Boy what a portfolio! You dont need any suggestions frankly speaking.
I mean, ppl for sake of advising can say why don’t you increase pharma weight-age or reduce banks weightage, but imho no change is required.
Every company seems top-notch and shows your depth of understanding in quality investing.
Think abt allocation 5-10% of portfolio in high growtth, risky and small kind of company but at the same time with a lot of research and conviction - you shld be ready to loose 25-30% but in such allocation - such stocks i mean cannot be evaluated by conventional wisdom but more of a futuristic kind of bet where risks are high but growth returns could be huge - it may provide a portflio that alpha - eg - delta corp, tv today, united spirits, shilpa medicare, capital first etc
Havells is a pedigree stock and demands a better allocation to any portfolio
Huge scalability - large market size in coming years (company can quickly grow in size with little capex involved incrementally - tech companies are best examples)
First mover advantage if possible
Unique or niche product offering with patents or limited players - oligopoly wld be best bet in some cases, understanding of the market
Max money is made where value migration is happening - for eg - from unorganized to organized, from obscure tech to new one, creation of all together new content category like hair care/gain, gaming, etc which are hardly there right now
Company shld be in early stages of its life cycle - the better it is if capex plans are behind or abt to finish
Hi,
Please elaborate on the statement. I have been looking into the electricals sector, while its ultra competitive, the shift towards asset light structure by big players and a massive opportunity sizes are positives.
Please share your insider insights and take on the sector.
lighting was going through a phase change between 2008 till early 2015…
CFL is almost replaced by LED and indian lighting producers have to change from manufacturer to assembler/trader . new product and product life changes rapidly and more like a mobile handset, where you design a product with its end pre-decided. indian lighting manufacturers have never worked this way before.
now LED products introduction/exit are getting stabilized and its specs are decided/upgraded and over coming years organised players will have edge and small/tiny importers/assemblers shall vanish .
On Havells - To best of my knowledge almost 60-65% revenue is actually from switchgears and cables - both HT and LT cables. And therefore the business is closely linked to construction cycle.
The diversification into brown goods (electricals) is risky given the number of new players who’ve entered (e.g. polycab, orient etc.) and potentially a drag unless someone has ability to create a product differentiation with own manufacturing or design capability.
overall its being satisfactory. investments like life is fascinating journey. Learning is on.
Further to your question on how portfolio has evolved, its has done what was expected, without considering yes bank into account. And with it, its little below expectation, but justifies all the efforts put in.
Now more of a value investor with much more focus on risk than before. The Most Important Thing by Howard Marks rules my thoughts more.
