I wanted to share details of my portfolio to get everyone’s thoughts and feedback. My portfolio construction philosophy is the following:
Have 2 accounts - one for my investment picks and another for picks based on subscribed smallcases. I use zerodha for my picks and upstox for the smallcase based picks. This post is for my zerodha picks
I am not a buy-and-hold-forever type of investor. My idea is to book at-least 1.5% of portfolio value as profits in a month. I have been doing this consistently over the last year. My logic is if I feel Mold-Tek is a good buy at 266 and around 3L INR is my target investment in the company, I will buy 3000 shares instead of 1000 and sell 2000 shares when it goes up 50%, lowering my cost and booking profits. I am sure you will not believe it works but I will be posting regular updates here and show when and how I do this
I will only invest in consistently compounding firms taking large positions and exiting partially at high valuations. So I am a buy-and-hold person but will continually reduce cost of ownership of my stocks.
I might buy cyclicals or companies like Neuland, Sequent etc but they will be for purely trading purpose to reduce the cost of my portfolio. I believe these are mean-reverting stocks. I have in the past bought Neuland around 900 and exited 50% around 2300 first and last week when it fell to 2050. Sequent I bought at 140 and exited at 270 and 240. I will be posting these updates on this thread regularly to show how I generate consistent trading income of 1.5%-2% monthly over the year.
I believe holding a stock is equivalent to buying at CMP
|Instrument||Qty.||Avg. cost||LTP||Cur. val||P&L||Net chg.||Day chg.|
|HDFCLIFE||T1: 500 0||666.75||670.75||3,35,375.00||2,000.00||+0.60%||+0.30%|
|RELIANCE||T1: 100 200||1,907.40||1,937.30||5,81,190.00||8,970.00||+1.57%||+1.26%|
Here is my rationale for the holdings:
Abbott. Purely India pharma play. They keep introducing several new products yearly and all of them are blockbuster drugs. They are highly regarded by doctors.
This is a defensive bet. I will not sell this even if it runs up. The idea is that if the market crashes also, this will hold its value or increase. I won’t be surprised to see this go up 50% in a year where markets tank by 20%.
Bayer Crop. Similar to Abbott but in the agriculture play.
Biocon. The best Biologics play in Indian market. Ethical promoters. Great management. They hold a lot of Syngene also. So you indirectly hold Syngene. Syngene is more like IT services. Biocon is like IT products. They have a great R&D team and one more positive for stock is that the old CEO is back with the German CEO fired. It is available at dirt-cheap valuations now considering future potential. Biocon Biologics spin-off could be a huge play on the stock.One block-buster drug and I won’t be surprised to see this at 4X in 5 years.
Coromandel: Fertilizer and pesticide play. Indian fertilizer market is government controlled for nitrogen based fertilizers. The risk is mostly on input prices, where They also have done back-ward integration reducing raw material cost. There is a lot of reform happening on the fertilizer front. Coromandel operates in the P and K side of the fertilizer market. They have international presence in pesticide market also
DCB Bank: This is more of a ‘value play’. Company is trading at dirt-cheap valuations. There will be some point in the next 5 years when the market recognizes the value of the stock as 3X from here
Fine Organics: Consistent Compounder Coffee-can stock. One of the best plays in the chemicals sector
GMM Pfaudler: They bought out their parent company and by doing so, they now own the IP for their products. They also bought out their second largest competitior in an oligopolistic market. This is an earnings compounding machine
Goldbees: Hedge play. Some Gold in the portfolio is good
HDFC Life: The best play in the Life Insurance segment. Period
ITC: Dividend machine. Defensive stock. Value waiting to be unlocked. At some point, they will break into separate listed entities of hotels, FMCG and cigarettes. I know buying ITC is inviting criticism but I will hold and add at every opportunity. Hugely under-valued and waiting for Mr Market to recognize its value in the coming decade
McDowell: Alcohol is hugely taxed in India. As India gets more higher earning people, McDowell will become like FMCG. Alcohol consumption in India is very low
Mold-tek Packaging: They pack all the FMCG products and also revered Baba Ramdevji products. Huge upside from here. I reduced my position by 2/3rd at close to 480. So this is almost at cost for me or below
Nestle India: Compounding machine. Nothing to say more about Nestle. FMCG Giant
Reliance: Looking to add more of Reliance as it is Retail + Refineries + Telecom. FANG companies are not fools to invest in Reliance.
Sanofi: Like Abbot, this is a domestic pharma play. One more thing is that the dividends given are very good. I got almost 400 Rs per share dividend this year (375 Rs I think to be exact per share).
I am sitting on almost 25% cash that I hope to deploy in the coming weeks of this month. This has been a tough market for those trying to find good entry points into the market as the market keeps trending up especially quality stocks are being purchased at any price.
I have been able to generate consistently 1.5%+ from short term trading using my philosophy in the second bullet point from the top. I know this does not resonate with all but the only real money is the money in the bank. Booking periodic profits without exiting stock fully, gives me the happiness of having made real money
My upstox portfolio is different. Started recently. Again invested capital is around INR 1 crore equally among the following smallcases:
- Capital Mind Momentum Smallcase. Deepak Shenoy is a man of trust and principles. The site is hugely informative and educative
- Negen Smallcase: This is an Opportunistic smallcase where we top up as asked by Negen
- Momentum smallcase of Wright Research
- Benign Capital: Dual momentum smallcase
I plan to benchmark my performance over these 4 smallcases and also see which of these smallcases work for me.
Overall fully invested in equities and keep around INR 1 cr in IDFC Savings bank for their attractive 6% interest. If market crashes, this is contingent money to pull out