Portfolio of a novice investor

Q&A: Questions & Answers Portfolio Q&A
1

Hi fellow community members,

I would like to share my investing journey here and seek guidance and inputs by fellow members of this wonderful community to do better in future. Though I started my journey around 10 years ago, I must say that I haven’t been focused at all when it comes to maintaining discipline in my investing journey so far. Last investment I did in year 2020 when market was at all-time low.

Having said this, I have now decided to give it more focus and dedication. My plan is to create a corpus of 10-15 Crores in 15 years’ time.

There are a couple of things which I normally consider when it comes to investing in stocks:

  1. I try to find companies on screener.in which are relatively cheaper in valuation. Based on the knowledge I have acquired so far by reading books, browsing the forum here on valuepickr and materials available in public domain, I have created 5-6 screeners. These screeners give me ideas about the possible stocks. After that, I normally put them on watchlist and try to do as much research as possible.

  2. Once I zero in the stocks, I buy and then forget about them :smile: . I have liquidated part of my stocks only once or twice in order to attend some urgent obligations.

  3. For me, most important stock selection criteria is as follows (not exhaustive):
    a. High ROCE in last 5 years
    b. High OPM in last 5 years
    c. High sales growth in last 5 years
    d. High earning yield
    e. Low debt to equity
    f. High Promoter holding
    g. No pledged percentage

Here is the list of the stocks that I own so far:

Stocks Market value exposure % gain XIRR
MAITHAN ALLOYS LIMITED 11.30% 136% 32%
KEC INTERNATIONAL LIMITED. 11.07% 419% 27%
RELIANCE INDUSTRIES LTD. 10.34% 424% 32%
BERGER PAINTS INDIA LTD. 8.74% 880% 31%
ICICI BANK LTD. 8.41% 358% 20%
TATAMOTORS-DVR-A-ORDY 8.14% 394% 67%
ORIENT REFRACTORIES LTD 6.48% 340% 60%
POWER TRADING CORP.OF INDIA LT 6.36% 108% 10%
CONFIDENCE PETROLEUM LTD. 5.68% 353% 62%
CCL PRODUCTS INDIA LTD. 2.79% 1074% 30%
ESSEL PROPACK LTD. 2.52% 94% 13%
WIPRO LTD. 2.46% 104% 8%
TORRENT PHARMACEUTICALS 2.07% 306% 17%
TATA COMMUNICATIONS LTD. 2.02% 380% 20%
MEGHMANI ORGANOCHEM LTD 1.99% 11% 4%
JUBILANT LIFE SCIENCES LIMITED 1.88% 193% 13%
TATA CONSUMER PRODUCTS LIMITED 1.87% 114% 27%
ASHOK LEYLAND LTD. 1.56% 677% 24%
AMARA RAJA BATTERIES LTD. 0.97% 141% 9%
ITC LTD. 0.77% 144% 34%
FIRSTSOURCE SOLUTIONS LIMITED 0.71% 1289% 28%
JAIN IRRIGATION SYSTEM LTD NPP 0.43% -28% -4%
Total 100.00% 371%

At the moment, tracking a few stocks and very soon will take position and will update the above list (mostly it will be addition to above stocks).

I would like to seek views and opinions and constructive feedback of all expert members.

7 Likes
2

In addition to above stocks, I am also investing in following equity mutual funds:

  1. PPFAS flexi cap fund
  2. Quant small cap fund
  3. Quant infrastructure fund
  4. Quant absolute fund
  5. Quant active fund

The monthly investment in stocks is somewhat double of the SIPs going into these MFs.

3

Nice portfolio. One query. How you have calculated XIRR of individual stocks? Currently zerodha provides breakdown where buying date and quantity is provided. So i think, you took that data of individual stocks and then calculated on Excel. If some other technique , pls let me know…

1 Like
4

Most mutual funds are in quant. Isnt it a AMC specific risk? And since quant is using algo model which they keep secret, how you have build conviction to invest in most of their funds?

5

Thanks a lot! Yes, you are right. I imported the portfolio in the Excel and then for each of the stocks, based on 4 inputs - holding amount of investment, date of purchase, current amount of investment and today’s date, calculated XIRR with excel’s inbuilt formula.

1 Like
6

Well, I agree that it could be a risk that majority of my funds are with Quant but frankly speaking, I selected them mainly because of two reasons:

  1. I myself work in the area where we use data science to create predictive models, so I am aware about it’s power and future. I have watched a lot of videos on YT where Quant CEO mentioned about company’s investment strategy, VLRT framework, how it uses macro economic variables etc. for stock selection etc. Further, they call themselves as theme or strategy agnostic which means they are not bound by one single theme such as value investing or growth investing or momentum investing. They are a bit of everything which I really like about them.

  2. Their track record since last 3 years has been phenomenal and that’s the other reason why I selected them.

Let’s see how it goes! :grimacing:

2 Likes
7

Paid Google Sheets available from freefincal, with corporate actions like dividend, split, bonus, rights and buyback, along with purchase and redemption. I am using one. Dividend and bonus are working fine, don’t know about split, rights and buyback. There is a lag in calculation, and the return is not updated in real time.

1 Like
8

You are amazing and a lot of us including me and experts in this group as well need to learn from you.

1 Like
9

Thanks a lot for your kind words. :pray::blush:

10

Going by returns, all your stocks may have been bought at mouth watering prices, i suspect, in 2020-21. But the best thing is that you have kept them.

1 Like
11

Thanks a lot! Yes, I bought quite a few in 2020. Missed the March April in 2020 down time due to lack of funds but then invested quite a lot in July- Sep 2020. However, many of the companies in the portfolio I bought much earlier as well. For example, Berger Paints and First Source solutions I bought in 2014 and 2012 respectively.

1 Like
12

I too planing to invest in quant small cap soon i found its rewarding investors excellently

1 Like
13

Awesome!! Last 3 years in this fund has been spectacular!! Hope next few years are as good as well.

1 Like
14

Great approach and goal plan :+1: Few questions for learning:

  1. what is the valuation approach you are following to buy.

  2. do you have any custom screeners which can be shared.

  3. capital allocation framework for this portfolio - any changes planned for goal. (Sip vs stocks).

1 Like
15

Thanks a lot for the feedback and queries.

  1. Valuation approach - it’s a complicated question :grimacing:. But to summarise, I try to find companies which are extremely attractive from valuation perspective like all other value investors would do. I don’t understand technical strategies so rather I try to concentrate on fundamental analysis. A few things which I definitely consider are as follows:

a. High sales growth in last 3 to 5 years. It’s extremely important. No matter how cheap the company is, if it’s not growing, I would stay away.

b. High OPM growth in last 3 to 5 years. Increase in OPM over last few years without cutting down on the costs means company has pricing power.

c. High ROCE in last 3 to 5 years.

d. Debt to equity less than 0.3.

e. Promoter holding more than 40-50%.

f. Pledged percentage to be 0%.

g. Growth in EPS on consistent basis and must be higher than current long term bond yield.

h. Free cash flow yield to be higher than 5.

i. Growing FCFF.

j. Margin of safety ( self sustained growth rate > sales growth)

k. EV to EBITDA lower than 5 or 7.

  1. All my screens are public. If you search by my name, perhaps you will get the results. Please note that I change all my screens way too often. Also, I don’t rely on any specific screen. You will find a flavour of all above metrics in variety of screens that I created. Basically I run all 5-6 major screens and find out if there are any stocks which appears in all of them.

  2. Besides MF and Stocks, I have 10% in cash and investment in few ETFs, PPF, NPS etc. With regards to stock investment, I follow SIP approach in the selected stock for at least 6 months to year.

Hope it answers the queries. :blush:

2 Likes
16

I used MProfit (https://www.mprofit.in/) to calculate my XIRR. It is easiest and fastest way

1 Like
17

Thanks for sharing this. While Zerodha is very easy to connect with mProfit, brokers like Sharekhan is a nightmare to connect with it. Any views on that?

18

But its not free service above 50 lakhs portfolio. And also it provides only portfolio XIRR, not individual stock XIRR.

1 Like