ValuePickr Forum

Ratul Portfolio - Need Review and Guidance for Newbie investor

Hi everyone,

I am 29 yrs old, and took up investing in direct equity just about 6 months back - so yes, truly a newbie here. And I think I am really lucky that I found out this portal so early on my investing journey - it might just change the whole outcome for the better. I would sincerely request all the members here to help me build a portfolio that can give me 15-20% CAGR for the foreseeable future. I’m open to receive really critical feedback - so if you feel my current folio is nothing is junk, please dont hold back from saying so.

But before I share the portfolio, let me give you some context, maybe some of you may find it relevant while offering suggestions.

I have a day job in the pharma sector since last 5 yrs; however, I have been able to save money since last 3 yrs only. My total corpus at this moment is reasonably small. Below is a rough allocation of my total net worth:

  • 20% in instruments like EPF, PPF, NPS
  • 30% in cash ( I segregate them in different liquid funds, each linked to a separate goal). I have some surplus here which I can invest
  • 25% is in Equity MF right now, which I intend to shift to direct equity once I have the confidence
  • 25% in direct equity

So here is my current portfolio (image attached). I’m also mentioning the reasons of the buy, if that helps.

Planning to Buy: ITC, Info Edge, 3M, LTTS/Tata Elsxi (one of these two). Any guidance on these would also be helpful.

Thanks in advance,
Ratul

At this point, this is becoming repetitive. But people who are investing in CRISIL, please look at their Annual Reports once. They provide a clear break up of the sources of Revenue and what each segments business does.

image

For instance, in 2018 only 29% of Revenues came from Ratings. 63% came from Research (Mostly GRA and Coalition, I presume). In fact getting into the details, CRISIL has 7 major departments:

  1. Ratings
  2. Global Research & Analytics
  3. Coalition
  4. CRISIL Foundation (CSR Wing)
  5. Risk Solutions
  6. Infrastructure Advisory
  7. Global Analytical Center (Support for S&P)

It is effectively a conglomerate. So while researching, you will actually have to do competitive analysis with several different companies (Ex: EClercx is in direct competition with Global Research & Analytics).

My 2 cents…

I won’t personally go with 2 ratings agency - personally would move out from one at least.

Since you are from pharma background so it’s great that you have good chunk in your circle of competence. I would though have one or two contract manufacturing focused pharma instead of traditional ones.

Bank wise - Yes bank still a iffy for me. The growth take a while to come back IMO. Not recommending…for me a IDFC first in this current situation is better than a Yes Bank given there is a clear pathway ahead & headed by a top quality Chairman. Disc- I have a very small amount in IDFC first & tracking…

Personally I am not keen on IT stocks facing US. Any market downturns there would cause spending cuts in BFSI sector. I would rather wait for such a situation to happen in next couple of years & dip into the IT stocks when valuations could be bit lower. Large cap IT is fully priced & lot of downside left IMO. Instead would rather park the money in a decent FMCG companies or select Capital goods companies…

Thanks a lot of both of you, Dinesh and Arun!

@dineshssairam your point about CRISIL is well taken and I have been trying to understand more about their other businesses to get a better picture. Will take a call soon. I was there’s a thread on crisil in VA…will probably post my questions/comments there.
I have decided to stick to care ratings for next 2-3 yrs at least. Planning to add and increase allocation.

@aruncph - thanks for your advice. Exited Yes bank during the recent run up at 72. Added ITC and plan to continue adding monthly during small dips. Regarding TCS, I agree that there’s a chance of downside. Still IMO if India’s slowdown continues, export driven stands to gain a lot. And if the price does correct to a decent valuation in the next cycle (whenever it be), will add more to average it.