Investing journey of an imperfect investor

Investment Learning
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Using this thread to write my thoughts on my investing journey through the years. Look forward to seeking feedback on my thoughts, investments picks, thesis and anti thesis.

I consider myself an amateur practitioner in the markets and have seriously started taking investing as a journey to learn as much as I can.

My portfolio in current state consists of concentrated bets and I look towards churning that only in case of my thesis failing, capital needs for some other idea in case my allocation becomes really heavy in some stock.

For selecting a company, the most important parameters for me are its TAM, the operational skills of its management, a little bit of stage analysis and utmost important the management integrity.

Of the time I’ve spent on valuepickr, I’ve been deeply inspired by the learning imparted by @phreakv6 and @hitesh2710. I know investing is a lonely journey so it’s always good to have a guiding light in case you don’t want to get lost.

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My small portfolio as of today with allocation and thesis :slight_smile:

Macpower CNC- Manufacturing is the buzz word and CNC machines are needed. Macpower has been the heaviest bet in my portfolio. In hindsight valuations can seem to be very rich but here I’m okay to add as much as I can. I’m willing to go wrong here. My thesis is- Excellent Promotor, Operational Excellence, No debt, Prudent Capital allocator. It’s silly to be in love with a company and I might look like a fool if this doesn’t deliver what I’m anticipating. But when the promotor even at industry best margins and asset turns talks about excelling further with growth and he has clarity when he gives a reason, it’s worth taking a shot. 35% allocation in Portfolio

Shilchar Technologies- Transformers transformers all around and a lot of companies to pick. I personally feel that this one is taking a pause before going ballistic again. The management has done a capex with internal accruals and if one does the maths, even if it’s a transformers company, their margins are to be envied. **Personally don’t like their limited interactions with the investors **. But my average investment price gives me a cushion to take a pause and reflect if things go awry. 20% allocation in portfolio

Jash Engineering- Water is the new Gold and all likely it’s going to remain so. I feel here the TAM for the company is huge as alluded in their concalls. They are at the cusp of what they can deliver. Exports form a major chunk and they have established themselves in key geographies. They don’t need to go all over the world and yes, India is still not even in the frame as far as the potential is concerned. There might be a lot of business coming from here. The management has recently announced a split as well. Maybe they’d like more people to be a part of this journey :smiley: 10% allocation in Portfolio

Windlas Biotech- Now Pharma is not my cup of tea but you don’t need to be a rocket scientist to understand a a management. This is one instance wherein I’m separately banking on their three different business verticals. I have my bet on the promotors as well. They have groomed their CFO to become the CEO. Not many have the courage and heart to do in small companies. I feel with the Pharma cycle they’ll do well. And yes being a small company they did a buy back too. Talk about capital allocation :slight_smile: **10% of portfolio **

Ethos- We will grow, our aspirations will grow, our hectic lifestyles will push us to get luxuries to keep going. When it comes to watches who better than Ethos. Retail businesses are expensive but what sets ethos apart is that to crack this business there are many many hidden barriers to entry. Trust, assortment, service and experience. They are top notch. 10% of portfolio

HBL power- There’s been enough written about this by the stalwarts. Safety is going to be a big push. I think I’ve been one of the late entrants but nevertheless technically as well I feel it’s poised for a long journey ahead. 5% of portfolio

Techno electric- Have trimmed this down a bit as I feel it’s run up quite a bit though I have full faith in the management commentary as well as how data centre business will shape up for them.**5% of portfolio **

Frontier springs- Riding this as a railway theme small cap company. Plus their capex and management guidance of 500 Cr gross revenue means that a sharp run up might be ahead. **3% of portfolio **

Have a little bit here and there in a few watchlist stocks. Sometimes I just buy a token quantity to test if I’ve been able to technically gauge how stocks are moving.

My long term goal is to use techno funda and I feel that in techno I still need to learn a lot of funda :slight_smile:

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Aug and Sep Reads

As the roaring bull markets keep on soaring, an investor like me ought to work within my circle of competence.
It’s always good to go back and re read some literature and some fresh literature. The learning should never stop and markets can be a brutal teacher if one is complacent.
To replenish my repertoire and to wipe off the dust of a lot many books which have been neglected by me, I’ve made a promise that I’d go through and try and complete the below books.I’d also try and pen down what learnings or key take aways for my investing I’ve been able to take from them.

How to make money in stocks
Arriving today
Master class with super investors
Chip wars
The little book of valuation
Capital Returns

It’s a tough task to be not hooked onto the markets and go about a disciplined process for long term and with no new capital to deploy there’s nothing much for me to observe and take action upon. My portfolio would likely get a run for atleast a quarter. In foresight it’s better that I be prepared to take on any turbulences that might occur :stuck_out_tongue:

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Not much activity in the portfolio or adding any new stocks. I’ve deliberated upon the construct and weightage. Have taken a few calls basis cash requirement as well as market condition.

Have completely exit Techno electric- There’s nothing wrong with the company but I just feel that I’d get an opportunity to add this again provided valuations become too attractive. Otherwise also it has given me decent returns and I was anyways not looking to pyramid up and had instead been pruning the position.

Added some Ethos- I feel that promotor selling is no longer a surprise and stock has been slowly and steadily once again approaching its high. Q2 results and Q3 results might pull this up further. Also the MoS for me is huge.

Some other stocks in family account invested- I’m taking a conscious call not to add any new names as of now in my portfolio. Some of the stocks in family portfolio that have turned out well are All e tech and Ceinsys.

All e tech excited me as a company when it had a market cap of 500 Cr and around 150 Cr cash equivalent on balance sheet. Plus a very solid promotor and high margins business. It was a no brainer at those levels and hence invested.

Ceinsys was trading at a PE of less than 20 with a growing order book and prospects of Allygrow business an added bonus. The company recently did its first concall as well and the stock has rallied quite a bit in the past two months.

Both the above businesses are in family account and were added at much lower levels. I still feel there’s lot of run up left and I’m particularly bullish on the promotor of All e tech.

P.S. I might prune a little in Macpower basis how the market progresses.I’m still very bullish but perhaps 35% allocation might get on my nerves if it trends the way it has been over past few weeks.

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Added a little bit of Shilchar and Ethos with some cash freed up from Techno electric. Had been toying with the idea of trimming some Macpower but then couldn’t find a single reason except stock movement to justify the action.

Reading Capital Returns and Masterclass with Super Investors has been a refreshing change. Investing is such a funny domain that the same thing read and then reread can have a different implication in what you construe.

The current run of the markets when stocks are running and anti thesis is not having any impact can lead to a delirium for any investor. There are a lot of new ideas popping up but everything seems to have had a stellar run.

Would love to exchange notes on the experience of others as to how they are navigating such a bull run when almost everything seems to work and almost nothing seems to fail :slight_smile:

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Have completely exit Technoelectric and Frontier Springs with some reduction in Jash as part of profit booking wrt small caps. I’m still heavily invested in Macpower, Shilchar, Ethos, Jash and Windlas but am not adding onto any new positions or new stocks and waiting for market direction wrt small caps.

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My decision to not add something new which I took over a month back was a difficult one.

Infact I had been toying more towards the idea of booking some more profits and waiting for some correction to add which eventually happened this month.

There’s nothing more to add since my last post except the fact that I’ve added some Macpower and Windlas post the last post and have again taken Jash Engineering back to 10%.

In hindsight I shouldn’t have sold Jash but then was excited by the idea that due to stock split there might be some booking and it actually fell from 2600 odd levels to close to 2050 levels.

Have completely sold HBL Power to raise some cash, since I wasn’t planning to add into that right now.

As of now on allocation basis the portfolio has only 5 stocks with Macpower and Shilchar-65% and Windlas, Jash and Ethos contributing 35%.

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The decision to not deploy any additional capital since September turned out to be good in hindsight.

Also,the last 1 year handling 4 portfolios of my family has been a very good experience with each having a different construct across sectors & stocks :slight_smile:

Enough has been said about why the market has seen so much of correction etc but in hindsight some of the trends became clearer with Q2 results. The slow GDP growth & other factors added trouble to the paradise.

Regarding the portfolio, have made some adjustments to allocation without any additional cash being deployed or taken out since last update:

Shilchar Technologies- 30%
Macpower CNC- 30%
Jash Engineering-18%
Windlas Biotech-14%
Ethos-8%

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Have made a small video on psychologically navigating the markets. Not covering anything quantitative but one of the ways how I look at portfolio construction drawing some parallels from sports.

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Still holding onto cash & did some trimming of Ethos, part of which I deployed into Jash, Windlas & Shilchar

This week should be done away with most results & I have been very stubborn over the last 1 year to not make major changes but that has also stopped me from making unnecessary mistakes.

Shilchar announced its results & how I see it, it was on expected lines. The management commentary as well action point towards no divergence except no new capex has still been announced which was alluded to in last quarter. Apart from that everything remains as committed. My thesis had still not factored in any additional capex announcement as was more towards guidance of 750-800 cr with new added facility.

As of the current week, will make some calls whether to still hold Ethos at close to 6% & the decision is more to do with Management’s behavior. I still believe it’s a very good theme & there’s less to lose & more to gain.

Note: Transactions as stated above. No buy or sell recommendation.

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With the result season over & many hits & misses around, it was a satisfactory phase for me navigating this tough period.

I did some buying albeit very little & that shouldn’t be of much discussion since I would still wait before deploying funds actively.

The average investor inside me has helped me navigate the last 6 months & I’d call myself lucky to have not played into the hands of the market & sticking to my stance.

My biggest mistake though has been the heavy allocation towards Macpower CNC & not paying any heed to the warning signals. But then that’s how one learns. I could have trimmed but in hindsight I know I wouldn’t have exited. The results were a shocker but then one side of the thesis tells that one can’t always measure such small companies’ basis quarterly performance only.

Happy that other businesses have played along on the lines of what my expectations were & every beating was an opportunity to smile rather than lamenting that I had missed capturing something in my thesis/ anti thesis.

Biggest & Luckiest escape- Staying away from the SMEs. Only hold All E tech in family accounts as stated above.

Disc: No buy or sell recommendation. Just a note to keep a tab on my journey & my decision making to revisit later.

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Where do you see the macpower from medium term growth perspective based on recent concalls and your understanding of the bussiness? Bigger CNC players like Jyoti seem to have very good orders in hand though valuations are very high.

Thanks

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I still have faith in management & it looks like they are making all the efforts to take this to next level. Last 2 quarters results have been subdued particularly Q3.

They’ve ended up getting some good orders & hopefully Q4 will be bringing them on track.

Having said that there are many moving parts & if they come together business is poised to do well. The growth has slowed down but if things get on track, it can be one of the companies to watch out for.

I do believe that the worst is behind for the company but will keep a close eye on next 2 quarter results & order book movement.

P.S no recommendation & my expectations/ Projections for this FY have failed miserably. But looking at Jyoti concall & Macpower concall the tailwinds are very much alive & kicking & the promotor being a very good capital allocator, he can really overcome these short term obstacles.

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Thanks for the reply. Based on the available information, I have the following estimated revenue numbers for macpower. Can you have a look at it and share your feedback ?

Fiscal Year Estimated Revenue (INR Cr) Machine Capacity Key Growth Factors
FY25 (2024-25) ~INR 400 Cr 2,000 → 2,500 IMTEX orders, Corporate sales
FY26 (2025-26) INR 450-500 Cr 2,500 High-value machines, Defence, Exports
FY27 (2026-27) INR 600-700 Cr 2,500 → 5,000 (New plant) New land expansion, Foundry, JVs
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I won’t hazard a big guess here but I feel below will be the business scenario:

FY25- 275 Cr( Would be surprised & happy if they hit 100 Cr in Q4). Even being in 90s will take them to around 275 Cr

FY 26- Around 375-380 Cr- 400 Cr would be a big big outperformance & picture will get clear by Q1 & Q2 numbers

Won’t take a far shot guess at FY 27 & new land capex will consider once land is allotted & capex is announced. Hence FY 27 peak revenue will end up around 450-475 Cr.

Now these are my assumptions & when I had covered Macpower I had my FY 27 bull case projections pegged at around 550 Cr but have revised it now keeping in mind the trajectory as well as the current state of the business

Having said this in case 375 Cr & 450 Cr plays out then also we are looking at a CAGR of around 30% which is a fair estimate to have.

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The decision to not deploy any significant additional capital since September turned out to be very good in hindsight.

In hindsight I could’ve booked some more profits but then the only stock which reacted very badly & justifiably was Macpower CNC which I felt was very brutal too. The best time to sell it was perhaps post Q2 results & their commentary wherein I had certain doubts. But these are the fine margins in investing.

Now no one could’ve predicted the impact when the Trump madness would come along & we are probably destined to see a lot of volatility.

For the next few weeks, my focus as it has been over the past few quarters would be to see earnings, outlook and possibility of markets making more money on additional capital deployed.

It would be very stupid to make any speculative statements here as volatility could remain a norm & basis my understanding it’ll be earnings, earnings & earnings that would matter. Also chances of rerating if any have to be taken with a pinch of salt & possibility of derating for few sectors/ script has to be swallowed as a bitter pill.

It’ll be interesting to see how different sectors & the managements of the scripts read into this uncertainty. The impact wouldn’t be as linear as the heart & the mind would tend to think. I would be taking the approach of waiting & looking from the sideline, till the time I feel, it is safer to take a little risk rather being completely on the sideline.

The discretionary space in terms of value retail has been something I’m tempted to look at particularly the likes of V2 retail in addition to luxury retail like Ethos but then the multiples & market’s mood have to meet somewhere so that the investment doesn’t turn sour :slight_smile:

Apart from that few companies like RACL Geartech that were facing headwinds & had turned a little positive were on radar but now again, things have turned so uncertain.

Disc: Just a writedown on the past 2 quarters & present outlook of how would approach the markets. No recommendation to buy or sell anything. The core portfolio remains the same with some profits booked & some rejigging in allocation.

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As the result season draws to a close & midway through the analysis,can’t help but ponder about what’s the mood of the market?

Running mind through themes & stocks & scams,I feel better that treating this as Roland Garros was the ideal choice.

There has been relentless test of patience for the investors.

Markets have been playing around,earnings have been not so great,but hasn’t it been the case for 4 straight quarters now.

War,trump,chest thump by promotors & then falling QIPs,loads of cockroaches from big,bigger to shining Souls,this has been a fascinating phase,which is to state that this will take time but give time,a perfect clay court play.Long rallies& difficult to find winners.

But alas as the greatest clay court player Rafa proved,if you respect the field so much so, then no matter what you turn out to be the winner,the court supports you as the greatest ever. You just need or rather needed to hang in there.

And while it’s another lukewarm result season,we aren’t exactly running,I just feel the markets will reward now. But just a reminder for most that you are playing the Roland Garros & it’s not Wimbledon yet :slight_smile:

For the sectors,I’ve believed it to be a bottoms up market but I’m still heavily betting on two themes Transformers & Transmission & of course Water.

More themes will turn out,more plays will become possible, but it’s time to first win this French Open,keeping your Watchlists ready to go for the faster play when the court turns greener,far away from the reds of the soil of the clay court were are running on.

Alas some players adapt more quickly & will see the grass earlier but some would rather test themselves at the less prestigious Halle Open right before Wimbledon to fine tune their skills.

And a few may debate, the soil isn’t exactly red to state it’s claycourt,and I can’t do anything but agree with a feeble yes, knowing that it’s possibly deceiving like the non apparent red that has been plaguing the markets:)

P.S. I’m not SEBI registered & these are my thoughts on the markets. Pls do your own diligence. No recommendation from my end.

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Have added Iris Business to the PF. It is now close to 1.2% on allocated capital. Looking to ramp it up further. There are risks, the biggest known to everyone. However I feel that the other two founders & their team is capable enough to get through this unexpected turbulent phase.

The weightage in PF on allocated capital has changed & have deployed some cash towards it.

Macpower CNC now sits behind Shilchar, Jash, Windlas in respective order.

Have trimmed Ethos & it sits now close to 4% position. Ethos is there in family PF & I’m looking to exit here as looking at better & quicker returns this year. Ethos could be a compounder.

Macpower CNC has been the biggest mistake for me in last 1 year & in hindsight a very big learning.

Shilchar> Jash> Windlas> Macpower CNC > Ethos > Iris Business

Disc: I’m not SEBI registered & biased. Pls don’t take this as an investment advice.

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