Hi Guys i am planning to create a distributed portfolio of the following stocks, could you guys please help me review it. I plan to hold these for next 15-25 years.
- Sudarshan Chemicals
- Aarti Industries
- Eicher Motors
- Karnataka Bank
- Balaji Amines
- Thyro Care
- Heritage Foods
- Federal Bank
- Sharda CropChem
- Ruchira Papers
- Advanced Enzymes
- Mahanagar Gas
- Finolex Cables
- Capital First
- Somany Ceramics
- Berger Paints
- Nilkamal industries
- LT Foods
- UFO Moviez
- Minda Industries
If the horizon is that long, the major portion of the portfolio should be allocated to B2C businesses and little capital should be allocated to conceptual/futuristic view.
I like MHRIL, United Spirits, Force Motors and SPARC with said perspective.
Completely agree with allocation to B2C businesses part …
Yes B2C business is less vulnerable compared to the other business over a longer horizon.
What all scripts can be replaced with Force Motors, SPARC ( i like these two seeing their numbers) even Igarshi Motors as well.
I am planning to buy in small amounts for next 2-3 years and build the portfolio for retirement. I know that one can’t predict the future, which ones can be removed and replaced by the B2C stocks, how are LTFoods, WhiteOrganics etc.
YOu seem to have too many stocks in same sector. Ideally you should choose 1-2 best in the sector. Also, diversification in terms of sector would help.
You have to outline few things first. Even if one has a horizon for 10-15 years there are very few companies that will be good investments for that long a period. So you got to differentiate companies on basis of the following
2: potential market opportunity
3: current market cap
After doing this you also have to check what weightage are you planning to give to individual companies. Ideally the more confident we are for the future prospects of a company the higher our weightage for that particular company.
In my opinion, if you are looking for a time horizon of 15-20 years there are a few points which deserve utmost attention in selecting the businesses to invest
- B2C Business - Generally B2C businesses can scale up and that is what you need for the business to grow over 15 to 20 years… You can try and look at B2B businesses where in you are pretty sure that there will be this “scaling” up in the next decade or two … In terms of capital allocation - 70% on B2C and 30% on B2B might make sense …
- Honest and competent management - No business will go through 15-20 year span where it doesnt face problems … The problems will come in various forms and to solve them you will need to have a honest and competent management…
- Buying price - Since the horizon is long, I would suggest to wait for decent correction in markets before buying… Generally there are decent corrections every 9-12 months and that would be the time to park your money in … Buying at current market prices might set you back if markets correct and chances of that happening are pretty decent since most stocks are trading at a premium …
4)Diversification - Going behind too many stocks might not help …Rather than putting money in 25-30 stocks, i would suggest to focus on 5-10 stocks first (the ones which are established names like Eicher motors, etc) … If you have regular cash flows in the form of salary, business income, etc, you can keep adding other stocks or add more of the established names itself … It will give you the time to develop the conviction on the “not so” established names … You can take a tracking position in the “not so” established names to begin with if you think that helps in tracking and developing the conviction …
Disc: Views are personal. Please do your own due diligence …