I think for many investors, who start, the clarity we had is not 100%, because as time passes, the learning and experience increase, and we may look at investments differently, it is possible that our entire construction of our PF may change, for better of course.
This has happened with me, and I believe this continues until it stops for a reason, and the progress, even profitability has been good. Time in the market helps.
Of course, there are some investors who have good understanding even at the beginning and had continued the same path for years, and as such, a conviction develops, which yields to great returns.
A journey for sure, with good learning and probable results.
@Mudit.Kushalvardhan sir, can you pls share your thought process behind selling Deepak Nitrite. The peg ratio is quite lucrative and business still has competitive market advantage.
We all know all the thesis points of Deepak. All its strengths and good side. And i did a mistake by investing only by looking at these points at very high valuations. But what are anti-thesis of deepak? Is it not a bulk-commodity chemical company? If it is, then does it warrant premium valuations? And then those accidents…I am not trying to dissuade…Point is , dont fall in love with your companies, otherwise you will develop confirmation bias. And we need to look for Consistent performance…not based on some tailwinds like china+1 etc, may be this is not applicable for deepak. Overall for chemical sector from 2018 to 2022 was a roller coaster ride…if you dont personally like such cyclicality, then dont attend chemical companies party…As Rakesh Jhunjhunwala used to say…You dont need to attend all parties in the town…Go to only those parties where classical music or gazals are played, not the rock or pop ( to each his own)
I think, some of the stocks sold could be surprises in future (positive).
TCS can do well from here as valuations are now lower and from here, there could be pain for only few quarters.
Kotak Mahindra Bank may have a long run way ahead, if it decides to list some its subsidiary businesses.
Other candidates sold may not give huge returns in future, so that looks sensible.
There could be some negatives in investing in NIFTY50 or NIFTY Next 50, as some times, they hold poor quality stocks (high debt, No or Low corporate governance, Cyclic stocks). Ideally an investor should stay away from such businesses, but since these businesses are part of the NIFTY50, all will invest in it, but I am not sure how that makes it a good investment. I am not against it but I do not personally like to invest in the poorly managed companies just because they are part of some Index. I still prefer actively managed funds and/or direct stock investment and so far I have not found any thing incorrect in this.
Some actively managed funds will not outperform Index, but as long as their investment approach looks suitable to me, I do not change the fund.
Some important disclosures, as i feel it is my responsibility to do so…if and when i change my thoughts…it might be surprising for some, as i have changed my thoughts in short span of time…
I am thinking of buying again
Kotak bank
Hul
LTI-Mindtree
And also put on hold selling plan for
deepak nitrate
Alkyl amines
Berger paints.
Also forgot to mention earlier, i also sold off Havells.
So effectively, I will be selling only
Muthoot Finance
Laurus Labs for sure.
Reasons for change in stand-
Got some inheritance money, and not comfortable putting it in index or Mutual Funds
All my stocks have been good…even those which i sold or was thinking of selling. Many times, selling and buying decisions also depend on portfolio size too and your increase in risk bearing capacity. Also its relative decision with respect to other stocks in the portfolio.
Lastly , I would like to quote John Meynard Keynes When facts change, I change my mind, what do you do, sir?
The change does not need to be with facts, it could just be with the situation we are in. So if we are clear about the situation, about the decisions we are taking as per the changed situation, everything will be fine.
But if the change is about any emotional aspect, then I guess it is better to record the reasons for the decisions, so that it can help in the future, if we reverse our decision, although this is not necessary if we have got experience. After we gain some experience I don’t think we swing too much except for an occasional investment like an IPO or an overvalued stock which we chose not to invest before.
This is one of the reasons why some investors are opening threads recording their thoughts, so that they can come back later and check.
I generally read FreeFinCal plumbline and check whether those funds suit me.
After that, I use various web sites like Morning Star, Value Research to see consistency of the funds, Alpha, Beta etc. and also underlying portfolio. If I am comfortable with all these aspects, I invest.
I have invested in active mutual funds mainly during 2004 to 2015. After that, mostly I have not made any major investments, since those funds are used for few Financial Goals which are due. Mostly I am now shifting funds from Active Equity MF(s) to Debt/FD based on my requirement of the goal.
I have not changed my funds much after 2015, so returns are reasonable. Also, I do not keep comparing fund performance much, if my XIRR returns are good i.e. Above some percentage, and as long as I am able to achieve my goals. I am not chasing returns but I am focusing on goals.
After 2012, I am mainly investing directly in stocks, for few goals which are still multiple years away.
sold DSP Midcap 150 Quality 50 Index as this factor index is not at all performing. Instead of this, SBI midcap 150 Index without any factor, is performing very nicely.
Agree that its too early…but then SBI midcap index without any factor has perfomed way better than this. Also remember, its not an active fund, its passive index fund only with just some factor …so if in same timeframe, its not performing even equal to normal index then there is a huge chance that the chosen factor is not worth investing in…Had it been an active fund, may be some time should be given to that fund manager…
HCL Technologies ( after holding from 2021 , more than 2.5 yrs and some purchases in between…returns are absolute 9%)
Berger Paints
Bought : -
Uno Minda
Mold-Tek-Packaging
Sold -
All flexicap funds like Parag Parikh etc as well as Focused funds like SBI focused and Quant Active Fund.
Only kept Small cap fund Like SBI small cap , Nippon Small cap and Quant small cap fund.
I have kept only 6% into mutual funds .Remaining 94% into stocks. I am planning to make my portfolio more concentrated. So going forward some more selling will happen.
I will keep updated.
Why are you selling Lauras Labs when things seems to be improving now and mutual funds have started buying it(smart money is coming back)?
Please provide your point of view on selling all active flexi cap mutual fund and the index funds.
Why buy Uno Minda vs Pricol?
When you sell something, how do you allocate the money that you get? Please provide some examples, it might help me as it is one of the problem I face.
Is your selling of stocks based on independent reasons exclusive for each stock, and does selling your MFs also include the reason of active management of direct equity, so more returns than MFs?
Are you changing your process of your investments, or giving it a different form?
Not sure why you are selling so many funds and stocks at one go. Is it because of recent out performance of smallcap funds? IMO, they will also average out after a period of time.
Laurus Labs , I am holding from 600 levels. Its a company which has many variables which I cant live with. Of course, it may come up again, but I don’t have stomach to digest such volatility in business performance. I am okay with stock price volatility but not business volatility, Businesswise, i want secularity in sales, net profit as well as margins too.
Uno minda i liked because its return ratios ROCE etc are very good. It has consistent sales and profit growth. I have not studied Pricol .
I have a weakness that I cant hold cash. .I hate cash. So I immediately deploy the cash among my existing stocks in portfolio. I fear that if I dont deploy immediately then I might spend it on shopping. Or somebody may borrow from me, whom I cannot refuse.
If you dont have such psychological problem then you can wait for stocks to go down and then slowly deploy it. To each his own
My Portfolio thread has a heading “Passively Active” , but after my reading of Pulak Prasad book and from my own experiences, I have come to the realisation that “Passive” doesnot mean Index. Rather Indexes are very active , to think of it. Every 6 months, they do modification of indexes, Some stocks enter into index, while some exit from index. Its quite active.
My definition of Passive is, buying good businesses and hold them for very long time, unless their business deteriorates.
And since almost all Active mutual funds, have very high turnover, as their investors demand them to buy and sell frequently, they are not holding good businesses for decades, which is now my requirement. So i decided that, I will sell all Flexicap and hold direct stocks only, so that I needn’t sell them under any pressure. Now I am not worried about CAGR returns, I am aiming at how many times my investment becomes over a long period,…
So now I dont want to hold elephant stocks like HDFC bank or Infosys or HUL as they will give me Index returns, Since my time horizon has become permanent owners, I want growth companies. Even among Large cap I want Bajaj Finance, Chola Finance, SRF, Titan, Polycab, LTIMindtree type of companies which are even after becoming Large caps, they are fast growing companies.
I dont want to hold companies, just because they are big names and their past history has been stellar and ppl have written books about them. I want to invest in companies which are performing today , their sales are increasing , their profits are growing, margins are improving and ROCE is consistently high.
