Great. Thanks for clarifying ur thought process. I’ll probly dip my toes on holding for long term this time… 
Missed out on a 3x for Jubilant Ingreva last time - another demerger story 
Now that cashflow visibility is seen I’ve started taking small bets in high risk areas since I now am confident in my holding power…
Idfc and idfc first… First tranche done. Small amount relatively speaking so still low risk even with the uncertainty.
Ugro capital and borosil renewables… Added a total of 4 percent(2 percent each) to my PF after listening to the latest concalls and interviews. Again, small amounts… Won’t be adding any more for sure for some time since they are high upside bets with lots of risk and I am not comfortable with higher allocations
Have increased my stake in IDA and Vaibhav too and I think I’ve reached the max I’m comfortable with now. . I have enjoyed this drop in the market and hopefully now that I’m done with my allocations things get a bit more stable(Though I’m expecting pain for a few quarters stock price wise in most of my PF so I don’t feel too bad about it) …
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The reason for IDA’s fall as I understand, is lack of new engagements or orders., if they don’t bag 1-2 new client every quarter then they can’t grow.
The Key persons selling their shares is also not helping the price.
| Name to Person | Category of Person * | Securities held pre Transaction | Securities Acquired / Disposed | Securities held post Transaction | Period ## | Mode of Acquisition # | Trading in Derivatives | Reported to Exchange |
|---|---|---|---|---|---|---|---|---|
| Type of Securities ** | Number | Value | Transaction Type | Type of Contract | Buy Value | |||
| (Units~) | Sale Value | |||||||
| (Units~) | ||||||||
| Jaideep Billa | Designated Person | 355776 (0.20) | Equity Shares | 15404 | 10111697.00 | Disposal | 340372 (0.20) | 18/08/2021 |
| 18/08/2021 | Market Sale | 23/08/2021 |
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Yup. The selling gave me pause. However, I tend to give a company like this a little leeway since anyone seeing their networth increase 10x in less than a year tend to do crazy things. Even though Mr. Billa was the CEO of the wealth division… In the grand scheme of things ida is small fry vs other companies and I don’t think he would ever have imagined making such a windfall profit over so few years… And some of the reasons why people take these posts vs a blue chip is to benefit from situations like these. I like taking advantage of these situations when I’m building a long term position so I discounted the selling and continued to add… The last concall took my conviction to a new level. I’m sure they’ll continue on their growth path and will continue getting clients… Though for the new few years it will be difficult to guage this QoQ so patience would be needed. Let’s see how it goes.
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@Malkd even i have added to my position in IDA in the recent fall , eventhough addition was a little measured this time , as IDA has overshot my allocation percentage . But i’ll be adding more , once the price settles to the new range . The valuations looks very attractive for a semi SaaS company with a 25-30% CAGR in earnings over 5 years.
Able to increase IDA up to 3% of pf avg 690. But looking at the steep fall without any support levels if growth falters it will be on further free fall. I have just started going through the funda’s of Sofware co’s.Nucleus is also similar product co, but I wonder why they are not able to grow all these years!Today’s is the biggest drop in my pf with Laurus leading the plunge.Now market participants are wary of buying pharma, All pharma co’s announcing capex , competition may erode future profitability,close monitoring of margins needed since all eggs in one basket ie. Laurus is 56% of pf.
Yup. The laurus drop today was painful. My portfolio was in deep red and ended up losing nearly 5 percent of my net worth in one day haha. Considering laurus has helped increased my net worth by nearly 300 percent(150 percent total since it’s half my PF now) it’s just a small annoyance though. Sectors go in and out of fancy all the time. As their growth story continues next few quarters/years I’ve no doubt the share price will too.
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To be honest, I am on the whole very pleased with the drop. You guys got in on the ground floor. We barely managed to get a toehold in towards the fag end of the rise. It is still a very very good growth story with a long runway and this fall is giving a lot of us fresh investors a way to add to existing allocations. While we will probably never reach the level of returns you have, it can still form a core part of portfolios targeting 20-40 pc growth for hopefully the next decade.
In fact, I am actively in the process of leveraging all the cash I can. Have a few sources, which will take a little time to liquidate. Am hoping this mid/small cap correction continues for a while - so that I can scrounge up the cash for a bunch of stocks which have suddenly come down to levels I never thought I would see again. IDA and Racl are another couple which come to mind.
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@blue agreed. The way I look at is the first 2 to 3 years of an investment… Once conviction is built… Is all about building a position and not looking at unrealised gains(unless one has gambled a huge amount in one go through a rare lumpsum which is what happened to me with laurus and deepak). Cash flow is usually monthly or quarterly for most people so staggered building of positions is sometimes the only option… So if a company’s price falls in the first few quarters or years it’s fine by me.
I’m personally glad for eg that I got to add borosil renewables at 280 the other day considering they actually followed through on the promise of a few quarters ago with expected profits and the company actually looks reasonably valuated now vs earlier this year. Same with vaibhav… Surprised to have gotten it near 200 dma levels considering they are a lot safer as an investment vs a few quarters ago and I duly obliged with buying more and building my already existing position at 700. Idfc and IDA too have given a nice opportunity to build previously small/no positions at prices I didn’t expect to see… Idfc especially at the prices a few days ago just don’t make sense(and since then it’s already recovered a fair bit). I am now fully invested again but il need a place for my future cash ie in September, October and so on…so hopefully the volatility continues.
The fruits of these investments are for 5 to 10 years or even more down the line so the cheaper they are when adding the better. There’s no such thing as entering a good company too late as long your time frame is reasonably long and expectations are adjusted. Good luck with your recent laurus addition. Cheers.
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The market can make anyone seem like a genius sometimes. It’s at this point where I personally feel one needs to take a small step back. Conservative People I know who have never invested a rupee in direct equity are breaking their FDs and mutual funds and putting all of it directly into companies with one person even saying he is expecting a 10 time return in 10 years at minimum from reliance. Many of my students are asking me if it’s possible that they can make 1 percent every day and are talking about turning thousands into lakhs and lakhs into crores in the next few months/years. Really good investors that I know are suddenly chasing after overpriced ipos. Everyone feels they’ve got a short cut to riches and are already planning their futures according to this bull run.
I’m a bit guilty of this too… With me gleaming all over regards my last purchase of idfc and idfc first(3:2 ratio) a few weeks ago in the small window of opportunity wherein the market overreacted to vodafone AND My “FD” in ITC has worked out well too since I’d built a rather large position there and now it’s finally had a breakout. I dunno know if I can bring this down to skill or just an overall bull market that is covering my errors haha(even my recent addition borosil renewables has been on a tear and barely blinked when confronted with what I considered bad news for the solar industry regards taxation). With idfc and ITC leaving buying range I’m a bit saddened too since I’m out of options regards where to put fresh money from Now on.
So while some people will continue enjoying with fresh cash invested in what could be a long bull run I’ve decided I’m going to stay out of it and not add any fresh money(will not take a rupee out though) until valuations cool a bit… Either with eps growth/with a PE de rating in some companies.
ITC and idfc rises were the tipping point for me since I really cannot find anything at good valuations currently for me to put money in
and they were cheat codes all this while (pharma is still mouthwatering but alas I’m very overweight due to laurus already… And it’s consolidating nicely and hopefully helps my PF keep up with the roaring nifty soon) .
Time in the market is more important than timing the market but this run has now gone way past my comfort zone and I am not willing to add fresh money in any company at these valuations (that being said I am currently nearly 100 percent in equity and will not book profits anytime soon) . Now that I have no companies to invest in and ITC is no longer an FD option for me… All fresh cash is going into Actual FDs/will remain as Cash and il reassess if and when the companies I’m tracking come into buying range(even reits/rites etc have run way past my comfort zone).
In the meanwhile I guess it’s time to just sit back and enjoy this run for as long as it lasts.
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There are two stocks on which I have gone full throttle one is Globus Spirits and Jubilant Ingrevia, I might be biased, but Please read and advise when you find time.
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I in-general do not feel in control and comfortable with my high exposure to direct equity, so I am booking profits or exiting in some stocks which I don’t understand well and doing SIP in Index (heavily skewed towards Index fund) and a bit into Parag MF. My goal is to increase my asset allocation in the index fund in the next 1-2 years to ~70-80% and remaining in direct equity. At present it’s the reverse.
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@rahulbhardwaj19 … Il be using fds just as a short term measure until I find a company to deploy my cash in. When I do find an opportunity il be back to 100 percent equity again. I guess it depends on age and situation but in my current situation I find debt too risky.
That’s a weird thing to say…
But I’m arguably young(depends who you ask lol) ie early to mid 30s. I currently have good visibility regards my earnings potential for atleast the next 3 to 4 years and I don’t really have as many expenses as I will have 4 years from now(ie kids/house etc). Hence I want two growth drivers for my networth so I can enjoy a snowball effect later… Ie my earnings from my business(income) and the growth in my portfolio(built with all of my savings). Right now I can stomach volatility and cover any losses since I’m at prime earnings stage with low expenses… If I invest in debt instead of equity I’d be relying purely on my earnings for growth in networth since debt will barely beat inflation.
I find that too risky since as I grow older the risk of health problems/me losing motivation in my business/competition coming in etc increases. Ideally 4 to 7 years from now my two growth drivers ie income and portfolio growth reach my desired target and I can then shift to real estate(ie a house) and debt funds/invits etc and live a risk free life with a “salary” via dividends covering all business expenses (rent/salary) and household expenses(kids, daily, travel).
So, basically, once I climb all the way up the hill il gladly switch to debt so I don’t have to come back down the hill again. Unfortunately, I’m still just 1/4th the way up that hill so I have a long time to go haha
That being said I’m not going to be stupid about equity And have to be even more careful than most since I’m 100 percent in(+tax saving debt like PPF though) . So, I only jump in when I feel I have some sort of MOS and a mispricing and am not an advocate of putting money in via sip no matter the valuations… So I wait patiently until I get a chance.
In short, my longwinded post could have been summarized as the debate on debt vs equity varies from person to person and situation to situation . Good luck to you
@rshankv I have a 10 percent position in jubilant ingrevia from lower levels(lowest level infact) and it’s never going to go anywhere but I won’t be adding more.
Regards globus… See, I came across the story a few months ago and like with every other company with a good story currently I feel like I’m a bit too late. When everyone knows a story there’s nothing left for latecomers like me. I’m also not a fan of sin products in India and owning a tobacco company is enough for me so I won’t be looking at alcohol. Good luck to you though.
BTW saksoft and expleo have been on a tear since we discussed them start of this year . Part of me still wishes I’d stuck to ida + expleo + saksoft instead of moving all in on ida alone haha. Underpriced bets have really exploded last few months even when the quality may not be that great (another worrying thing regards the state of the current market)
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The problem with IDA was it didn’t bag any new order this quarter and KMPs selling their shares didn’t help. I would never invest in Expleo or Saksoft they are below average company , even if someone says that it will double in next 6 months still i wont invest, I agree sometime too much information is a bad thing … These two companies just got rerated without showing any performance improvements, during a tide even trash will sail high
If all time high is the reason why you are not looking at Globus Spirits then probably you need to relook into the future growth prospects and the scalability and flexibility that Globus Spirits is offering, it could easily flip the production between ENA and Ethanol, on a lighter note smoking is more injurious than drinking , but its your view and i respect it !
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@Malkd : -
U’ve again raised some interesting points in this post ( or maybe ppl like me find solace in philosophical discussions whn thr’s nothing to buy )
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Regarding ITC as an FD analogy : - If u’ve analyzed & are confident abt the long term prospects of the co. here thn why u switched from SIPng frm ITC to the actual FD.
I mean, buying as FD means u r buying the yield. So a 10-20% move in the price of ITC has probably jst move ur yield max 1 % which will still be in a comparative range than FD. And at worst, u wd hv just bought 1-2 yr fwd yield. To summarize, ur ITC earning multiple swinging frm say 15 to 20 shouldn’t theoretically prompt u to buy an FD which is probly a yield of 4-5%, assuming u r not going for Small Fin Banks FDs, which are riskier too. -
Does ur stock watchlist changes/get prioritised based on certain co. specific problems. E.g. - The recent saga in ZEE or the comparative undervaluation in BATTERY stocks due to EV overhang. If so, how u shift gears - take up the co. to study leaving aside ur watchlist stocks or take a starter position or smthng else?
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A quote to ponder frm Charlie Munger in this yr’s Berkshire AGM was this : -
“Well, it’s crazy to think anybody’s going to be smart enough to husband money and then just come out on the bottom tick in some crazy crisis and spend it all. Always there’s some person that does that by accident, but that’s too tough a standard. Anybody who expects that of Berkshire Hathaway is out of his mind.”
Now I knw that these guys have a different perspective owing to thr circumstances still this quote got me thinkng & seeking answer : -
Basically, his quote led me to question the assumption of holding cash in anticipation of crash. This goes in direct conflict with the “Time in the Market not Timing” theory. Isn’t holding cash a disguised attempt of timing the market?
The above is just an exercise to get views on portfolio & risk mgmt during bull markets & not a critique\comment on ur strategy.
P.S : - The post will seem more relevant if I confess this beforehand. My own portfolio currently has a cash position which has increased over last 2-3 months bcoz I’ve trimmed some positions due to overvaluation. Also, M not a market timer but more of an overvaluation nervous investor who gets uncomfortable with nythng above EV/EBIT > 15. M currently holding a special situation heavy portfolio & some smaller positions in Small/Microcaps.
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Hey, I have read your posts and respect your views on IT/Tech firms…Had a question on one firm I came across, would be great if can get your views - its about a small company Xchanging solutions
The listed Indian entity was initially a subsidiary of Xchanging Solutions PLC, UK parent - which was later acquired by CSC. CSC was subsequently acquired by HP. HP later demerged their Enterprise business into DXC technologies …so now, the listed Indian entity is a subsidiary of DXC tech.
The valuations of Xchanging is similar to that of MNC product tech companies like Oracle Finance. The business is mostly insurance focused. Overall they have a Product + BPO business. Product seems a strong one in UK with client such as LLyod.
What I am trying to figure out is the listed Indian entity includes the Product part of business or only the BPO part. How strong is the Insurance Product, if it is owned by Xchanging Indian entity or any part of Product business trickles down to Indian entity in terms of support etc. Also, what is the future roadmap for the listed Indian entity. They already tried twice to delist with failure. Any insight on these points most welcome!
Any specific reasons on why you feel Expleo is a below average Co. ?
Would love to hear your views @rshankv .
Looking at the trend in revenue and profits from past 6 quarters , it is not going anywhere, this time the employee costs are bound to increase. But if you are asking me business specific details, I will do more research, i have friends in DXC in good position, will reach out to them this weekend and will revert back
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Software testing (manual) has the lowest billing in software industry only after production support, Automation testing have 20% more billing and performance testing probably has 30% more billing .
Expleo has ZERO moat , they are not growing and growth wont come easy as they are the smallest fish in the pond, Please feel free to go through the below posts and then take a call
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