Ishaan's Longterm Portfolio

Q&A: Questions & Answers
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PORTFOLIO UPDATE!!

1] ICICI BANK

Nothing wrong with this bank. The numbers were excellent and I believe going forward this bank will continue to perform decently well than its peers. As I have mentioned in my previous posts, I am planning to reduce my largecap allocation and shift to midcap and small cap companies, as rightly suggested by @hitesh2710 . So I have sold 20% of my ICICI Bank shares for 55% profit. I will sell more 20%, whenever I get a better buying opportunity in one of my portfolio midcap and smallcap.

2] ICICI LOMBARD GENERAL

We all have read and heard about the under penetration of Insurance in India. The Insurance market as a percentage of GDP is only 3-4% while the general insurance is only 1%. The growth opportunity for general insurance players is huge as compared to the life insurance players. Yes, one major point to look out for is the loss ratio, which if not properly managed can lead to a lot of damage. But ICICI has been able to manage it very well. The loss ratio for health and travel segment shot up to 109% last FY, but this FY it has come down to its long term avgs of 77%. This means normalcy is coming back.

The company has a majority revenue coming from passenger vehicle insurance which is comparatively a high loss ratio business. Hence the company is focusing on increasing the Commercial Vehicle business while maintaining the PV segment business. The loss ratio across segments are quite normal and sustainable in the long term.

Coming to valuations, the company seems to be valued correctly or a slight undervaluation cannot be neglected. Due to high loss ratio last FY during the second covid wave impacted the profitability but it has now normalized to previous levels and we can see that in their TTM profit of 1570cr. This quarter was exceptionally well due to a lower tax liability but even if it didn’t help, the PAT comes at 457cr, which is the highest ever PAT for this company. But PAT might not be acceptable to all, so I am considering price to book value which is at 6 and the 5yr average is 8.5. This itself values the company at 1700rs per share. Also the PE average is at 45 while now it is at 36. Even EV/EBITDA is quite beaten down. Now one might say, something might be wrong in this company that is why it has been beaten down so much. But comparing with the whole insurance sector, except for SBI Life, has greatly underperformed, a popular example being LIC, one can safely assume it is not a specific stock which has underperformed but it is the whole sector going through a bad phase.

Coming to future prospects, I expect better results, thanks to the festivals in the next 2 quarters. Historically, these months are beneficial for general insurance companies. ICICI Gen has performed better than its peers, consistently for years and the growth of general insurance will largely be led by ICICI Lombard.

I am expecting 1600 level by next 2 quarters. It is still in a downward channel but I think the trend might change soon. Once FIIs start buying, these high beta stocks will start to perform.

Open to criticism. Would like to know your opinion and please point out if I am wrong many any assumptions.

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Thank you for taking the time to post. So what happened initially was, I was not so sure about investing in smaller companies. I preferred waiting for some sort of correction in largecaps and started buying at low levels, it may be because of the increased volatility and security of bluechip companies. But I started to realize the drawbacks of my strategy and how it wasn’t a good method of investing in the longterm. Since the start of this financial year, I started listing some sectors and the major companies in that sector, like renewable energy, EVs, Diagnostic companies, Chemicals, etc. Even though I was convinced that the prospects of these companies are good I could not muster the courage to invest in them in one go, that’s why I decided to allocate first a small portion of my portfolio and take a decision to increase my allocation with every quarterly results. This helped me reap the benefits of stability in the bluechip stocks and I could buy quality midcap and smallcap stocks during the correction phase. As a result my whole portfolio could withstand the last years consolidation phase and even stay profitable the whole time.

Going forward all my new investments are either to buy quality mid cap and small cap stocks and hold very few largecaps which will give more returns as compared to the whole index. I keep adding 1-2 stocks of my existing portfolio if there is stock specific correction. I am perfectly okay having 20 stocks in my portfolio but I will take the midcap and smallcap allocation to almost 60% of my whole portfolio. Having 20 stocks just helps me keep my mind at peace incase of stock specific crash.

I hope I answered your post.

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PORTFOLIO UPDATE!!

1] SBI CARDS
The results came in yesterday. Cannot say they were exactly what I expected but Y-o-Y growth is very robust due to the low base effect. The revenue numbers were good Q-o-Q and Y-o-Y but profit numbers fail to impress. The PAT margins were affected due rising interest costs but I believe we might see the peak levels soon. Even the management expects the majority of the damage coming from Q3. Now no one knows how bad it is going to be. So instead of focusing on such short term phenomenon, I looked for card growth and market share which is improving or remaining constant. The management expects 0.3 million card issuances every month. An ambitious but achievable target. Still the TTM profits are higher than that of last year from 1600cr to 2100cr. Considering 520cr Average quarterly profit for this year, the estimated profit comes at 2160cr. Valuing it at 40PE, the price comes at 920rs per share. At current price of 805 it is good buy according to my thesis.

Now it is in a bit of corrective mode, so buying it right now won’t be wise. I will wait for some correction and consolidation to average my position.

2] TATA POWER
The company reported highest every quarterly profit in a time when electricity demand is subdued due to the monsoons. Strong deal wins in EPC projects and Solar Rooftop segment is helping the company to stay 2 steps ahead of its peers. They are not just dependent on the power generation business, though it is a major part of their earnings we can see incremental growth form all other verticals.
In their presentation they have mentioned 37% of almost 14GW capacity is renewable. Almost 1.4GW of renewable energy plants are still in pipeline. This will take the renewable portfolio to >40%.
An interesting aspect of renewable energy capacity is that the cost of generating electricity is very low. With increasing share of green energy, the company will save more on fuel cost.
Coming to the charging infrastructure being built by Tata Power, more than 450 stations along national highways and special infrastructure for buses. This is a very small and it might not be even profitable for the company as of now but going forward, we can see more and more partnerships with major car manufacturers for providing home charging solutions and with governments too. This can be a good growth engine if monetized properly.
Currently it is trading at 28PE and I think it rightly valued given the huge upmove it gave last year. The good thing is the move has been sustained foe quite a while and we are seeing a good base pattern being formed. Both institutional investors have trimmed their stale owing to valuation risk since last year but I believe at current valuations if the company performs consistently we can see buying resume in this stock.

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PORTFOLIO UPDATE!!

1] VGUARD

The results were quite disappointing and the stock has shown similar movements. Thanks to my lower average price I am able to exit at 20% ROI, in just 6 months. The business is good but I feel some other momentum sectors and some deeply beaten down stocks can give better returns going forward.

2] HDFC AMC

For last several quarters, FII holding in this stock was in a downward trajectory but this Sep quarter there is a 5% spike in shareholding. This has been accompanied by a good retracement from the trend bottom of 1700 and is currently near 2100. The stock is beaten down but is currently trading higher than the 50EMA and 20EMA, the latter is about to cross the former indicating positive momentum. It is also performing a double bottom and a breakout is what it needs to go even higher. The stock has discounted the competition from the ETF space and is moving ahead. The business is strong. There are some negative factors like reduction in expense ratio but I have observed them going higher each quarter. So going ahead we can see stabilization and growth in earnings given the strong momentum of SIP investments by domestic investors. They are the sole reason for the behind the outperformance of Indian markets since last year.
It is trading at 32 PE while the 5yr AVG is 42PE. Now one can argue, what if the earnings fall which will decrease the EPS and increase the PE? Well in that case the PAT has been stable and there is consistent growth in topline. Considering a modest 10% growth in earnings this year, takes the estimated PAT to 1450, valuing the share at 40PE, the price per share according to me is 2730. At current price, it is good value buy.
This is currently a swing trade. I have not yet decided if I want to include this in my longterm portfolio.

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Just came around this thread.

Kudo for starting your investing journey at the right time (rest of us were late :smiley: )

While I agree you should focus on developing your skills , I believe it was wise from your side to pickup the leaders in the sectors so that you don’t need much analysis from time to time. Anyways this should atleast beat FD returns ( not sure if this can be done unless you expand your investment period till 4-5 yrs)

Few suggestions:
(a) I think getting more salary / business income should be priority so that the absolute income can also be great along with return% .
(b) For more allocation , see if you can open demat account for parents , my guess is if haven’t invested in stocks yet , they probably will have money lying in FDs etc. After calculated approach , you will have some money left for stock investing for parents.This way atleast family income would rise.
(c) Whether you want to become a trader or not , is your choice. But that requires regular stock market check (technicals) etc ( more time basically). Thus I would suggest finish your studies first , then allocate some time along with the job and you can do both trading and investing.

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Thanks for replying.

My investment horizon is different for different stocks. There are some long-term bets in my portfolio like insurance and telecom which I feel will perform better in the long run while some bets are strictly technical based and I exit once it reaches my target.
This is just to keep me excited and my trading capital is very limited as compared to the whole portfolio.

As for my parents, my father is very sceptical about investments directly into stocks, which is why I am so interested in proving him wrong :sweat_smile:. I have forced my mother, I have been adding money to her dmat account without telling her so that she has some corpus to rely on in her old age, in next few years.

My main focus in next 6 months is to increase my income. A higher income will help me take advantage of opportune moments in the market. Even though I am a teenager, I have managed to keep my expenses very low. I believe this will help me in the long-term.

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PORTFOLIO UPDATE!!

ICICI BANK
1] Avg price- 738
2] No.of shares- 8
3] Reasons- This is a part of my largecap, stable long term investment. With banking being major
part of our lives and it is unlikely that it’s significance to go down.

HDFC BANK
1] Avg price-1530
2] No.of shares- 2
3] Reasons- This is a part of my largecap, stable long term investment. With banking being major
part of our lives and it is unlikely that it’s significance to go down.

HDFC LIFE
1] Avg price- 664
2] No.of shares- 13
3] Reasons- In India the youth population and the young working class is huge and their earning potential is much better than that of the older generations. They know the importance of insurance and hence don’t hesitate to buy health and life insurance. This is a great positive for Insurance companies, who will have increasing cash flows for years to come.

ICICI LOMBARD
1] Avg price- 1145
2]No.of shares- 3
3] The general insurance sector in India is vert underpenetrated and is less than 1%. The scope of growth is huge and ICICI LOM has been delivering consistently since years in this segment.

BHARTI AIRTEL
1] Avg price- 740
2] No.of shares- 7
3] Reasons- With growing internet usage in our country, data consumption is about to go through the roof. India has one of the cheapest data plans and we have a lot of room for increasing increasing tariffs. Now we are at 2$ ARPU. I don’t see any reasons why this number won’t go to more than 4-5$ ARPU.

TATA CONSUMER
1] Avg price- 752
2] No.of shares- 4
3] Reasons- I love their products and its a company who has been successful in maintaining their market share for years. It has a range of products from necessities to luxury products. With increasing incomes we can see discretionary spending going higher. Also its starbucks business is growing aggressively. With increasing acquisition of small FMCG companies, we can see huge product diversification.

GALAXY SURFACTANTS
1] Avg price- 2727
2] No.of shares- 1
3] Reasons- This company has a big FMCG corporations as its customers. Since I cannot buy all these companies, I invested in this one as a proxy play on all the large corporations.

KEI INDUSTRIES
1] Avg price- 1067
2] No.of shares- 4
3] Reasons- With increasing number of solar farms, electrification of villages and the highest ever demand for wires from Auto industry, Housing Industry and Power companies, it has great long term earnings potential. It has strong and increasing market share and great pricing power.

KPIT TECH
1] Avg price- 564
2] No.of shares- 6
3] Reasons- The increase in spending on R&D of electric vehicles and the AD-ADAS system development and adoption is a huge a opportunity for KPIT. Their have big Auto companies as their clients who have invested heavily in this space and KPIT is a beneficiary of the EV growth and related services.

IEX
1] Avg price- 210
2] No.of shares- 21
3] Reasons- The increasing number of solar power plants will require a sophisticated market place for trading of the electric units. IEX has a monopoly in this space and with increasing solar output each year, IEX has great growth oppotunities.

TATA POWER
1] Avg price- 225
2] No.of shares- 15
3] Reasons- We all might have Tata Power for some obvious reasons so I am gonna just skip the reasons for this one.

M&M
1] Avg price- 960
2] No.of shares- 3
3] Reasons- The auto sector in India is undergoing a huge change. Indians now prefer buying SUVs rather than buying the entry level hatch backs and sedans offered by Maruti. Mahindra has an obvious advantage over other Auto companies in the SUV market because of their MOAT and huge fan following for their SUVs. With huge R&D spends and innovation in every product they launch, it’d market share is bound to improve in coming years.

SBI CARDS
1] Avg price- 872
2] No.of shares- 6
3] Reasons- Credit Card spends in India recently broke through 1.1 lakh crore and it will keep increasing. India is shifting from saving society to a higher spending society. This change will benefit the card companies. The avg spends per user is increasing annually and there is no reason for it to slow down. UPI can dent its growth a little bit, but if you want huge rewards on your shopping, lounge access and all, you will require a credit card.

METROPOLIS HEALTHCARE
1] Avg price- 1754
2] No.of shares- 3
3] Reasons- People are getting conscious about their health and preventive tests are increasing yearly. These diagnostic companies have high profit margins. Coupled with low penetration of organized diagnostic chains, we can see some market consolidation over the years.

ANGELONE
1] Avg price- 1860
2] No.of shares- 2
3] Reasons- Interest rates in India are at all time lows and with limited options to get higher returns, people have started investing actively in the markets. There are traders and direct equity investors, who trade and invest actively in the market. With investment options like the smallcase where one ca directly buy portfolio of shares which is managed by a managers, the number of investors will increase. Also the increasing positive attitude towards trading and investing will support Angels growth. Being the only listed discount broker, Angel can get scarcity premium as well.

OLECTRA GREENTECH
1] Avg price- 630
2] No.of shares- 2
3] Reasons- Their order pipeline is so strong for the next 12 months and if they are able to honor their contracts and deliver the said number of vehicles, apprx. 2100 the revenue amounts to more than 3500cr. Their revenues for this year total were less than 600cr. So if we take their EBITDA margins for this year, which are around 14%, the EBITDA on their order for 2100 busses comes to 420cr, much higher than their current 85cr. I will decide to buy more or don’t invest at all after their every Quarterly results.

LARSEN AND TOUBRO
1] Avg price- 1850
2] No.of shares-2
3] With Indian government speeding and increasing the capital expenditure every year and also the incremental business from Middle East will benefit this company greatly. Also they have made great strides in the Green Hydrogen space and I believe if India wants to become a pioneer in this space then LnT will be very important for achieving this goal.

DEEPAK NITRITE
1] Avg price- 2200
2] No.of shares- 2
3] The valuations are reasonable and it has been a compounder with steady growth for many years. The management is very confident and clean with their business. Improving profit margins and stedy topline growth will be key triggers for the stock going forward. Also they have huge capex lined up, with a view to become an important domestic producer of chemicals.

AVENUE SUPERMATS
1]Avg price - 4038
2] No.of shares-1
3] The valuations of this stock will always be really high, so instead of valuations its better to focus on the opportunity it can capture in the Indian Retail segment. Dmart follows a PRODUCER-WHOLESALER-RETAILER model of distribution and is able to provide variety of products at competitive prices. It currently has just 300 stores nationwide and its revenue per sq.ft is 20000rs. What excites me is, what if Dmart has 1500 stores in coming years and are able to maintain their revenue per sq.ft. Also their Online Delivery model has started to grow and accounts for 2% of their overall revenues. An increase in this segment will be key beneficiary for increasing the margins and profitability.

MOTHERSON WIRING
1] Avg price- 61
2] No.of shares- 27
3] Their focus on High voltage harnesses for EVs will be a growth sector going ahead.

MINDA CORP
1] Avg price- 209
2] No.of shares-10
3] Looking at the increasing interest, sale and investments in Electric vehicles auto ancillary companies with their product mix suitable to the new space will benefit hugely.

Added Minda corp and ICICI LOM and sold V-guard, Marico, HUL and some of ICICI BANK.

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This month while searching for some smallcap stocks below 10000cr market cap, I came across Minda Corp which seem to fit my portfolio very much. It was in a growth sector, with good market share and clients and also it was trading at reasonable valuations. Almost all the major 2 wheeler companies are its customers from the traditional manufacturers to the new age startups with better products. But with the changing dynamics of the market it was necessary to observe the product mix. According to their presentation, almost 97% of it’s products can be used in EVs. From battery harnesses to the EV chargers, Minda Corp covers all the aspects of an EV vehicle. With more products like ac-dc convertor in charging technology and battery solution for vehicles are in huge demand. Apart from the that, the management expects the kit value of an EV to go upwards of 20000rs where now it is at 5000rs which means if they are able to maintain the number of clients or add new ones, they are aiming to 4times their current revenue which I believe will be achievable in the next 10 years. Given the month on month rise in EV sales we can safely assume than demand is shifting from traditional vehicles to EVs. A company in an industry with overall growth at over 20% will at least compund at 15%. At 22PE this seems a fair valuation. I will look for better investing opportunities in such other stocks or just stick to my portfolio and keep adding the small caps.

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PORTFOLIO RELATED NEWS

Recently came across this article on Business Standard about the government approving transmission projects worth 2.4 lakh crore for connecting the 500GW of Renewable Energy Generating plants with the central grid of the country. Now this is indeed a huge step towards carbon neutrality but there lies an opportunity in such news. This plan proposes to lay down more than 30000km long transmission cables in the next 8 years to achieve the target. Now this only covers the transmission lines but more cables will be required for building the charging Infrastructure for EVs, Battery swapping station with continuous supply of electricity for charging and also building of battery storage solutions all across the country to ensure uninterrupted supply of green energy. Now how can we benefit from this?
Well a the project is worth 2.4 lakh crore. Now I don’t want to involve myself in the politics and how this project will be delayed and all. So I know for a fact that this will happen either today, tomorrow or in next 8 years, wires and cable companies like KEI, POLYCAB, FINOLEX, etc will have to undertake capacity expansion expenditure because their current capacities are in no way enough to meet such a demand. Also these companies do export a lot of wires and cables to middle east and other regions of the world. These wires and cables companies have proven themselves over the years and now it is their time to invest heavily in increasing their capacities and fulfilling the capital expenditure requirements. Now apart from Government expenditure, it is obvious that Private Companies will also have to invest in these transmission lines to reduce their dependence on traditional sources of energy.

Coming to the next part that are the power generation companies like TATA Power and Kalpataru Power who have been investing heavily only in Renewable Energy will have to incur this one time cost. Unlike traditional sources of Energy they do not require a lot of raw materials to generate electricity. With an installed capacity of 169GW of Renewable Energy, we are on track to achieve this years target of 175GW. As this share continues to grow, power companies will be able to generate more electricity at cheaper rates which will increase profit margins, which helps fund further growth in capacity additions. They can also sell the power on exchanges which will benefit stocks like IEX, in the long term.

My confidence in my Investments in KEI, POLYCAB, TATA POWER, IEX, etc continues to grow with such positive tail winds.

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Hi, I know I have been inactive for the last 2 years. I just couldn’t get time to continue updating my portfolio here due to studies, work and other commitments. Now that I am working full time, I have enough time to update my progress here.

Coming to my Portfolio, there are no major changes. The Investment themes are still the same excluding a few minor changes here and there.

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New additions are Zentech, Nuvama, Ideaforge and Kabra Extrusion. I wanted some exposure to Defence Equipments, specifically Drones and a direct participant in EV battery Manufacturing.

Nuvama is just a value buy. Given the SIP flows and growth in wealth of individuals, I see Wealth Management sector growing decently, I bought Nuvama during the Election Day crash. My average is below 4500, at this Price the PE was close to 19.

I will regularly update any changes here or reply to any questions or posts.

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ZEN TECH

This a new addition to my portfolio. I was fortunate enough to find this stock when it was consolidating for the last 8 months. Now it has given an impressive 30% rally in just 2 weeks, owing to all the Defense contracts news in the market. Valuations are pretty high for this stock. Current PE is at about 80x EPS. This valuation for me is very high but I realized that I am never going to find this stock at cheaper valuations in the future. If I need a big piece of the upcoming rally, I will have to take the bitter pill and have patience with this stock.

BUSINESS SEGEMNTS
This company is mainly into 2 different businesses.

  1. Annual Maintenance Charges - 21%
    This included maintaining the equipment and annual contracts for any repairs, etc. This is a high margin and recurring business for the firm. Though over the past few years, the share of this segment is going down, but I look to it as a positive thing. It means, sale of equipment is higher and we can see this segment grow in value in coming years. This segment is a no brainer and not so exciting as the Equipment Business.

  2. Counter- Drone Systems
    This is the segment that got me excited. It is very clear that future wars will be fought with drones. We can already see the mass deployment of drones in Russia-Ukraine and Iran-Israel Wars. Pakistan and China have also deployed Drones along their Borders with India and hence Anti- Drone Systems will have to be deployed by us on a very large scale. Zentech Counter- Drone Systems can neutralize a UAV in a radius of 4kms. The exact order book or the breakup of exports and imports is a bit difficult to find. This segment is ofc a low margin segment with High RnD costs but revenue visibility and Growth Potential is very high.

  3. Tank Simulators
    Zentech has >90% Market Share in Tank Simulation. This is also a stable and recurring sort of revenue for the firm.

BUSINESS OUTLOOK

The company currently has a 1400CR order book and expect to book 900CR in FY-25.
Geographically, share of Exports and Imports is 50-50. This means, lower income countries can be a market where Zentech can grow their verticals. FY-24 PAT margins are at 25-27% of Sales.
Zentech is a Debt Free company which gives me a bit more relief about the sustainability of the Financials. ROCE is impressive at 46%.

VALUATIONS

In FY-24, the PAT margin was close to 27% of Sales. Considering the same metric, I am estimating 225-240cr PAT for FY-25. At forward PE of 50x FY-25 EPS, the price comes to 1340 per share. The stock is currently trading at 1200 levels.

This does not mean that the stock is undervalued or Overvalued. Market dynamics will affect this stock but any major correction or time correction is a good opportunity to Invest.

Inherent Risks are decrease in Government Spending on Defense Equipment or favouring foreign firms for defense equipment instead of Localization. Another risk is Execution Risk. If the management falls short of delivering the 900cr mark while maintaining margins, we can see a PE rerating on the lower side. Again, this is will be an amazing opportunity to dollar cost average or make a fresh position.

Would appreciate any recommendations and discussions over this. Only condition is, lets make it constructive.

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Very good selection of stocks. Looks safe and good for moderate returns. I think you can consider adding a few riskier growth stocks to increase returns.If their percentage holding is below 10% cumulatively then risk will be manageable.

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Much appreciated!!

I know my allocation to different stock is less than 10% but some stocks have given insane returns. Like Kei Ind has given 4x returns, Kpit Tech has given 2x, etc. So, I don’t consider selling these shares unless there is some fundamental change in the industry or the company.

Secondly, given my capital, it does not matter how much I allocate to a single stock. In a 2Lakh Capital A/c I cannot make substantial Returns. So I am currently focusing on increasing my Income. I have few automated Trading Strategies which are giving me 2.5% ROI monthly on a capital of 5 lakhs. The profits as of now are being reinvested in the initial capital to make it large enough, so that the profits are enough to take care of my expenses and also help me build a long-term Stock and MF Portfolio.

I am now thinking of eliminating all Large Cap stocks that are a part of Nifty 50 and invest them in high growth but mid and small companies. I would rather do an individual SIP in a Nifty 50 Index Fund and Bank and Finnifty Index Fund, instead of holding the same stocks with moderate returns in my stock Portfolio.

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Can you please share some insights about these automated strategies resulting in 2.5% ROI monthly.

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Considering the PF size, your effort is big, not that they both should be in proportion, and the cumulative knowledge and experience when combined with a bigger capital will yield bigger returns in the future. A bag of money can fall into our lap with no effort, but not knowledge and experience. So w.r.t effort, you are doing the right thing.

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Thanks a lot.
I always feel like I could do more, save more, etc but somehow while living my 20s exciting Life and managing expenses, the process is slow, but still consistent.

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Yeah sure. So these are basically 6 Leg Option Strategies. It is completely automated. I have personally completed the Out - Sample and In - Sample Back Testing. For the last 2 years, the average return has been 2.5% on Invested Capital. I cannot share the exact details of my strategy because then I will be answerable to my clients.

But, it is an option selling strategy with a drawdown of less than 4% for the last two years. Last year in September, the options movement was really pathetic and that’s the reason behind the 4% drawdown. As far as this year goes, max Drawdown has been curtailed to 3%.

Minimum Capital Requirement is 5Lakhs. But this strategy is suitable for even bigger portfolios. Lets say you wan to invest 10 Lakhs in my Algo, I first invest that money into a Debt Fund which gives a 5-7% return annually. Then I pledge that units to get up to 80% ( 8 Lakhs ) of that fund as a trading capital. The strategy generates 25 - 28% return on this capital. So lets say I made 2 Lakh gain which is a 25% ROI, on the entire capital it is 20%. Adding the debt fund returns, it makes total ROI to 26-28%. Deducting the Brokerage and STT, etc ( 4% ) I am left with a gross return of 24%.

In this way I manage my capital. Now, the after tax profits from the Algo are invested into MF or Direct Equity depending on the Market Condition. One obvious question is, Ishaan if you can generate 25% ROI annually, why even invest in stock and MFs? Well, its an Algo and there will be times when it will Underperform. It has not till now but it might. So I have to safeguard my profits as much as possible. I have to be diversified. Although I haven’t faced huge drawdowns yet, it does not mean I won’t in the future. I have to be ready for the worst.

Hope this helps.

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In case, you forgot this.

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This is the only post I read whenever I am in a confusion. I have managed to strike a balance between the two but I do tend to awaken the investing and saving demon inside me from time to time. :sweat_smile::sweat_smile:

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