@Ghonarbochon @Cshar @Mudit.Kushalvardhan …to get the max ROI and value what is the concetration you look at like idea single stock with all the money or 3 or 5 stock ?
alot of people just make portfolio post in valuepickr but their returns is not even close to a midcap MF so diversifying doesnt help we could have jsut invest in a MF if had to generate 15-20% CAGR
I have put my 80% into mutual funds and 20% into direct stocks. And in direct stocks currently i hold 18 stocks. But top 5 stocks are more than 50%.
As evident from earlier posts , I am all for diversification. If one is to invest significant portion of ones capital and sleep well, one has to be exceptionally strong in guts to invest in 1 , 3 or 5 stocks . I am more of a Lynch follower and not Buffet . Buffet did all the things that he nowadays says not to do in first 20 years of his career .I believe that limiting oneself to index stocks or largely followed stocks is the reason why most portfolios undeperform . Its utterly useless to spend ones own time and energy in direct investing if the returns are 15% . There is also one very good reason why low number of stocks are risky …
Can one invest 30% of ones capital in a stock and be cool if it goes for 20% LC or more or goes for 50% drawdown ? I have seen stocks where I had full confidence go down 50% .
Lots of experience and guts are needed to invest 10% of capital in a stock where very few sees value…but thats what makes the stock cheap and become a multibagger …
I have had about 6 stocks that became 3x to 20x , and similar number of stocks where I booked more than 25% loss . Its great fun to think what if I had invested 100% in that 20 bagger but one must also think what if it went down 50% ?
With diversification , one must ensure that he wins more times and by better margin than the times he loses but loss is inevitable.
@Cshar Thanks for your encouragement . I hope I grow stronger guts and concentrate investments like you do .
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Another quarter has gone and the portfolio is only 7.5% up from June end but probably past 12 months have raised my expectations to a very high plane . However, considering I kept about 10% of portfolio or more , in the sidelines ,and I have mostly small caps ,it’s probably fine. Bought and sold too much and too many times as well , so no point in naming dozens of companies here. However, PGEL has given 2.5x plus returns in 4 months …so booked most of it since I never had deep conviction in it . Booked 40% of Amara Raja to make the rest free of cost , but thinking of booking it once it crosses the 365 days holding period…as I am not to sure of its short and medium term prospects price wise because the EV story is stuttering. Sold of Sona BLW as well at some profit because of same reason .Sudden spikes gave good profits in Sharda motors(40%), Globus spirits and POCL (64%)too .
Sold off Danlaw industries after the bad results as there is too little of info available to keep track and better bets are available.Added Samhi, macpower,EFCIL,AXISCADES, Apollo Microsystems , SG mart etc. in “high risk high reward” section of the portfolio . Bought back Garware high tech films at a 50% higher price from my last selling point (still can be profitable investment), Praj etc.
To balance the risky bets , added some stocks that I consider as good value as of now …let’s see how the next quarter goes .
I do not feel there is much reason to run away and stay at sidelines just now but taking positions based on sector rotation and tailwinds/ headwinds is better idea .
Edit: As I reread the post it seems I have made it look better than it was . I did book 9 losing trades of 5% to 10% and 5 of 10% to 14%. While profit booked was more than 3 times losses, the fact remains most of the profits were made from stocks bought in the previous quarters except Pondy and globus . So…it was a quarter when I made too many trades as things were not moving in right direction soon enough .Time will tell whether I kept the weeds or the flowers .
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which are those stocks which you consider good value?
They are not value investments in true sense but to me it seems they have more probability of going up and more upside than going down and has less downside ( Assuming no complete market meltdown).
- Polyplex @1070
- Nuvama@ 5080
- Quess@710
- Balaji amines@2100
- HLE @ 435
- Bajaj finserv @1833
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Do you have thesis for the stock picks?
Some change in tactics:
Because the markets are in somewhat uncertain phase and there are macro events and economic facts that are likely to keep thing uncertain for next. 2- 3 months , I have decided to …
- Get out of financials like Bajaj finserv and large caps like Tata motors where things are not likely to turn soon for better .In general ,large caps are more prone to manipulation by FIIs and rewards are not very high . It’s better to hold cash and take calculated risks rather than adding ballasts that help in sinking the ship.
2.Book some profits …sold PGEL, Shilchar , REDTAPE ,Nuvama etc for different reasons. Shilchar is still in radar and will pick up near or below 6k only after the results .Sold at 7500 since the run up was very steep in last 2 weeks and the results are likely to be near flat as the new capacity was in picture for only 15 days.
- Buy good small and mid caps at per determined price via GTT . Two types …
a. Good companies with high growth visibility and good momentum .(Technoelectric ,Gravita ,Strides ,BLS etc.).
b. Good enough companies at their worst business position and/or at strong support or stocks under pressure due to some temporary reasons . They are likely to fall less but has much better upside (excepting big market crash ).(Inox India,Polyplex, RaymondLSL , Indigopaints etc.)
So in general , reducing random throws of dice and keeping some cash( 10% ) to pick at dips. Not selling out high conviction bets because mostly it’s too soon to judge .Need at least another quarter to judge most of the companies since more than 60% stocks has been only a few months in keeping .
I do not believe we are heading for a crash just because too many people are shouting from rooftops that there is going to be a crash . Random asinine comparisons with historical crashes are being made using the telescopic effect of time to link unrelated events at will. Markets may crash when it wants anytime but howling of scavengers is not going to bring it down .
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Would you like to share more insights on WPIL ? They have posted excellent results this quarter and they have healthy order book as well. I’m confused between Shakti Pumps and WPIL. It would be great if you share your insights for investing in WPIL.
I do not have any since it was semi trade not a proper investment based on own conviction . WPIL thread in VP , some entries in Mr. Rajeev Jawahar’s thread in VP and some details in screener along with a few call transcripts is all that I read and entered as it seemed a good opportunity for quick gains . These lines of businesses are capital heavy ,highly competitive and usually is not very highly valued . More importantly , I am not very good at analysing these to build strong conviction . So I trade in and out …bought at 3088 and exited at 3930… again bought at 368 and sold at 525 (very sharp run up ) . Will enter again if it pulls back and settles …it has enough reasons to go up for a while if the water works theme sustains as it has better results ahead in coming 2 quarters.
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Post results update :
Last 50 days , portfolio is swinging wildly and I had to trade more than usual to stay in same place .In the latest downswing I am still about 2 % above the previous one’s lowest point .Nifty and Smallcap 100 index both are down more than 10% …portfolio is down about 6% …so not that bad I guess . I hope the luck holds …
Some of my companies I grew tired with and sold off post flat or bad results …Praj,RATEGAIN, Sona comstar . These are good companies but not my cup of tea .Among riskier bets , I sold Bombay Dyeing because I do not see what they will do with the money they got as the textile business is operating loss making and I am not very interested in the real estate thing . Made 20% gains anyway . Sold Polyplex with some gains as I do not think that things will turn for good soon .
Among the general Bru ha ha about bad results , most of the companies I have ,made good results …Ceinsys, Piccadilly,Bls,Samhi,Nuvama, Shilchar,Garware hi tech films, GENESYS, Shaily ,Macpower, Apollo Microsystems,valiant ,zaggle ,Avalon etc all did well . Eimco elecon, cms,strides, techno electric,Gravita came flat and duly hammered but it’s Ok for now as these are somewhat long term candidates and have longer rope .
Added JWL,HIND RECT,TILAKNAGAR and KRN for various reasons . KRN is very high risk as I usually do not buy very fancy stocks …but this one time…let’s see .
There is also EFCil that did well but I am a bit doubtful about it so will Sell it if it goes below my buying price ,else I will hold .
Few more changes are to be done this week or the next rise (assuming there is one ).Lets see how it goes .
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Good performance, i am down 10% , exited Kalyan Jeweller which was largest holding above 700, this happiness is more than notional loss in PF:joy:
. Added Genesys, Ceinsys, Increased weightage in Samhi, Thomas Cook, LT Foods. Virtuoso is looking interesting, have small exposure.
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Exited 3 stocks from the High risk High rewards section of the portfolio …
- Walchandnagar at 259 … had bought it at 215 …so no loss. Exited because the turnaround might take longer than I thought and even then the results are likely to be lumpy . In this kind of market ,it’s not safe to be riding stocks where future seems a mystery !
- THOMASSCOTT @203 … Lost 20% . Results were not bad but there is no communication or information from the owners regarding business direction. Also before Puja , saw the 999 shirts being sold at 499 at Spencer’s . Amazon ratings are not that good .
- Apollo Microsystems@91 …lost 15% . I had bought it as a good defence stock where promoter bought preferential issue at 108 and company was increasing capacity by 7x. I had assumed it would take 2 years . But sold because the promoter went pledging like mad in past months . That in itself was not a dealbreaker but then this week they notified that the preferential issue is also cancelled . They gave a reason that did not ring honest to me ,because of the pledging run . I thought that the management knew about the investor withdrawal much before they let the news out in public.Too risky to ride in this sort of market .
Added Vaibhav global as value bet with operating leverage in next few quarters .Added ACE as a solid company after a 6 month consolidation and with the main season ahead .Added Asian Energy services in the HRHR section as a relatively risky but hopeful bet mostly because the promoter buying and preference share issue along with the CHP tailwind.Their concall transcript indicated good technical management and they seemed honest and straightforward .
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Would you please share the investment reasoning for HiRect ? Also share the growth triggers.
Thanks
Made a few more changes to the portfolio. Decided to get out of EFCIL as I am short of conviction ever since the Q2 results which did not quite add up . I am from IT industry and Seeing the very subdued jobs market for past 1.5 years, and reversal of many companies to WFO model,I do not really understand how this sector is growing so much . There was also a thread in twitter from a CG sensitive guy ,that indeed shows that the management cornered a huge chunk of the shares by the merger of the self owned furniture company . Simply put they bought it at a very high valuation considering its sales and profit and increased there shareholding hugely.So I got off at 580 with 20% in 3 months … and now it’s 680 today .
I also booked out of Hind Rect as I got 50% gains in less than 50 days . The main reason to deboard was valuation which even in my very optimistic model is already more than fair considering FY25 sales at 700 crores and 14% margin . I will trade on this one in my pocket money account but it’s no longer in my investment portfolio.
Sold off Genesys too with 28% in 28 days. This was a trading bet in the investment portfolio that went well . I would have held it but noticed that the promoter has other companies with Genesys name which are not listed as subsidiary in last AR and is selling on every step jump for last 1 year or more . I like Ceinsys much better and I rue the fact that I did not put in more in it when it went 33% below my first entry price of 615 .
KRN is also gone after it decided to buy a promoter held company with its IPO cash . Why they did not do all this before the IPO ? Would it have made the picture less rosy ? Anyway…23% in a week is nothing to scoff at .
Decided to add below stocks…all roughly 2% or less of active portfolio.
Sheela foam, Vadilal ,Force Motors and Kiri Industries. The last one is very risky and it’s in my HRHR section . First 3 are value bets according to my very lax standards .
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Thanks for your detailed insights. Its really getting tough now to invest in new bets as my filters are not allowing me to shortlist any company due to either rich valuations, peaked out industry demand or hallelujah . Need your more help on Genesys as i am in 40% gains rightnow however promotor diluting stake is really uncomforting, less than 30% stake of promotor in a good industry looks fishy, will be cautious and exit.
SFL is my new entry, this looks turnaround in corner.
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What’s your view on KONSTELEC. It’s 120 cr micro cap company. Healthy order book of around 600 cr. They basically doing a EPC business focus on electrical infrastructure.
Strength 1 Good order book with quality clientele. PSUs as well as private sector.
Risk 1 This company is not able to generate free cash flow ( typical EPC business problem)
Recently added this company. Trading at 19 pe. Below industry or. I don’t find any reason for such low valuation. Please look into this company. I don’t have financial background so I have limited understanding of financials.
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I took a look and I did not find any reasons for low valuation either . But it’s a SME board company and gave a subdued result in September quarter followed by the October /November correction explains it . The Crisil report is a positive factor but I did not like the Annual report that much because they said very little about themselves and a lot about world and Indian economics and industry .However, till now I have not invested in any SME board stocks because usually my 2% is way less than the minimum amount needed to buy one . Also, I am not much experienced in judging EPC stocks either … had EMS , WABAG etc but no longer hold them .But I think you got in at right time and should hold unless anything bad happens .As such the financials look pretty OK .
Disc: I also do not have any financial background .
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Sorry to say but EPC companies are not my cup of tea, As per my experience, for EPC go for large ones, 17 PE is very expensive for this when Ashoka buildcon is available at 8 PE. Business is mediocre to look at long term investment. I will avoid this personally or will quit at trading gains.
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Thank you for your reply. Actually I exit the stock out of fear only as many suggested me to avoid. However, it goes back to back upper cut from last three days. My bas luck.