My Dream Portfolio

DocDhiru · June 7, 2020, 4:52pm

Hi respected members
I m since in market since 4-5 yr.
Initially not too serious, but thought to make long term portfolio this year January.
I started reconstruction of portfolio this January only. I was about to just complete, downfall started.
I continued my work.
Now i want to share my holdings.

S. No. Stock Name % holding. Gain/ loss

    RIL.                          5.6                        6.6

    HDFC bank.            3.2                      - 2.6

    HUL.                        4.6                         0.6

    HDFC.                     4.0                      -10.86

    Asian Pt.                2.1                      -10.18

    Bajaj fin.                 4.5                      -23

    HDFC life.               3.5                        3

    Titan.                      2.96                   -14.65

    Britannia.               4.7                       12.34

  Bajaj Finserv.         1.1                       11.5

  ICICI LombGIC.      2.6                       -4.5

  SBI Card.                 2.77                     -4.58

  HDFC AMC.           7.68                       0.84

   ICICI Pru Life.       3.3                         9.3

   Avenue superM.   3.2                        21

  Bandhan.                 1.68                     -11.6

  Abbott. Ind.              3.4                        13

  Havells.                     1.6                       -8.1

  IGL.                             2.0                        6.5

  LTI.                              1.6                        8.18

  Info edge.                   1.7                       -6.8

  Bata Ind.                     3.3                     -12.8

  Astral poly.                 1.8                     -11.18

  Atul.                             2.2                      -2.8

  IDFC First Bank.         4.1                     -22.7

  Polycab India.             2.0                      -22

  Minda India                 2.4                      -16.5

  Sandhar tech.             2.4                      -27.5

  Fine organics.            1.6                       -4.76

  Deepak Nitrite.           2.6                       11.7

  Sirca paint.                 3.6                         2.2

  Infobean tech.            1.9                       1.68

  Tyche industry.           1.1                       1.65

  Amber enterprises.    1.2                       3.96

  Miscellaneous.            2.0                       8.5
   Net portfolio loss.                     -5%

RATIONALE OF INVESTMENT AND COMMENTS:

. Horizone is long term only.
. Well diverified portfolio.
. Leader/future Leader/ high growth stock.

. Distribution: Large cap 66%. Mid cap 26% Small cap 18%.
.
. HDFC bank is most trusted and stable growing bank.
. IDFC First Bank is Bank of future. Retail banking. Trusted management.
. Bandhan Bank has great future. Banking in unpenetrated area.
. Reliance Industry is number one company of India. Great future on Jio plateform.
. Speciality chemical stock (Atul, done organics, Deepak) has future as demand is going to increase because China factors.
. Insurance sector has great future ahead.
. Tyche industry is ultrasmall cap stock. Smallest company with USFDA approved facility.
. Sandhar/ Minda India have great future d.t electric vehicle.

DocDhiru · June 7, 2020, 4:53pm

Views and comments are welcome.

Dragon · June 7, 2020, 5:35pm

Its better to buy one index fund instead of so many companies and I am almost certain that index fund would definitely beat your 100 stock portfolio.

Correction: 35 stocks are still too much and you can eliminate stocks where you dont have meaningful allocation. You can write down the rationale for all the remaining stocks for some quality suggestion from boarders

DocDhiru · June 7, 2020, 5:55pm

Please see it again.
Only 35 stock are in portfolio.
Out of which 66% investment in 15 large cap stock.

DocDhiru · June 7, 2020, 6:00pm

35 stock portfolio. Please don’t exaggerate.
My target it to contain 30 in 6 month.

vikasbargale · June 7, 2020, 6:09pm

Its humanly impossible to track these many stocks.
So try to reduce the number to less than 25 which is managebale.
So consolidate maybe sector wise. Buy single bank, single BNFC, single pharma something like that.

Regadrs,
Vikas

sham72942 · June 7, 2020, 6:27pm

Please don’t post for suggestions seeking quality time of VP members if you are not willing to dedicate enough time to write your conviction for all the stocks.

I guess one ought to have 50-60 hours a day to track all companies, or else your efficiency is 2-3 times than average human:- You surely are a demigod.

I want you to take a cue from above sarcasm!

Suggestions:

Please aggregate them into categories then others can give more meaningful insights.
Its always & always bad to be invested in banking/finance during market crash, see the past crash & how rapidly individual industry recovered, banking/finance took the longest, I roughly 10 & around 28% of the portfolio(never again let anyone else do these calculations for you).

You should never invest in a sector with more than 20% of portfolio, but my suggestion is for the next 1-2 year make it 10% or less instead of 28%, keep HDFC Bank & HDFC AMC or Bajaj Finserv(only 2 with 5% each)

What is Miscellaneous, never do that!
Few sectors are poorly assigned weightage, either don’t invest or either assign 5-10% so that it’s worth tracking
LTI with 1.6% is your only bet to the tech industry, I would suggest to add HCL 5-6%
Abbot industries 3.4% the only bet to your Pharma portfolio

I mean the sectors which are sure to give 50-100 % returns in the next 2-3 years have been given the least weightage?
Pharma, Chemical, Technology should be assigned 25-40% of the portfolio.

To be fair, your’s is the true example of over-diversified portfolio, one that should be taken in the books to teach what not to do in equity investment.

akhilgulecha · June 7, 2020, 6:49pm

My mistake. I confused your percentage distribution for number of stocks

However, even 35 stocks is too many for a single portfolio. It’s better to invest in an index fund or a mutual fund.

Just think of it this way, you have 1.7% in Info Edge. Even if the stock doubles, it will barely have any effect on your portfolio. To generate alpha returns, most of your stocks will need to do better than Nifty or sensex, which is very difficult when you have 35 stocks. Too much diversification is a problem too.

bheeshma · June 7, 2020, 7:12pm

Hi @DocDhiru

At first glance, your portfolio consists mostly of bellwether cos with a strong and established market position, so it can be maintained with minimal tracking. Its also a good idea to have a tail so that if you develop market conviction on a smaller co you can switch quickly. The only downside i see is valuations are on the higher side ( HUL, Dmart etc) so if there is a slowdown in growth , prices can go south or sidewards quickly.

What i would suggest is add a column at contains the CMP and its 200 day moving average. This will give you a quick & dirty idea about how stretched the valuations are and then you could act accordingly.

All the best
Bheeshma

DocDhiru · June 8, 2020, 1:59am

Hi @bheeshma.
Thanks a lot for all suggestions.
I m trying to contain 25-30 stock in next 6 month.
My view is long only like 15-20 yrs.
That’s why i have selected mostly established market leaders, where less tracking is required.

gurjota · June 8, 2020, 4:24pm

Hi Dhirendra,

Sharing my 10 cents. I believe most of the businesses you’ve picked are rock solid market leading franchises and businesses and should do well over the medium and long term. I have not reviewed your allocations though and not much to comment. However, if not done properly it can lead to significant underperformance - easiest to go equal weight.

The main point I want to share with you is to find your own style of investment. That is a journey for most people. It takes time to understand yourself, your psychology, your behaviour under stress, what gives you peace and comfort, etc.

Hence even if you have a 35 stock portfolio right now - or even if it goes up to a 50-60 stock portfolio, it’s alright! Do what you think makes sense and sounds right to you. There are no hard and fast rules that active investors can only make money through concentrated stock portfolio. It’s much easier to identify good businesses than to pick and choose between them and then also identify ideal allocations. All of this is a time consuming process and journey and even I’m learning as we all are.

Anyway, sharing this if it helps - a not so well known investor Walter Schloss was a firm believer in diversification and easily held >75 stocks in his portfolio at most times going up to a hundred.

Walter Schloss on diversification
“Think you can have different mistakes, such as putting more money on a stock that is going down … We didn’t lose money very often, which is why I kind of pushed it out of my mind. We didn’t sometimes buy a lot of stocks. I own 100 stocks most of the time. That way we have a big diversification.”
https://www.gurufocus.com/news/764936/walter-schloss-on-diversification-and-macro-economics-

And for all these people, who come out say such portfolio’s can never beat an index mutual fund, here’s his record:

“Walter Schloss was one of Buffett’s Superinvestors of Graham-and-Doddsville. He had an incredible track record of returns over his investing career, achieving a 21.3% CAGR over the period of 28 and a quarter years from 1956 to Q1 1984. And, he did it while keeping his own expenses to a minimum”

Don’t just adopt whatever anyone says here or even me for that matter. Find your sweet spot, create yown turf and you shall rule!

DocDhiru · June 8, 2020, 6:27pm

Hi @gurjota.
Thanks for your valuable comments.
I feel I m learning investment day by day.
Will keep displine in my investment as much possible.

DocDhiru · June 8, 2020, 6:36pm

Thanks a lot @sham72942 for your suggestions.
First i would like to tell regarding writeup.
I feel that’s people in this forum are great n have depth of knowledge.
Most of things are discussed about my all stock in this forum. So i thought i m not having anything extra to tell.

Regarding Pharma i m having Tyche industry in addition to Abbott. Tyche is smallest Pharma stock in terms of market cap(100 cr) having USFDA approved facility.

In IT… I feel TCS and Infosys are not going to perform with pace they have in past. So chosen LTI.
Another IT stock in my portfolio is Infobean technology. It’s again a 300 cr debt free company on increasing Revenues n profit each quarter.

DocDhiru · June 8, 2020, 6:42pm

My high conviction microcap stocks having capabilities for multifold return in long term…

Sirca paint: New plant in India. Italian technology. Growing distributor base. Honest management.
Tyche industry: Ultramicrocap. Profit n revenue growth. High quality approved facility. Generics like Tamsulosin n chondroitin. Major income through export.
Infobean technology: Newly listed. Increasing revenue n profit each quarter. Acquisition in American n European countries.
Sandhar Technology: New listing. Debt free.High quality promotor. 18 manufacturing unit. Tesla is customer. Great future d.t electric vehicle in next few years.
IDFC first bank: Need no introduction. Increasing CASA, NIM n profit each quarter. Retail banking in focus. Mr Vaidyanathan.

Above 5 have approx 14 % allocation in my holding.

I truely believe above are new generation high growth potential stock.
Pls give your view.
Tx

Lakshminarayana_K_R · June 9, 2020, 1:43pm

In Excel sheet track the monthly returns of your portfolio and index over 1 year,then you will get fair idea is it possible to beat the index with these stocks.
Another way is search a fund which invest in these stocks or mostly in these stocks.
So, By paying 0.5 to 1% to MF they can track and manage.

lokeshreddy2007 · June 9, 2020, 6:46pm

why should beating an index should be criteria? You should be able to beat top rated Mutual fund by fair margin otherwise it is better to put money into mutual fund

Lakshminarayana_K_R · June 10, 2020, 1:33pm

Mutual Fund also consider Index as Benchmark for performance.
One Index and 100s of Mutual fund. You decide what is easy to track and mutual fund returns changes each day and ranking changes.

lokeshreddy2007 · June 10, 2020, 1:44pm

of course they do and their purpose is to beat benchmark. If you can’t beat or generate returns which is equal to benchmark then i would chose top rated mutual funds based on various criteria.

You don’t choose mutual funds based on rankings but based on consistency:

Have they consistency been in top 50% (if it is 25% the better) for the given fund criteria.
Have they consistency been in top 50% for the risk management (You can check alpha, beta, sharpe etc).
Fund manager retention: Make sure fund managers are not rotating very often.

If you can’t beat Index by margin of 5% then i believe the amount of time and energy invested isn’t worth it. Just give a fee to MF and do something else in life. Just my 2 cents.

DocDhiru · August 30, 2020, 8:50am

My Updated Portfolio
My portfolio consist of 4 category

Coffee can category (approx 45% of holding)
Reliance industries (CMP - 1484)
HDFC bank (CMP - 1086)
Hindustan Unilever (CMP - 2074)
Titan Company (CMP - 1138)
SBI Life (CMP - 883)
HDFC life (CMP - 519)
HFC Ltd (CMP - 1981)
HDFC AMC (CMP - 2524)
Bajaj Finance (CMP - 3041)
SBI Card (CMP - 656)
ICICI Lombard (CMP - 1350)
Britannia Indust (CMP - 3085)
Asian paint (CMP - 1823)
Consistent growth stock (approx 19% of holding)
Relaxo Footwear (CMP - 642)
L&T Technology (CMP - 1522)
Havells (CMP - 604)
Polycab India (CMP - 964)
Fine organics (CMP - 1931)
Atul limited (CMP - 4749)
Aarti industries (CMP - 1038)
Minda Ind (CMP - 343)
Bandhan bank (CMP – 305)
High conviction stock (approx 30% of holding)
IDFC first bank (CMP – 26.91)
Sirca Paint (CMP - 243)
Deepak Nitrite (CMP - 449)
Bajaj healthcare (CMP - 305)
L&T infotech (CMP - 1944)
Sandhar technology (CMP - 209)
Network 18 media
High risk investment (approx 5% of holding)
Bharat parenteral limited (CMP - 294)
Everest organics (CMP - 181)
Nikhil adhesive (CMP - 175)
Titan biotech (CMP - 157)
Mirc electronics (CMP – 9.1)
Infobean technology (CMP - 144)

• My holding period is 20 yr plus
• Net portfolio 14% up as of now.
• Category 1,2 &3 are permanent holding.
• In Cateory 4, new stock with great future will be added but at any stage investment in this category will be less than 10% of total investment.
• Investment in BFSI sectors is approx 38%.
• Investment in IT/Pharma /Specialty chemicals/FMCG is approx 40%%.
• Suggestions are welcome.

Vijay_Kiran · August 30, 2020, 9:24am

Thanks for sharing your PF and rationale behind. For your 35 stocks people gave some sarcasm loaded with efficiency remark and if I disclose mine full PF i am afraid that I will be beaten left and right (pun intended).
IMO, you should develop your own style keeping vision, conviction, financial goals in mind. The long term approach will give you the best rope to move along. Don’t get swayed by concentration vs diversification debate. Be at peace with yourself and keep learning along the journey. Add please be mindful of tracking your PF performance periodically and aligned with your long term goals.
Your most of the stock selection is good and so need not worry in short term. Mine VK PF too has some commonality.

Happy investing journey.