Manish Okhade's Portfolio

Instead of linking it linking to absolute sum, I would rather link it to investors interest and participation level in the market.

You may like to go through this blog post, which I like very much as it matches with my thought process

http://manufacturedluck.blogspot.in/2014/04/fools-wisdom-4-alternate-approach-to.html

So basically, I don’t agree with any of the 2 options that you mentioned because I consider myself an active investor. But if I were looking for a more laid back investing style, I would accept your option no. 1. But even with my active participation level I won’t opt for option 2.

I have detailed my approach in my portfolio thread :slight_smile: ( just in case you would like more details)

Hi Manish…

May be capital can be split ( 70:30 or any comfortable % ) among the stocks…

Assuming Modi wins and sentiment/economy improves, may be some percentage can be allocated to cyclicals…

Regards

mallikarjun

There are so many growth stories around today. I find it hard to concentrate properly. Its a problem of abundance. I have never experienced such huge number of opportunities. It doesn’t make sense to load all growth stories as tracking them would be nightmare. But the issue is that many of them will go even higher and some of them will tank for sure. So we are into strong bull run in a select sectors.

So now stock selection is becoming very tricky. Its always hard to pick stocks when we have many, which one to ignore and which one to load calls for the need of crisp filters.

Let me know how VPs are determining the filters in current context.

@Manish: Exactly the problem I’m facing. I want to own a concentrated portfolio but the problem with it is that I’m missing out quite a few opportunities (i.e Mayur, PolyMed, Astral, Cera, Granules, Atul Auto, Page, HDFC, GRUH, Repco, Canfin, etc)

One of the advantages of keeping a diversified portfolio is you can always chip in with a bit of here and there and one can avoid facing the feeling of missing out.

Owning a good set of stocks in concentrated portfolio needs one to make pretty hard choices. Short term alpha needs to be compromised for long term stability. Now I’m realising it’s much easier to preach than practice as opportunity cost in bull run can easily test an investors patience. Still I’m sticking with the old names instead of going down on quality curve.

In case something really good comes along, I make sure I replace one or the other name in portfolio rather than adding one more to the list.

Regarding filters, I’m looking at opportunity cost of not investing in quality names which according to my perception is still high enough to not churn the good old VP style quality portfolio.

Very valid point Manish.The problem with being a VP member is: we have become so accustomed to ‘market beating returns’,that we start itching a bit when we see some underperformance at our end :slight_smile: The idea should be to avoid greed & stick to quality.

Since many of the cyclical cos. are staring at a very deep pit in their interest costs,my sense is that quality will continue to command a premium.Now,the quality of these businesses: Infra,EPC,etc. is itself a bit of a bother.But rather than going so deep into the cyclicals,we can very well start with an Auto ancillary player.Thus,I am bullish on cos. like Gabriel/Ceat.These companies have been doing rather well of late,and a recovery in CV cycle(long overdue by historic trends) will give a big boost to their earnings & they are available at reasonable to low valuations.Then we can look at the ‘cheap’ financial cos.: Canfin,Federal Bank look good.And so on.

Pharma cos. will perform selectively & a stable mandate can give the Rupee some temporary upside,leading to a knee-jerk drop in their stock prices.But the story continues to be very strong & with Global M&A on the rise,the sector should stay abuzz…net net.So,they would be a buy on dips.We must understand that these risks are part & parcel: one can’t time every move to perfection & it would be plain greed to jump into a Cap Goods/Infra/Financial name,solely because markets have started to reward them.And the maxim remains…buy when there is blood on street.So,even if everything goes right,there is a high chance that markets will take a beating at some beating.It seems a prudent idea to stick to one’s holdings,weed out the not-so-good ones(my current policy is to delete the one with moderate growth & a low dividend payout :D) & staying patient.

Best returns are made when one buys in times of ‘bloodshed’.Case in point: Bajaj Finance.We used to have regular discussions on the BFL thread when the stock was around 1250.Then when the August crash took place,the stock price plummeted to 980 on a closing basis.But most of us were too scared to buy the stock when it was down 30% from our buy price!! Today the stock is trading very comfortably,above 1800!