheet.
Accounts you highlighted are all from the Balance Sheet (B/S).
- First three belong to the Asset Side (Receivables + unbilled revenue, CWIP, Prepaid Expenses)
- The last one belongs to the Liability Side (Employee Exp Payable)
Aggressive management could use these accounts to window-dress the revenue/expenses. Letās take receivables as an example: Must achieve current sales target ā Sales push ā Higher receivables | Ballooning Trade Receivables in the B/S.
Result: Better sales in current period and folks can collect BONUS checks.
Consequence: Future sales booked today. Chances of higher product return in immediate future. New Qtr and new push to meet higher sales target ā Future sales might suffer.
Test: Check ā% change in receivablesā w.r.t ā% change in Salesā. Ratio of <= 1 is okay else investigate.
Note: In case you are interested to learn & your basics about financial statements are in place, start with the book Financial Shenanigans ( by Howard M. Schilit, & Jeremy Perler).
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Many Thanks for responding Surender! Appreciate the details and would definitely pick up the book! 
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How ETFs works in trade wise?
If i buy a stock, then it is something which is sold by other guy. In case of ETF, is this the same setup or the AMC can add more/reduce units in the market by buying or selling their units? If so, what are the restrictions do they have?
check this
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Why do people get uncomfortable when a portfolio goes down more than 30%? I watched interviews of Kenneth Andrade and Terry Smith, and they both say that in their more than 30+ investing carrier, they can never understand the behavior of investor when their holding goes down 30% even though initially investor told that they are long term investor.
Referrence
1:16 FUNDSMITH Annual Shareholders' Meeting February 2021 - YouTube
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Because loss feels real, even if it is notional and not booked. The PF may very well become profitable, but there will be a wait. And as the wait increases, so will the restlessness, the doubts, the distress.
When a PF goes down by 30%, it does not generally mean that, every stock has fallen by 30%, because some stocks may have doubled and some stocks may have fallen by more than 70%. The doubled stocks may grow even more, but stocks which have lost 70% of their value may take very very long time to come back, if at all they come back. So the more the size of the PF, the more the intensity.
And what if it falls more, what if it loses half of its value? When you have the shore in sight, it is just a matter of time before you reach the shore, but if there is no shore in sight, how hopeful can you be, and for how long? Just like the market does not like uncertainties, we donāt like too, because the market is nothing but emotional beings like us. Better to have an answer even though bitter, than having no answer. Hope is a strategy in real life, not in investing, because you might be proved wrong.
And if the PF is not linked to any financial goals, not associated with day to day life, it is relatively easy to stay calm. But if does, it is hard, because all future goals and dreams start to vanish.
So there is a mathematical angle - loss is loss if booked, a financial angle - if we can afford that loss without effecting our lives or not, and a psychological angle - it bothers all differently.
Just my thoughts.
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I am investing in the stock market for around 5-6 years and predominantly via mutual funds. My goal is to keep investing for a long term in order to get compounding effect. Since equity MF are capable of generating 12-15% and less hassle of stock picking, I have built up SIPs in MFs. Alongwith that, I have ~15% of my portfolio exposure in direct stocks which arenāt generating good returns. I want to understand is my strategy sustainable over a long term. Should I start investing time to learn the nitty-gritties of stock picking which would help me generating a sustainable return so that compounding effect never stops.
Please advise
Paste PVC prices were up 0.4% QoQ and 8.9% YoY to Rs120. Chemplast buys
EDC for paste PVC, which is up 25.1% QoQ / 149.5% YoY, to Rs66. Paste PVC -
EDC spread stood at Rs10 in Q3FY22-TD vs Rs32 in Q2FY22.
What does it mean? Kindly elaborate.
Raw material [EDC] price increased substantially compared to the price of the final product [Paste PVC]. Net Result - Spread/Delta/Margin went down.
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Hi. Welcome to the Valuepickr community.
If you are into a full time job or running your own business, then I would advice to only invest via mutual funds. One should only spend time in learning the art of investing if one is really excited about the stock market. If that is not the case even slightly then its better to let mutual funds do their work instead of trying to manage oneās own portfolio.
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Very well written
I agree with your thoughts