Dear all,
I am Vinod, a physician by profession, started investing in stocks 4 months back. Below is my portfolio which I intend to keep for long term(7-10 years) with monitoring of these scrips on QoQ basis. My risk appetite is moderate-to-high and rationale for selecting these stocks is based mainly on my personal broker, stockaxis, valuepickr and several other forums.
Request you to kindly share your views and help me correct any mistakes. Thanks in advance.
Hello Vinod,
Please provide your rationale behind picking companies in your portfolio. It will help fellow boarders to make some constructive feedback.
Being new to this game, Primarily I trusted Stockaxis’ recommendations and used mmb, valuepickr forums to validate their recommendations. Apart from that, my personal broker has suggested NILE, WEBELSOLAR & FACOR ALLOYS.
I think you should begin by investing in blue chip companies with strong
balance sheets while reading the masters like warren buffet letters, Peter
lynch, etc.
You could also invest in five star rated mutual funds by value research
online.
I am telling you from experience that many of the small and midcaps stocks
could fall 50-80 percent in case of a correction.
While both good and bad stocks fall in a correction only good company
stocks bounce back.
Emmbi is good, Igpl, natpro, trident ok, rest may perform or not, downward risk is more
If you want to keep for 7-10 years, certainly this is not the portfolio as there are too many cyclicals. For long term investing, we need portfolio where companies have sustainable profit growth for long term. My suggestion is same as suggested by Shiv Kumar.
Can you provide more details about Webel solar. They have other income of 77 CRS approx due to which P/e looks to be less than 3. Any idea whether this is sustainable?
Thank you Shiv and Rajesh for your valuable opinions and Kudos to Cshar for reaffirming some of my scrips.
I will certainly exit the cyclical stocks like Nile and Facor when the time is ripe. It’s just that I am willing to take more risk now to have a bigger capital to invest in blue Chip stocks. I would be grateful if you can point to the weakest scrips in my portfolio so that I can exit them first.
I too agree with comments given above regarding downward risk… when I had started even I have picked stocks expecting great return in small amount of time. But those stocks have given me -90% returns.
The numbers are very often manipulated and market knows this and hence stocks may look cheap. This no book will teach , you need to be in markets for sometime to get this and first and second rule of investing are even if you don’t make money… never lose money in markets… have patience and wait for the right opportunity in quality companies…
Some of your picks are good. However, I do not encourage investing on recommendations. Rather my suggestion would be to choose a good MF or PMS and allocate maximum money in that. You can keep a small amount with yourself which you may invest just to gain some experience. Invest more time in reading good books which have been suggested by many senior members and gain a thorough understanding of the art of investing. Whenever you gain success or failure in any stock, you must know why a bet was good or bad. You will only know it when you have conducted research on your own. That experience cumulatively will help you learn a lot and gain from investing in long term
This is the mistake all stock investors do in their initial investing years. Buying small and midcap stocks is a business of experts. Learn stock market basics by investing in reputed brands.
Start with your kitchen, living room, study and daily buying habits.
Which atta, Basmati chawal, Health Drink (as a doctor you might not drink any!), Noodles, Biscuits etc are you buying?
Which drugs are docs prescribing? Which OTC medicines are people buying?
Do you paint your house once in 2 yr? Which paint? Which car are you/your family/your friends are using?
Start thinking this way and buy stocks accordingly.
One can go wrong in valuation of stock but can’t with the stock (company).
Main thing will be preservation of capital as far as practical.
Buy INDUSTRY LEADERS.
Regards.
Another thing…Please follow valuepickr and specially posts and old threads of Donald ji, Hitesh ji, Mittal ji and other senior members…
Hi Vinod,
I have only 6 years of experience but I would like to share the mistakes i did which you can avoid :-
initially i also invested purely based on recommendations without going into the details and logic. As a newbie we are excited but lazy to read the detailed research report. Also simply reading the research report is not enough , because it can be easily made rosy. You must read through the annual reports and understand the basics of the business. This helps you build conviction and confidence and you are not scared even if the stock cracks as the long term story is intact.
When you go into details , you know the potential. In your above post you commented that you will sell stocks like Nile when the time is ripe , but no one can perfectly time the market. Have faith in long term story and hold it. Dont get tempted to sell if you are in good profits. Eg :- i remember buying maruti suzuki for 1100 and i sold it for 2500. More than 100% gain but today its 7000+. This is mainly because i could not judge the true potential of this stock.
You are a physician and probably have some good knowledge about medicines and may be medical equipments and know which companies are doing well. I have been working in auto sector for 9 years and still never picked up motherson sumi which was like a blind buy. So look around may be you have an idea in front of you but you are not aware of it.
4)Out of all the stocks mentioned by you i only know about kovai medical and nile. I didnt invest in kovai medical mainly as the company spent a huge amount on its silver jubilee celebrations and the salaries drawn by promoters looked high.Nile is a good commodity play.
Thank you Alphin, Nolan, Deb and nowin for taking the time off to write such lengthy posts. I now realize the risk that I am taking truly and will take steps to amend.
Did not expect such an overwhelming response from people here. Thanks guys.
Hi Vinod,
Congrats for starting equity investment. According to me long term portfolio must have a mix of large cap, mid cap and small cap shares. Like some senior members suggested you can buy consistently growing companies from different sectors like Banking/NBFC/Housing finance, Pharma, fmcg, automobile, Paint and chemical and others.
I also started 2 years ago by buying companies with price below 50 thinking it will go up faster. I realised my mistake very fast and changed my strategy and started looking for companies with consistent profit growth over 5 years time, less debt, having future potential and a trustworthy management. Now you won’t believe me I have bought my first share of eicher motor last month at Rs 33150. I suggest you to look for either growth or value in every company you invest. Also have a good allocation to large cap and mid cap. Keep small cap exposure less.
I have emmbi and nitin spinners in portfolio and i expect them to grow well in 3 to 5 years. Emmbi I bought recently because they are growing at above 25% annually and has started pond lining business which seems to be a high potential area for them. You can go through Emmbi board for more details, already our senior members have done a great job analysing it.
Thank you very much for your suggestions. Really glad to know about views on Nitin and Emmbi. I guess I need to book loss in Fiberweb and Kovai medical center to begin with and invest in large caps. Also, I need to exit commodity scrips soon and enter in growth based companies.
Portfolio as many have mentioned is not good for long term, if we just skip what the portfolio is and all that, the basic thing you should be first doing is to learn and understand why you are even holding the company you bought, you should know what the company does , should have read AR’s of it should have checked forums to see if the stock has been discussed and in VP forum many of the companies are discussed very widely. You should learn what cash flow is , and all those small small stuffs so that you will be aware of what exactly you are holding, this is a bull market and thats the only reason many stocks are performing. Once the tide turns its too bad recovery is not even a thing to expect in many names. Personally mistakes made in 2008 has never been recovered till now in many of my picks at that time, so its just that make sure capital is safe even before thinking of returns.
learn from Vp forum, Dr Viajy malik blog, and follow many rational investors in social media to learn how their thought process works, never buy blindly because it was recommended by someone.
Hope it helps. All the best
Hi
% of Share I Under-stood as Holding percentage, please note the following:-1:
Vinod, I have slightly different take on your portfolio than others.
I would not advise you any strategy about holding %, no of shares nor even the market cap of each scrip. Everyone is different and so you can do what is comfortable to you.
It is even ok to invest based on discussions on various forums as long as you know the quality and capability of the person advising things. Learning which info to trust is a part of maturing as an investor; one cannot speed it up at will.
The only advice I would give, which should be true for all investors and for all market conditions, is NOT to invest in any company unless you can rattle off a list of negatives or potential negatives about a company you want to invest in.
That is the only way you can ensure (to some extent) that there is no permanent capital loss. New investors, I have found, are good at judging upsides. But they somehow have no ability to judge the possible downside. Suzlon, Lasa, Fiberweb, HEG, 8K Miles, Intense, the list is endless.
That ability primarily comes when you go through a bear market, where your stock price keeps coming down for no apparent reason. And you keep wondering why the market is so stupid. And you keep salivating at juicy valuations offered to you, until the day your company starts reporting falling numbers. That is the day you grow up as an investor.
Stock markets are inherently risky. That is why they pay you much higher than bonds.
So go ahead and invest as you want but before following anyone’s advice on upside, ask them about the downsides. You may find most so-called advisors don’t even know the possible downsides.
I survived 2008, you will survive the next bear market, too. Best wishes,
Kindly refrain from going by solely on star ratings while deciding on mutual funds. Star ratings are awarded basis relative returns to peers and are subject to change every quarter. This throws up several issues - firstly only past performance is considered. Second, peer comparison is useless when there is no uniformity on the classification of mutual funds. Further, this encourages extreme short-termism. If one invests in a 5 star rated fund and subsequently it becomes a 3 star fund, should she then redeem and move to another 5 star fund? I’m sure you see how silly this is.
