ValuePickr Forum

Raghav's Portfolio: Requesting feedback

Hi there, below are the few stocks I have invested in for medium to long term. I come from engineering background and have limited knowledge about economics- per se investing. I have been following many threads of esteemed VP members and reading books on equity investment as suggested in forums and from what I could learn & process in past 1 year, I have selected below mentioned stocks. My expectations from my current portfolio is less than 10%, actual returns are -9.2% till date, however, I wish to achieve annualised return of 15-20 percent from 2020 onwards. Before you ask why from 2020? I feel that it will take at least 3-4 years of rigorous efforts for someone like me to understand all the nuances and come up with a half decent process of stock selection. Also, the list follows descending order of my conviction and portfolio allocation in individual stocks.

Sl. No Stock Name % of PF
1 HUL 8
2 Gruh Finance 8
3 L&T Finance Holding 8
4 CDSL(IPO) 6
5 Ashok Leyland 6
6 Chaman lal Shetia Exports 6
7 HDFC Life 6
8 Menon Bearing 5
9 Rain Industries 5
10 NGL Fine Chem 5
11 Avanti Feeds 5
12 Suprajit Engineering 5
13 Divi’s Laboratory 4
14 Bajaj Auto 4
15 L&T Technology Services 4
16 Sterlite Technologies 4
17 Maithan Alloys 2
18 Alphageo(India) 2
19 Vaibhav Global 2
20 Piramal Enterprises <1
21 Nocil <1
22 Cash 5%

I have tried my best to filter out the noise, but after looking at above, I can see some popular choices have crept in my portfolio. It may not be a bad thing but I am trying to find companies with above average ROE and a good runway for growth that have less to no MF/Analyst coverage. For valuations, I try to do basic DCF and relative/industry valuations but usually I don’t adhere to my valuations and end up using investing websites data. Hence, in current volatile market I am making my purchases in SIP mode. Till earlier this month, I was sitting on almost 40% cash but decided to deploy the same as I don’t think market can be timed but only the individual stocks to an extent. I know it’s important to learn doing valuation properly and I am working on it. Meanwhile, I request you all to present your views on my current portfolio and suggest the improvement/changes I can bring.

PS: Please ignore anything that you find juvenile and remember I am novice.
Thank you!

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I have few stocks in common. But yours is midcap oriented. Mine is large cap heavy. I am curious to know why you bought LTTS. Pls share your rationale and outlook say for next 5years. Thanks

Also you can mention buy price if you are comfortable.

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If aiming 15-120% growth per annum ,would avoid HUL,CDSL,Avanti,HDFC Life if I was at your place. Reasons are as following:
HUL: Has already seen a long bull run in last few years , should consolidate for few years now
CDSL :A great business, good company but would be a slow compounder
Avanti : Think good old days are over
HDFC Life : Same argument as CDSL

Under-penetrated insurance is the theme since last one decade. Don’t think it is going to turn around overnight. If still someone wants to be in insurance, feel ABCL and Edelweiss can better bets as they’ve other businesses also to balance it all . Although wont suggest a buy for ABCL >100 & Edel > 150.

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I wonder if only I feel arrogance in @dumboinvestor tone or is it other folks view as well?
Sorry buddy, but I have been reading your comments in Page industries thread and elsewhere.
Request to write with humility.Only when you give respect, will get same in return.

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Just wanted to know your thoughts on LTTS since you have worked with them. Read their annual report ,lot of advanced stuff like autonomous vehicles, robotics etc. Are they like other software companies or do they really do cutting edge work, I got a feedback although they profess to do high tech work, in reality it is not so. Checked the margins, less than TCS, receivable days also not less.
If the work was high tech, should be reflected somewhere. The same thing was being said about Persistent systems also, results are not much to be seen.

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I don’t think most of your ideas will be losses, as much as one is practical and can afford risk, you should not say these words yourself. You have an idea, you have a thesis, you are learning, you are tracking, so don’t say that.

I have invested without knowing anything and I saw both profits and losses, I was ignorant, you are not.

Your portfolio is quite defensive I have some common stock but weightage is more like Nocil, Ahosk leyland etc. If you are looking for 15 to 20% return then It’s better to have mutual funds. As you already mentions you can take some risk then please focus on the sector which growing fastest in indian market. If i am at your place i will have only 10 stocks which has better growth in future and they are market leaders.

Every Bull market has different leader and once this bear market will end new leader will come with different sector.
Like: Pharma and Auto Rally in 2015 and in 2017-2018 they are under performer.

I believe the sector like Insurance,Retails,Chemical, AMC some selected Infra and Auto,selected NBFC will grow very fast in coming years which has very wide visibility. These are the new trends growing very fast in Indian economic.

Now a days every person looking for 1 term plan for insurance, 1 mutual fund for saving, One personal loan from NBFC and some Retails shopping mall. These are the coming trends in the market where visibility is very high. Like in US market Walmart has started with 38 retails store and currently it’s has 4755 stores.

Choose the leader of every sector which has very good fundamental with great promoter, If you want to get financial freedom then the stock picking is very important for next bull run.

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If you are expecting Dmart to come at 40PE then other stock will go below 10PE. The quality name will never be at cheap valuation.

If you are going to hold for 5 to 7 years then 10 to 20% down and up doesn’t matter. This bear market has painted all stock with same brush but this is not going so sustain for long time. Bajaj finance has shown the life time high profit in this quarter and promoter has update this profit will sustain for 2 to 3 years. Once bull market will start quality and good earning stock will bounce back very sharply and people will forget about this down fall.

Be with leader and be will quality. Happy investing.

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You have a good mix of stocks, and we are all hoping that you have done a great deal of homework on the small and mid cap names that you have in there, which might have erratic earnings and revenue projections. Stocks like HUL and LnT do not dissappoint since they warn Dalal Street, and then of course, there are always buyers on the other side, and hence the beta on your portfolio stays at a pretty good level.

As soon as you venture outside of the blue chips, the oscillation is deeper and higher, and hence the portfolio suffers great times when small and mid caps are going up, but it also takes the hit when going down.

So, it is upto you in terms of your risk profile, but I would definitely add to the mix IT, Pharma, Auto, Ancillaries, and some Chemicals that are in the solid mid-cap category while they are down. And, while you do add them, give the SIP approach a try and create a gap of months when SIPping. Month 1 you buy 2-3 stocks and then Month 2 your buy a different set of 2-3 stocks, and so on. What you find is that if you HUL or Chaman or Maithan or Nocil in month 1, 2, 3, and 4 and call it done, you really do NOT average well for a non-Nifty stock due to the higher SD in those stocks.

KKP

Fantastic moves and good following of other ideas also. Pick the larger ones since the volatility will continue to be high. VIX is hanging out around 19+ even right now, and also election shocks will be felt for a while until Mar-2019. So, SIP into various ideas, creating a balanced asset allocated portfolio, and also having your foot in the top sectors that have a good 1-2-3 year view is the best. Then buy and hold works well, and selling can happening in 2+ years after holding the best and right set of stocks.

KKP

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@simplyraghav can you elaborate bit more on this predetermined betting size. You may share example from your portfolio or otherwise. Thanks!

Is otherwise auto sector cyclical? Can u explain how auto is cyclical? I used to think of it as consumer durables kind and non cyclical…

Any idea on the ecommerce disruption effect on walmart ? How has the rise of amazon and likes shaped up walmart’s journey and strategy?

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In classical theory, Auto is indeed considered cyclical, since it is both a driver, and a beneficiary of economic activity. In bad economic conditions, consumers do not buy vehicles and either cancel, or postpone purchase decisions. In mature western markets where the penetration automobiles has saturated, growth is very tepid and here we can see that auto is indeed cyclical. In India, the penetration of automobiles is not as much and so the growth is still secular albeit a cyclical downturn might mean a slowdown of growth, not absolute numbers. The attached pictures tells a story! The numbers are revenues. The Ford numbers may overlook spin offs, or other corporation actions, but then that is also part of the consequences of cyclicality, right ?

image

image

image

Notice that Ford had a downturn of 34% in sales and its current year revenues are not yet on par with 2005.

Maybe GM or other companies might have a better history, but this example suffices for illustrative purposes.

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Hi,

I just joined this thread. Although the companies selected looks very safe for 2-3 years , my view remains that one must keep defined exits for your long term portfolios also. I am happy to share the Excel Algorithm for interested long term investors which I use for my exits and re-entry also.It has been very accurate almost 80-90% times.

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Is it target based profit booking or trailing stop loss type or valuation driven. Would be interested to know the logic. You may please elaborate the selling strategy. Thanks!

Ford charts and history were precisely the reason why I skipped investing in Auto manufacturers. Ford was once on verge of bankruptcy, if I am not wrong…and this happened even after it had established brands. I may have been little wrong, as rightly pointed out by you, that India being very less penetrated, there is lot of secular left in Auto manufacturers. Will other consumer durables (high value ones like Auto) be also actually cyclicals? Whirlpool having not so good period in US…


This is based on various fundamental and technical parameters keeping in view the volatility of a particular script , its momentum , its price range and change as I believe that Price is God.
Algo1 is least Sensitive ( One can look at this as Major Reversal )
Algo 2 & Algo3 is more Sensitive
Risk% is calculated on Algo3 ( When Algo3 is TRUE , then Risk% will be in Negative% , which measures the Risk by which Algo3 would again turn FALSE )
Actually you need to have a look to this Report once preferably daily/Weekly or when you think of making an exit or profit booking (during heated markets/market tops), or making an entry after a decent price/valuation fall.( During market bottoms )
This report is Excel based and easy to read and understand even by a primary class student.
What I have experienced in my Market Career that we know to put our Money , We have the conviction to hold but when the time/price to sell comes we are not so decisive and lose most of our gains.This report will help you in making Emotionless decision making.You dont have to manage your portfolio actively. You can Just focus on Algo1 for major decision making or you can use Algo2+Algo3 Combo.
You can write to me on charts.technical@gmail for any sort of support related to this.
Happy to discuss more!!

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