This forum means a lot to me, although my lack of knowledge in understanding the numbers prevent me from actively participating in discussions.
I would like your comments on my portfolio.
I have positions in Page Industries and Kaveri seeds futures which I keep rolling every month. The position size is 200% of my portfolio value.
I also have 40% of my portfolio value in cash (to accommodate swings in futures position).
18% of the portfolio is primarily designed to be the bedrock of the portfolio (HDFCBANK, INFOSYS, COLPAL and ASIANPAINTS) - Low growth, high stability without much price movements - some dividends.
47% is chasing Tier 2, 3 cites housing dream(REPCOHOME, GRUH, CERA and CANFIN).
The rest 35% is between SYMPHONY, KITEX, GRANULES and PI INDUSTRIES.
Please note - I am not a trader - The only thing that I do like a trader is to rollover my positions in PAGE and Kaveri everymonth.
The reason for opting for the futures is leverage, not is some company - but in a company that I have followed for years. I had real positions in PAGE and KAVERI until recently.
I see your point on opportunity cost in holding cash and sorry for not explaining is properly. Of the 40% in cash around 75% is used as cash margin by the broker - I can use the stock margin but I not sure how it works. I have myself thought about holding so much cash without any real use, may be I will reduce it to around 25%.
I have not done the maths but the cash to futures ratio currently is 1:5. May be I should do some real calculations and understand the benefits, tax outgo and comfort level.
Stressful - valid point, good sleep is what I need, although i have to confess that I am becoming immune to the price swings.
Hi Vishal - Think the question is a bit broad-based. Essentially - I am looking at quantifying some bad happening to PAGE and currently - the safety valve is built to accommodate PAGE dropping 30% after which I have to exit the positions.
You can use your stock as futures core margins and cash only as m2m margins (i have done this ) but consider that in such a case you might lose ltcg benefits on your equity position since it could be termed "stock in trade " which implies business income negating ltcg advantage
Risk i see in your approach is not price destruction leading to make you lose your futures position say in page but what if you see a 1 year sideways in page which can up your cost of carry ?
Thanks Reacher - Are you sure about this? May be I will ask my broker. @Donald@hitesh2710 - would you be kind enough to clarify this point. Please let me know if we have any tax expert on this forum.
Thanks Again - Cost of Carry is Negligible with respect to position size and I don’t have to rollover every month if I buy for example NOV series when my AUG series expires.
I am new to this group but have been investing for a while.
Nice portfolio.
Just a question to you and other members. Why would you put 47% in a single theme. Repco, Gruh, and Canfin, play in a similar space (I agree there are finer differences) and cater to housing. If the theme doesn’t take off as expected, it could lead to volatility in the portfolio. I would instead, pick two of the four you mentioned.
I would then buy another two in other promising themes. Maybe something that has mass market footprint, maybe something related to other Modi themes, and so on.
Fair point - Do you have any stocks in mind. The reason is that I want something stable to support my strategy at the same time not being an index stock(I have already allocated close to 20% on Index stocks). Ideas welcome - I am still learning.
Rolling FnO positions in stocks stocks constituting upto 200% of the value of your portfolio are absolute red flags.
For me personally, my target being long term wealth creation with invested capital safety, I avoid FnO play entirely. Who is to predict if both your rolling FnO companies get into ‘currently unforeseen’ trouble in the future? Both companies have good pedigree, but there is a saying “life is what happens to you when you make other plans”
I have known multiple investors who dabbled in FnO over the years to find out that they delivered brokerage for their broker but hardly ever made money. Also, in several cases, people could not anticipate a sharp algo based move that left them stranded, and they ended selling their good stocks to cover their bad FnO bets.
Regarding the holding stocks you are too heavy on HFC’s. Would recommend looking at other quality emerging midcaps in Pharma and Consumption (Shilpa Medicare, Glenmark / Pokarna, Navin Fluorine, Godrej Consumer etc.)
My two pennies - only because you asked for our frank comments.
Thanks Value_seeker. Much appreciated. I was thinking more on the lines of reducing my current FnO positions on PAGE and Kaveri then add FnO positions with Ajanta, Britannia and Eicher so that the risk is reduced.
I understand that it is still not low risk, but I am willing to take it based on my belief in the companies and the india growth story.
On the HFC - point well taken - don’t want to take fresh positions on new stocks but increase my exposure on the existing stocks in the portfolio.
@OldMonk: I think you already got answers to the themes you can buy. HSIL is also being touted as a good bet now once the construction sector takes off. The Modi Swach Bharat theme will keep them in the line of immediate beneficiaries.
The stock has also corrected by more than 40%. As usual please do your due diligence. I do not have a position in the stock.
