Hii all, following is my portfolio, need suggestions for long term investment. Please suggest your opinion and feedback.Thank you in advance.
S.N Stock % of H avg price
1 Laurus labs 17.6 383.33
2 NCC 14.69 67.82
3 CG Power 12.9 71
4 Adani ports 7.5 718.8
5 Olectra 6.94 152.56
6 Ongc 6.9 96.16
7 Venkeys 5.5 1660
8 IFB Ind 3.6 879.74
9 Laxmi organics 3.26 178.5
10 Railtel 3.2 125.57
11 IOC 3.1 114.4
12 HIL 1.9 1692.69
13 Happiest Minds 1.6 542.34
14 Adani Ent 1.4 1023.93
15Sumitomo Chem 1.2 326.7
16CDSl 1.1 494.28
17Aravind Fashn 0.9 147.91
18 RIL 0.9 1932
19 Heranba 0.8 701
20 Vardhman TEX 0.7 1219
21Deepak Nitrite 0.7 1119
22Chola Finance 0.7 543
23 Kellton Tech 0.6 66
24 HDFC Bank 0.6 1369
25 IRCTC 0.6 1376
26 Boro Renew 0.5 296
Hi…your portfolio has some good stocks.However you must be aware of the cyclic nature of energy,power sectors.Most stocks in your portfolio are overvalued and offer less downside protection.There are no pharma stocks.Adding some good value stocks would strengthen your portfolio.
Thank you for your response. If you through, kindly some stock specific suggestions that would be more helpful.
I would take a relook at Adani group companies and Venkys. Both aren’t cleanest of companies.
Thank you for your suggestion.
Hi,
For faster portfolio growth, it will be better to reduce the number of stocks to less than 15 (5-10 is even better).
According to Ray Dalio, stocks are 60% correlated to each other, which means they move up or down together more than half the time. So having more than 15 stocks in the portfolio will not reduce your risk substantially. Instead, it will make tracking a large number of stocks difficult for the retail investor. Hence, the chances of mistakes also increase!
You can see a very good mathematical explanation of this in chapter 4 of the book, “Principles - Life and Work” written by Ray Dalio.
Thank you for your response
Hi, please share if you have any information or article related to misgovernance in Venkeys.
Good chioce of stocks
The portfolio has a good collection of stocks…companies like CG Power, NCC are heavy cyclical and their allocation will increase risk of the portfolio. You can consider increasing allocation to RIL, HDFC Bank and happiest minds.
Olectra …what is the thesis here. EVs? How is it so different from so many other players trying to get into this space?
Thank you for your response
Thank you for your response. Regarding Olectra some of the things I considered for investment are:
1.Electric vehicle theme
2.Central government as well as many state governments are actively encouraging transition to electric vehicles.
3.Many state road transport corporations are including ev buses in their fleet.
4. main disadvantage of ev for individuals is charging infrastructure. Where as public transport system can accommodate many ev buses without any public charging infrastructure.
These are some, out of many reasons which made olectra different from other players.
if you are a DIY investor, i would recommend restricting your folio to 10-12 stocks only as it is not possible to thorough-analyze more than that number.
Thank you for your response. I am also thinking about it. Please suggest your opinion on how to trim the portfolio.
Amongst your portfolio stocks, I am following only one i.e. Borosil renewables. Company is good and future market opportunity is also huge, but for the time being, it’s revenue would not increase much as they are running at close to full capacity and additional capacity will come only in Q2FY23. It will come down from current levels when u can buy more.
Some good stocks here. You could have 25 stocks but if 15 of them are capital goods then you aren’t diversified. So diversification or concentration is not just about number of stocks but about co relation between them. It’s about spreading your risks.Eg* Arvind fashion and IFB are different companies from different sector but they both depend on consumer sentiment.
I personally hold 20-25 stocks in my portfolio and know enough people who do well with a diversified portfolio as well.It all depends on how much time you can allocate to actively tracking these companies. To put it very simply- if any of your Stocks fall by 10-20% you shouldn’t be clueless. Know what you buy and buy what you know.Remove the ones with low conviction. Theres always some stock which seems too good to be missed but it’s ok to skip it if you don’t understand the business. There will be many more
Some of the popular portfolio management thumb rules that you can follow.
- 12-15 stocks
- 9-10 sectors
- 40% LC, 40% MC and 20 % SC
- Max single stock wt 15%
- Max single sector wt 30%
- Top 3 stocks wt < 30%
- No stocks < 5% wt
Apply the thumb rules and then see what the portfolio looks like.
But Blue chip stocks like HDFC Bank and Reliance…he neednot track. And in digital era, tracking a good number of companies, is not that difficult. Its better to avoid company specific risks and also sector specific risks by investing into 25 to 30 stocks atleast. It also depends on the size of the portfolio. If you are investing 100% of your networth in stocks, better to put it into atleast 30 stocks…while if you are heavily invested into real estate , gold, debt products, and equity portion is very small part of your overall networth, then even if you invest in 10-15 or 20 stocks, your overall risk is not much…
But if you choose 9 sectors and then pick 2 stocks per sector, then portfolio will be 18 stocks and if you choose 3 stocks per sector then 27 stocks in portfolio. How it can become 15 stocks portfolio with 9 sectors? Also if in each 9 sectors, if i have to choose 1 from large cap, 1 from midcap and 1 from small cap…then also portfolio becomes 27 stocks…