Hi Donald, Hitesh, Ayush, Hemant, Rohit and others,
I really appreciate the way you do the in-depth fundamental analysis and near accurate technical calls on exit / entry points. Hats off to you for providing your feedback and the opportunity for others to learn!
I am a novice and in market for last couple of years. I have invested in gold on 2011 Diwali and and in 2012, I have bought One Up on Wall Street, Common Stocks and Uncommon Profits, Intelligent Investor, Security Analysis and Warren Buffett Way. I hope to invest enough time to learn and apply the skills one day the way you do it.
I have borrowed the ideas, applied my limited skills, entered and exited many scripts, booked profits early and kept losers. Overall no gains and it definitely took a toll on my health. I realize that future is uncertain and it is difficult to predict any outcome. However based on the track record / strong brands or moat / consumer mind share and opportunity to grow, could you provide your valuable feedback on the fairly long term (10 to 15 years) portfolio consisting of the below businesses. I hope many of these companies will sustain for a given period.
- I would like to invest 30% of amount at one go (slightly higher % to large caps)
- Remaining amount I would like to invest over a period of one year through SIP
- I go hibernate for few years. It’s difficult in this noisy world and I may wake-up on extreme pessimism / optimism and hope to have the courage, apply the skills and re-balance the portfolio.
Here is the portfolio:
- HDFC Bank
- Page Industries
- Asian Paints
- Balmer Lawrie
- Yes&IndusInd Bank
- Astral Poly
- Amara raja / Bosch
- Ashiana Housing
I ignored many of these companies based on the PE previously. Had I bought them, I would have been extremely satisfied with the result now. Please share your views. Thanks.
hi R Reddy,
the above list seems to be a compilation of very good businesses which can deliver above average and above market returns over longer term horizon of more than 2 years, preferably 4-5 yrs and more.
Most of them have good moats to help them survive for the long term.
Thank you, Hitesh. Would you suggest any other strong companies to include to this list or replace relatively weaker ones from the above list? I would like to invest in 15 to 20 companies.
If given a choice I would keep out balmer lawrie and ashiana and replace them with big pharma companies like sun pharma and lupin.
Thank you, Hitesh for your inputs.
Hi Hitesh Sir
We all agree that Lupin and Sunpharma are really good companies wid good track record. I was jus wondering about the capital intensive nature of the business. A company like Lupin for example has a Sales/CE ratio of close to 1.6
We have always been told that a capital intensive business never makes money for investors in the long run (e.g. airlines etc). For generating more and more sales it will keep consuming more and more cash from the business. That’s the reason probably why their dividend payout ratio is low.
Any views on this point?
IMHO I dont think its always applicable. Being ‘Capital intensive’ is a negative but it will always depend on what you pay for it. In fact, when everyone thinks they are not to be touched (like in these times), one can make serious money of it. The bigger point I wish to make is that past returns is no indicator for future returns. While the listed companies are good companies, they are mostly well discovered and appear expensive. I read a Motilal oswal wealth creation study report, which said that from 2003-2008, the companies that generated the most returns were capital intensive, commodity type (liquidity hungry) businesses and after 2009, their performance was really bad. So point is that at a particular price and time in the business cycle, it can make perfect sense. I wouldn bet on the same list to give me the best returns going forward