ValuePickr Forum

My Portfolio_Homemaker

Last 2 days, there was a sharp up-move in indices. I exited, Yes Bank, Page Industries for loss and 3M at break even. Portfolio is reduced to 19 stocks from 22. Plan to scan and buy few good large/mid caps.

S.No Company Name Profit/Loss % Weightage %
1 INFOSYS LTD 18% 10%
2 L&T TECHNOLOGIES LIMITED 1% 9%
3 PIDILITE INDUSTRIES LTD 42% 8%
4 MARUTI SUZUKI INDIA LTD 3% 8%
5 BAJAJ FINANCE LIMITED 97% 8%
6 ABBOTT INDIA LIMITED 35% 6%
7 HDFC LIFE INSURANCE COM LTD 41% 6%
8 GLAXOSMITHKLINE CONSUMER HEALT 21% 5%
9 HOUSING DEVELOPMENT FINANCE CO 26% 5%
10 PROCTER AND GAMBLE HEALTH LTD 59% 4%
11 GRUH FINANCE LIMITED -7% 4%
12 INDUSIND BANK LIMITED 0% 4%
13 AVANTI FEEDS LTD -7% 4%
14 HDFC BANK LIMITED 20% 4%
15 KENNAMETAL INDIA LIMTIED -3% 4%
16 BRITANNIA INDUSTRIES LTD 9% 4%
17 ASHOK LEYLAND LTD -31% 3%
18 GMM PFAUDLER LTD 24% 3%
19 STERLITE TECHNOLOGIES LIMITED -45% 2%
OVERALL PORTFOLIO 14% 100%

What is your reason for exiting 3m? Expected poor performance or reducing number of stocks in portfolio?

Since 1 year the stock went no where then started sliding down. Ran out of patience to some extent. Nothing against the company and business per se, as slow growth was known while getting into at the first place.

Why does declining stock price determine selling decision? Did you buy it as a technical pick? If it is to generate value from 3M as a stock, declining prices must be good as we get more to buy at a lower price.

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I am freeing up cash by exiting few stocks like above to continue tail experiments. I am evaluating few mid caps like lal path labs, fairchem, pi ind, varun bev, atul, astral poly etc… Plan is to allocate no more than 3% of portfolio and track for 2 to 3 quarters.

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we want A we get B nd we settle for C … That’s the human nature . When one is committed to the investment one must invest in the companies which offer the safety of capital first and Growth . If repeatedly one is switching the companies one will suffer the capital erosion . Every investor proud to be called value picker but in reality the are the animals of habits and prone to the call of action when we saw the erosion of wealth . 3M is world’s most ethics based company I would suggest to study bit harder about the company simply if stock hasn’t moved as per your expectation YOU can’t dump that and sending the negative wave across the community .Even Page is good candidate as it has come to good valuations . Creating web of FEEL GOOD stocks in Portfolio does not guarantee one a good return .But one must have sound I MEAN SOUND CONVICTION and that should be written and when one is existing before exiting one must read the initial investing rationale . Hopping from stock to stock does not create an alpha but strong disciplined create a fortune .
I had made mistake in the past I had entered Britannia twice but exited very soon .That doesn’t stop it to reach to a good height but definitely it reduce my return and the churning increase the overhead .WE ALL KNOW THIS BUT WE FAIL TO ACT …
I strongly recommend to read the thread repeatedly… like any CHALISA

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Disagree You can have core portfolio and peripheral. With LTCG & STCG, It is also good to balance your loss and profit to be tax smart.

Conviction is not the only issue here. The Rabbit-Hole goes much deeper.

We are protective about our money, which is why we invest in nothing less than Page Industries and 3M; the best of the lot, where we have maximum conviction.

But, there is a fine print in that: The conviction is about the quality of the business, but not its stock price. :slight_smile:

It is proven research that, beyond 30% correction it is an anomaly that a retail investor can hold. Fear kicks in, and no logic is good enough (which loosely defines fear).

However, Fear is important, one mustn’t do away with it, if at all one could. It is the reason we survive. Stock market operates on the boundaries of fear. Where the majority of market participants will be shaken-out, or dragged in (FOMO). The “powers that may be” have that much liquidity and organizational set-ups that they can play in and out of these boundaries (market swings).

Therefore, I think one should do all he can to set himself apart from the crowd. And arrange his limits further, have wider fear-boundaries.

Otherwise, no matter how well prepared, educated, researched or connected you think you are, you probably are not. The market will soon swing enough, and hit your fear threshold, and you will sell your positions or jump right into the eye of the storm (FOMO).

As one of several remedies, one could work-out a comfortable position-size. He could invest only an amount of which if 50% evaporated, one would not hesitate and instantly break the news to the Family.

For ex.
If you Invest Rs.100 in Gold, then only Rs.30 in Silver.
If Rs.100 in invested in Large Caps, invest only Rs.20 in small caps.

This is a crucial realization. Otherwise, one remains agitated. He tends to want to follow every piece of news, and know the reason behind every fluctuation.

Investments should be a tool to increase ones prosperity and happiness, and we end up ruining both.

PS: Pardon my chattiness in the early morning. Pls flag the post if it is redundant to the thread.

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In my opinion , an investor is someone who understands the business along with the risks. He then buys the company and hold it patiently without caring for the stock price. In fact , if his understanding of the company is good , he may want to accumulate the stocks at lower levels and any fall from original Purchase price should not affect him. Also seen many investor who accumulate in tranches or SIP mode and keep averaging their cost both on upward or downward levels. Rest all who are shaken by daily stock price movements are traders in disguise of investors.

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Exited Indusind Bank at No Loss -No Gain.

Entered Tracking positions in 4 large caps & 6 mid caps.

Large Caps…
Bata
Berger
Marico
Kotak

Mid Caps…
Vinati Organics
Astrazeneca Phar
Atul
Varun Beverages
P I Inds.
Astral Poly

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A good litmus test could be the number of unique stock transactions in a year. If we keep transacting with more than 3 or 4 new stocks a year, we may be an active trader wearing an investor clothing. The most successful investors in my community have never shortlisted more than 2 stocks in a year. They take several months to even enter a new company.

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Don’t you think Varun Beverages has some short term uncertainty regarding ban on one time use of plastic? I read that they do have factories setup for recycling used bottles. Despite this, i am still unclear on how this will playout until govt comes out clearly stating what falls under one time plastic. And such factories also will eat up into the revenues/ profits if they need to scale up as the regulations will become much more stricter.

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I only partially agree.

2-3 stocks in my portfolio went as low as 60%. But I didnot panic or sell out of fear. I held for 11 months peacefully. Reason my portfolio overall was max down I guess 6%, so why panic.

The selling is primarily due to reallocation to new set of tail stocks and tracking. Infact, the biggest regret is that I should have applied 20 or 30% TSL on each stock in Google sheets with automatic price updates. That would have saved me some more cash to redeploy.

Its my laziness, that I don’t use TSL. Otherwise I personally believe TSL is a wonderful tool which let’s winner run long and cuts losers short.

Whether TSL has relevance in value investing is a strategic debate, but for retail investors its like helmet, seat belt.

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Is this then a sort of a mixed momentum/growth strategy than a long term stock strategy? where you identify some 30 good quality stocks, keep tracking the growth of the company, accumulate while the company grows and meanwhile for stocks whose price go nowhere (letting Market to adjust pricing) over 1 year, exit them and identify other candidates? Is that a good summary of your strategy?

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The mineral water bottles and plastic bottles for beverages if classified under single use plastic can only be served into cardboard packaging like what is used for Tropicana Juice. In that case they will be less impacted as they already have the backward integration to produce that kind of packages. However, they will have to write off or scale down their plastic packaging division and scale up the cardboard packaging division. So, some impact will certainly be there. I hope Govt will give the companies enough time to comply.

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I tried to back test TSL on my portfolio (Not updated though). I made 2 scenarios after 1 year of creating portfolio.

-Scenario 1: Portfolio left untouched. No buy No Sell
-Scenario 2: Executing TSL @ 20% drop from peak

Interesting to find that in scenario-2
-There would have been many more premature exits (some good ones too). 8 vs 5
-However overall return would have been much better in scenario-2. 9% vs 4%
-Yes, cash position would have been higher in Scenario-2. 42% vs 0%

Hope you all find this interesting & await your feedback !

** Rs 100 invested would be Rs 104 in scenario-1
** Rs 100 invested would be Rs 109 in scenario-2 (Rs 63 equity & Rs 46 cash)

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If you want to deploy a stop loss strategy, try to do it with respect to the index/mutual fund performance instead of a fixed number like 20%. For large caps, go with Nifty 100 Performance * 2 (or any other suitable number), for Midcaps go with HDFC Midcap Fund and so on. You can choose your own benchmarks and margin of risk.

This will not save you from 2008 like carnage, but otherwise should do better.

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Can you explain this little more

The idea is that if the overall market is down 15% and if the stocks we hold are down 20%, then the stop loss should not be triggered. If we need to achieve this, we cannot use a hard 20% figure. We need to base it over the index/market/mutual fund performance. This is assuming that the company fundamentals have not changed. This allows us to keep the good stocks despite price movements which are inline with the overall market movements.

So assuming we base it on HDFC Top 100 MF performance, our stop loss will be triggered only if our stock is down by more than 2 time of the MF performance, so if the MF is down 8 % and our stock is down 16%, it is time to sell. This margin of risk (2 times) can be decided by the individual. This allows us to catch wrong decisions earlier than 20% and retain good decisions longer even if they are down more than 20%.

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How do you implement this. Or it needs to be done manually