seems a good selection but so many to follow. I think there is nothing wrong with having so many stocks in a portfolio but stocks should be acquired with time when you get it at a really cheap price as every good company cant be at their price at the same time.
Another thing I want to add, the only thing I am seeing is your portfolio is you have just read somewhere that if you acquire stock for the long term you going to make money. actually, that’s not wrong but you seem to have paid the highest price for everything.
Please try to understand the concept of value its tough to hold something for years when it’s not making any money. In the next ten years, you surely going to add more shares so why you already added around 30 share at once at that high valuation.
Agree Gaurav! I was trying to do a core protfolio which i can hold for the long term and for sure compound my returns over a longer period and hence was not making sense to see in the short term if these large cap stocks are too much overvalued or not. do you think over an horizon of more than 10 years it will make a difference? what do you think are some stocks for which i have overpaid ?
I have SIPs into Mutual funds and also building a portfolio on momentum side (both of which are almost the same size as this one ) and will plow back more in to this as and when there are dips or opportunities.
I’m new to his field so please take my opinion with a pinch of salt.
Considering that you have 60 pc in large caps, why don’t you put that 60 percent in well managed large cap mutual funds?
You can actively manage the rest.
Essentially the whole point of managing monies yourself is that you can identify opportunities and bets, which fund managers cannot take advantage of, or which you can do better than mutual fund managers.
When it comes to large blue chips, the individual investor is usually not in a position - in terms of information, acumen, or time, to beat a professional fund manager at his own game.
You can spend your time on mid and small caps trying to maximise your relative returns, while incurring less risk, since your primary funds are professionally managed.
Thanks for the feedback, I have realised over a period of time that anyways most of the MFs are putting money in blue chips only. so when i am investing for the long term, thought why not hold the best of the best yourselves instead of paying a fund manager to hold.
Anyways sorry for got to mention this is my core portfolio which i want to hold independantly and transition my other investments over a period of time to here as a goal. I am also investing in SIPs in MFs and also in momentum strategies currently gradually want to move everything to my core.
I don’t know what is popular belief but I believe whenever you are buying stock for the long term like 10 years that’s the time you should be more cautious about price. For instance, you have bought bajaj finance for 5200, suppose after ten years it will triple from here then you will be making triple of your money. But my bajaj finance buy was 2000 if I hold it for the same period of your i.e ten years I will be making 8 times of my money. plus I will be having the advantage to hold it even in a bad year bcz my buy price would be very low.
Second example, you have bought butterfly gandhimati for 632rs. I hope you understand that the market is quoting this price by assuming now company going to have good days ahead, even in average performance I don’t think it will able to maintain its performance.
The bottom line is I believe if you are making the portfolio for the long term your portfolio should be lil conecntrated. You can add more stock with time. The same stock you have bought thinking for the great performance ahead may not be able to be in fashion anymore. wall street will find another great stock which everyone is talking about. Just my personal opinion pay according to value even if you are buying for 10 or 20 years.
Thanks appreciate your comments on the over paid stuff.
My idea and thinking behind it was if i avoid cyclicals and concentrate on Bank/ IT/ FMCG stocks which have consistently grown. The overpricing parallax error in one stock will be compensated by profits in another, except if all of the price valuations are completely awry over the longterm which i feel is highly unlikely.
Also, I actually went through each of your small/mid cap firms data on screener.
As you can see, several of the firms in your small and mid cap segments have severely fluctuating sales. (and note that this is just one of the primary screening criteria for stocks, really.) With that sort of sales figures, what is the basis for your conviction and investment, in those stocks?
You might want to check for yourself the data and see if you still wish to remain invested.
edit: cyclicals is a terms for industries which show ups and downs. and some sectors are regularly prone to this which is why they are called cyclicals. however, there is no rule which says a stock in a non cyclical industry cannot be a cyclical stock. Cyclical nature is essentially determined by its sales and profit data YOY as a first step). So if you are avoiding cyclical sectors, why are you holding cyclical stocks.
This is a question I would be asking myself if I was holding to any such stock.
For large positions i have tried to avoid cyclical stocks.
For small cap positions i tried keeping positions based on my assessment on the following -
Strong customer base with a very strong franchise that is building up.
Strong management and high promoter ownership.
In the next few months/years could qualify for significant rerating due to the industries that they operate in and having a relatively low PE currently.
They are all bets. I am tracking almost a dozen more on micro caps, which i would replace them with if i am not satisfied with performance in the next few quarters.
My estimation is even if 2-3 of them become very large market cap franchises in future. I should be on track to get decent returns on the tiny cap part of my portfolio alone today.
I have noticed a lot of people putting a one-liner logic for each stock in the portfolio. I will try to put them in my portfolio too over the weekend and also add a ist that i am tracking presently and the logic for the same.
Just a small thought, at any moment when you both hold it, whatever the buy price but if current value is Rs 10,000 then you both hold equal risk and probability of equal reward in continuing to hold it. The MoS is illusion, as on today, the capital at risk is equal…the origin of that capital is history and what matters is today’s capital…
Pls note above is just my way of looking at things…you may ignore as many don’t look at it this way and have a sense of security in their MoS because of lower buy price…
I didn’t get what is your thought process…as mine does not include presence of any MoS…I tend to forget my buy prices and only focus on today’s price…so no question of rebalancing MoS as for me…that doesn’t exist at all…
The current stock CMP, may not, in fact, will not, represent my capital invested. While evaluating the risk/reward ratio, you have two choices of baseline - the buy price, or the CMP. The risk/reward evaluated against buy price is against actual capital invested. Risk/reward against CMP is against notional profit/loss.
Cant really see them as equivalent.
Edit: I understand that you may be viewing it as - sell all holdings now, and then evaluate whether to buy back or not. But even then, against baseline of CMP, if you don’t buy again, you are at 0, but against baseline of buy price, you have profit or loss.
Again, definitely not the same. Can you elaborate?
IMHO you need to focus just on the implementation of your stated investment goals. Having been in the market for close to 8 years now, I believe the key towards generating portfolio returns is to have the right and decently significant allocation towards the stocks. I am assuming that the small and mid caps in your portfolio is to generate the alpha over your target cagr from large caps. Hence, I would suggest that you periodically calibrate the position in these stocks to ensure decent impact on the overall portfolio. As a first step, I would suggest that you list down the rationale behind each stock and your target investment horizon for each( helps you to objectively evaluate) Then try to bring down the list to about 20 stocks
All the best
Suppose you have 1 stock of Bajaj Finance bought at 5000 and someone else has 1 bought at 2000. If we make your personal balance sheet today, you would enter 1 stock of Bajaj Finance in asset side with value of CMP eg 5000. Your net worth will show 5000 (we are not including other assets for simplification). The other person net worth will also show 1 Bajaj Finance at 5000.
If Bajaj Finance falls 50%, you and the other person will lose the same amount. You both have the same risk.
The other person will say that he invested at 2000 and have lower risk. But after seeing his balance sheet I can say that he invested at 2000 and then he invested the gain at 3000 and so his present investment is 5000.
To conclude, whatever you gained or lost on a stock is at the current price only, there is no point getting anchored to the buy price.
