For a long time, I’ve been itching to start investing in stocks. Covid gave me the perfect time and opportunity to read about the basics of markets and start investing. It’s been a rollercoaster of experiences.
By sheer chance, I hit it big with a couple of stocks. Eg:- Polycab and Astral were my first-ever picks.
Lost a good bit of money in stocks where my research was incomplete or I was ignorant of cycles and other intricate market details.
In the first couple of years, I consumed a lot of content on social media, youtube for stock tips and made a few serious errors.
Over the last few months, I have started building a framework and was trying to make more educated decisions.
I’ll discuss the rationale of my investments in this thread. I already have 20 stock portfolio, I will keep updating the thread.
-
PSP projects(Avg price - 588, Allocation - 5%)
Thesis:-
The balance sheet is clean and the track record is superior. Infrastructure push in the economy by the government. Have an outstanding order book of ~5300 crores as of Q1FY24.
Anti Thesis:-
Historically not a great industry to enjoy great returns.
Selling criteria:-
Order book slows down, Continuous bad quarters, Macro factors.
-
Globus Spirits(Avg price - 1098, Allocation - 7.5%)
Thesis:-
The company is trying to scale up its consumer business, which will have higher realizations. They are doing aggressive capex and trying to enter new markets.
Anti Thesis:-
Government regulations. Competition when entered into new markets, will take some time to break even. High dependency on Coal, Rice, and Power costs.
Selling criteria:-
I entered the business during over earning phase. I did all the mistakes one can do in investing. (Incomplete research, accumulating during break downs, not understanding about over earning phase).
I see the business showing good growth over the next few years. I will get out of the stock if fundamentals deteriorate or I get a chance to book profits or find better opportunities.
-
VBL (Avg price - 631.13, Allocation - 6.5%)
Thesis:-
Electricity and refrigeration penetration in India is to increase in the next decade. Due to the hot summers ahead, we can expect more cold beverage consumption. Expansion into new geographies outside India. Improving product mix(Kurkure Puffcorn co-packing, dairy, energy drinks).
Anti Thesis:-
New products and focus areas not working out. Margin compression due to competitors. Corporate Governance issues. Water supply procuring issues.
Selling criteria:-
A visible slowdown in business growth due to a huge base. I feel this would be a good compounder stock for this generation of investors. I plan to hold on as long as the thesis is intact, as I don’t want to be on a constant lookout for every stock in my portfolio.
3 Likes
| Actions |
Learnings |
| As soon as the market fell by ~10% and signaled a bear market, I shifted funds from low-conviction ideas to high-growth stocks and those showing relative strength. However, many of these were later corrected. |
In Stage-4 markets, relative strength (RS) doesn’t work. When a clear downtrend starts, it’s better to book losses in momentum or low-conviction stocks and wait for bottom formation and trend reversals before redeploying capital. |
| I didn’t fully grasp why experienced investors suggest allocating funds into debt, gold, or low-risk assets. |
Diversifying according to one’s risk appetite is crucial. Downturns in any asset class can be prolonged. Having a diversified digital investment portfolio enables flexibility to move funds when clear opportunities arise. |
| I analyzed stocks, determined allocation sizes, and built positions quickly. Despite intending not to average down in a downturn, I did and suffered losses. |
Instead of aggressively building positions, start with a small allocation (0.1% - 2%), track the stock, and reassess. If fundamental or technical triggers validate the thesis, average up rather than down. As a retail investor irrespective of how much you research and build a conviction. There will be a lot of gaps in the research. Market price and volume action validate an investor’s thesis better than personal conviction alone. |
| Held onto positions even after the thesis played out, hoping to maximize returns. Examples: In Senco, my re-rating thesis played out, but I hesitated to sell, comparing it with Kalyan’s multiples and waiting for round figures. In Tejas, I aimed for a perfect exit to capture maximum upside, which was unrealistic. |
Trim positions actively once the thesis starts playing out. When limited upside remains or unknown factors dominate, reducing exposure is the prudent move. |
| Held defensive, reasonably valued stocks like Indigo and Narayana Hrudayalaya but trimmed them in the later bull market phase to chase momentum. |
Defensive stocks reduce portfolio volatility and churn. While they don’t provide quick gains or show huge upside in valuation models, they offer downside protection and can serve as a funding source during downturns when better opportunities arise. |
| Maintained an equal-weighted portfolio, typically with 20 stocks and allocations between 3-8%. |
Learning: A structured portfolio with clear categories helps manage risk and returns better. Core Portfolio (60-70%) – Long-term holdings with strong fundamentals . Medium/Short-term Triggers (20-25%) – Stocks with specific catalysts or undervaluation. Momentum/Tracking (10-15%) – Opportunistic trades, experimental positions. Clearly defining what belongs in each bucket ensures a balanced strategy. |
|
|
|
|
|
|
|
|
|
|
Update on previous positions:-
Globus Spirits – SOLD
Made peace with the market and exited the position at a loss.
PSP Projects – SOLD
The company kept missing its guidance due to external reasons, so I sold it during a short-term correction and moved to better opportunities at that time.
VBL – SOLD
This has been a big winner for me. I gradually sold the stock when the PE started looking obscene, crossing 80.
I want to revive this thread and use it as a journal to document my investing thoughts and ideas. Going forward, I wish to update it monthly.
1 Like
