Mudit's Portfolio (Stage Analysis + Relative Strength)

A nice and simple Interview of Gurmeet Chadha


Since I am from Insurance sector, one thing that I know is, all our Insurance companies whther they are LiC or private sector, they are actually not the insurance companies in th true s3nse of the word. They are actually savings banks. As the statistics goes, in case of LIC, if you check their total claims, out of that only 3% is death claims, while remaining 97% is Maturity claims, meaning, ppl are using these companies as savings banks for the investments and not for insurance. Once that is clear, then comes the financialization scheme in the picture, 10 crore Dmat accounts, ppl are investing heavily in mutual.funds, stocks, so they are less and less into savings and more and more into investments. So i see this like newspaper industry where sun is setting as far as savings aspect of life Insurance is considered. But Insurance aspect , i m not much enthusiastic as indian mentality is such that they want something in return if they invest any money. So pure , where premium is anyway very less and it may not be a good profit making business model as it is, indians are not favourable. These are broad reasons for not investjng in life insurance companies.
For general insurance i am quite optimistic and had some exposure in ICICI lombard. I may think again about it…need to study it.


Thanks for your views. While I agree on above but one can think this way that any company would give what it’s customers want, and if at a lifecycle stage of an economy, people need savings more than protection, then so be it…

But, so much so far…the product mix of most insurance firms are rapidly evolving…and so would the psyche of Indian customers…

A person would need protection only when one has something to protect…and to have something to protect, one would need savings first…and thus the lifecycle…

So, while you are absolutely right in the product mix part and the Indian psyche part, we do not know how the next stage of this life cycle would be…we can take some clue from developed economies which are ahead of us in that lifecycle and I see that protection is significant there…

Having said that, i think life insurance as a sector is not doing that well in US also…not sure why…maybe now the lifecycle of their economy is beyond protection and more towards annuities or Direct equity? And interest rates are too low for annuities to make decent money for insurance companies? Insights welcome…

And general insurance to do well over long term would need tremendous management skills… something I am wary of in anything to do with Finance…

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One observation on IT stocks in my portfolio:
To clarify few backgrounds…I buy stocks in small quantities, just like SIP, but not in any fixed order. Sometimes 2-3 times in a month…sometimes once in 2-3months… so holding period for some units can be more than 1 year or 2 years while for some its just few months.
Observation is , TCS, Infosys, LTI and HCL , all of them are down … negative 15% roughly… all of them are down at the same time and also to almost same extent , over last 2 years…What I infered from it is, all IT services stocks behave in the same manner, and go up and down by similar extent over the same period of time. So although they are all good companies, they are doing more or less same work, so behaving in same manner to overall economy changes and external environment. So in nutshell, they are not providing any diversification in the true sense. TataElxsi behaviour i cant figure out as , I have just started tracking position.
One slight difference is among all 4 companies, TCS is down by 11% instead of 15% in other cases.


@Mudit.Kushalvardhan- How do you find the business model of ’ PB Fintech Ltd’? Does it have any competitive advantage in your professional world?

The business acts as a bridge between the customer and the insurance company. Their portal (policy bazaar) attracts interested customers who are easy to sell. Sold policies become a source of recurrent income in the form of commissions.

Not studied PB fintech. What i heard is recently they have become insurance broker. Earlier they were just aggregators. But dont know much about business model. But since the product insurance is Push product. They wont get much business. Those clients who want to purchase term insurance may, but thats not a What i have seen is, generally people take online by listeing to some so-called expert but since they have not been convinced about the utility of the product, generally in 3 to 5 years they lapse the term insurance. So life of that business is not sustainable. But business through agent has more durability, as he reminds them.for renewals as he has commission interest in renewing it. There are many isuues for online purchase of term insurance at all the 3 stages…Before purchase, while purchasing, and after sales service. Many times , online guys do not make clients aware of moral hazards and implications of mentioning wrong answers or half truths and how it will affect their claims. They , themselves dont know much.


This news is about a threat to policy bazaar

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Seems sketchy !!!
Did not find much material around this but seems to be an idea pushed by the regulator.

If the above goes live and becomes popular, it might act as another channel to sell insurance products. PB has 14+ years of experience to become popular and a channel of choice. IMO, It shall continue to thrive as the industry is push-driven and agent-dependent.


Superb blog as usual from Mr. Sreedharan. No nonsense stuff . If only it was a bit easier to pick businesses good enough for long term holding .

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@Investor_No_1 … Some useful information from Insurance industry, which might give you conviction to hold your life insurance companies.
LIC has around 11,60,000 individual agents while 23 private insurance companies in total have around 14,00,000 agents.
With Sugam initiative of IRDA, each life insurance agent will be able to take agency of 3 life insurance companies to sell life insurance as against currently only 1 is allowed.
Once Sugam platform gets activated by December, 11,60,000 LIC agents will be able to take agencies of 2 more life insurers, surely agents of HDFC life and SBI Life will increase manifold. Even if just 10% agents take agency of these companies, their agency force will be doubled in number. Its a huge benefit for them. And mostly all cream, performing and hardcore salespeople from LIC will go for HDFC life and SBI life… its a big thing…this is going to be a game changer…interesting to see , how this pans out.
Also policy portability is also going to come. Customers will get option to change Insurers just like mobile phone portability or mediclaim portability…
Mr. Panda ( IRDA Chairman) is on fire.


Tata Elxsi did not have a good quarter. Profit and margins reduced.
While KPIT had a record quarter and the guidance for next few quarters are also good. LTTS had a better quarter than Tata Elxsi.
Will you be buying Tata Elxsi on dips? Or wait for a couple of quarters before buying?

Another thing I wanted to ask is, now that you have 60% of monthly income as savings and want to invest, will you buy specific stocks monthly which provide good value or planning to do a stock SIP?

Specific stocks buying will be more emotional and this will skew the allocation as well. One might keep averaging the losers and their allocation will go up.

Stock SIP may be a better option but a stock basket of 30 may not be possible to buy with equal weight in a month.

Asking this because I am looking for a less time consuming framework like monthly stock SIP, which will remove the emotional quotient from it. MF SIPs give this thing but there’s no way to customize the stocks in an MF.

I have categorised my 30 stocks in roughly 9 sectors. So I try to achieve equal weight among all sectors and also among companies within sectors. Just for example, currently I have 12.61% weightage among my 3 NBFCs while 8.45% weightage among my 3 banks. So now i will be buying HDFC bank and ICICI bank to increase their weightage and make it equal to NBFC. Similarly currently I have total weightage of 18.64% in IT…so till the time my all sectors dont come at par level, i wont be doing much buying in IT but since TATAElxsi has lowest weight, i will be adding it, bit by bit sometimes on dip,sometimes without dip…I have low weight in FMCG also so I need to add HUL and Nestle too. Currently my chemical sector weightage is around 17.22 (I m including pidilite in chemicals, some ppl dont) so I wont be touching these companies any sooner. So in normal circumstances, my main focus is in making all sectors and companies equal weighted, so i keep on adding those where weight is less. But in abnormal circumstances like TATA Elxsi was down by lot in last week or Berger paints was down by a lot…then i buy them in chunks. In my opinion, you cannot buy stocks in SIP fashion, because each stock behaves differently at different ponits of time and we are not doing BAAP (Buy At Any Price) here. And the opprtunity that market provides in individual stocks at different point , we have to exploit that otherwise what is the point in investing directly? Then it will be more like SIP in Mutual funds.
Other than this equal weighted strategy in direct stocks, I also have one more long term goal…That is to make all my 3 avenues of investments also equal weighted in the very long time.

  1. My direct stock investments should be 1/3 of my portfolio
  2. My Passive Index investments should be 1/3 of my portfolio
  3. My Active MF investments should be 1/3 of my portfolio
    This goal is too faar away from me as currently my direct stocks is 95% of my portfolio and index and active MF are 2.5% each…so long way to go to achieve above weights.

Passive index investment is through ETF or Index fund?

Index funds.
Uti Nifty index fund
Uti nifty next 50 index fund


Any opinion on Tata Elxsi’s performance and guidance vs KPIT and LTTS?

Any idea on the factor indices like momentum, quality, low volatility

Frankly not studying Kpit and LTTS…for Tata Elxsi, i have just started accumulating shares…it will be a long process. So currently not giving too much heed to its current performance as its in a sunrise sector. I would like to say Abhi to Party shuru huyi hai…why judge now itself

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In my opinion, factor investing or smart beta investing is just a back door entry for active fund management. Since all AMCs are getting aware about rising popularity of Index funds, they have to protect their revenue somehow, thats why they invented these instruments. If you read Jack Bogle, we just need a simple index and lowest fees for it. We dont need any refined form of it.
If you really want to introduce the factors into index investing, then better to have your own portfolio and then introduce factors into it. That way , you dont have to pay any fees to anybody.

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