Reviving an old journey post retirement

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Greetings to all board members. I have been following the forum for many years but am posting for the first time. I am a writer with around 25 years of experience in many media organisations. Past year, I decided to quit my job and start my journey as an investor.
I am a typical retail investor who has been making small, small buys in the market for many years. One of my earliest investments was in HDFC Bank through IPO (was a student then). But I stopped the investment journey during my working days.
During the COVID lockdown, I restarted my journey in the stock markets and built a small portfolio through stocks and mutual funds.
Till a year ago, my investment philosophy was simple: invest primarily in Nifty 50 companies and forget. With some investments I got lucky and with some I didn’t. The returns have more or less been in line with the index.
Now I wish to invest more and create wealth for myself and my children. I am ready even to take some risks. My goal is to manage a 7-figure portfolio by the end of FY 26. For this, I am trying to liquidate some of my investments in real estate and invest the proceeds in a staggered manner.
My questions for the honorable and wise members of the forum are these:

  1. How can I learn to evaluate a company and its balance sheet?
  2. How can I make informed decisions on when to invest in a company and when to get out? I have had a problem with this strategy as I have made decisions based on instinct so far and exited some real good investments at the wrong time and held on to some laggards like HDFC Life for many years.
  3. Will it be a good idea to pursue an online course on investing, and if yes, what would be the options.
    Will be grateful for advice.
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To give an idea of my strategy so far, I am mentioning my core portfolio for your advice and evaluation

ITC: average price 180, holding since 2020
ICICI Bank: average price 700, holding since 2021-22
RIL, average price 2100, holding since 2021-22
L&T, average price 2200, holding since 2021-22
SBI, average price 543, holding since 2021-22
IDFC First Bank, avg 55, since 21-22
TCS, avg 3400, since 2023
Zomato, avg 55, since 2022
United Spirits, average price 670, since 2021-22
HDFC Life, average price, 590, since 2021
Sun Pharma, average price 675, since 2021
M&M, average 1230, since 2022
Tata Consumer Products, avg 522, since 2021
Tata Power, avg 217, since 2022
Titan, avg 2340, since 2021-22
Tata Motors DVR, avg 332, since 2022.
Action Construction, avg 500, since 2022-23.
HDFC Bank, average 1550, since 2022-23
Va Tech Wabag, average 350, since 2022
Poonawalla Fin, avg 305, since 2022.
HCL Tech, Average 1070, since 2021.

I am thinking of paring this down to 15 stocks but am unable to decide what to sell. I am aware of the bias towards Banks and Financials but I believe they are the best stocks to participate in the growth story. Also, I am waiting for one cycle of an upmove in this sector since it has underperformed in the recent past.

Apart from the core portfolio, I am also building a second portfolio that comprises mostly small and midcap stocks. It is work in progress with lots of tracking positions which I would like to trim this year. I will post the second portfolio soon for your advice and evaluation.
Thank you very much and look forward to advice and evaluation.

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Welcome back! I would like to supply with my humble opinion on the above.

Your current PF looks ok… for long term and try to cover sector wise, I mean buy good, valued stocks which are fundamentally strong and if you apply this filter, you may be able to trim some of the above.

Coming to your questions.

  1. How can I learn to evaluate a company and its balance sheet?

If you have a finance background, you may use screener and try to get insights. If you are not, then you may try to learn yourself by using YT videos which are plenty. If you are taking active investing as full-time career initial years should be spent on learning which is continuous process. Watch Global and Domestic economy news - Money Control subscription is enough to start with.

  1. How can I make informed decisions on when to invest in a company and when to get out? I have had a problem with this strategy as I have made decisions based on instinct so far and exited some real good investments at the wrong time and held on to some laggards like HDFC Life for many years.

This skill can only be achieved by close observation and learning only… Even experts may make mistakes.

  1. Will it be a good idea to pursue an online course on investing, and if yes, what would be the options.

NO need to invest in paid courses. attend courses which are free and well known

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Don’t expect miracle soon Fin sector.

Till the underline fundamentals are deteriorate, dont sell, only for the satisfaction of the less number.

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Thank you very much for your advice. I understand the basics of finance because of my interest in reading. I will look for YT resources on fundamental analysis.

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Thank you. You are right about the Fin sector. Not expecting miracles till inflation is not controlled and rates don’t come down (looks unlikely till end of this year).
Yes, I would like to trim the number of stocks in the portfolio but, as you said, won’t do it till there is a compelling reason to sell.
My patience with HDFC Life is running out, though. :slightly_smiling_face:

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Sir which are resource u used to read about Finance sector. Pls suggest name.

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I read all the financial papers and websites, especially Moneycontrol, and follow discussions on this forum. I have plenty of time as I don’t work any more and use this spare time for reading whatever I can, including news and brokerage reports etc.

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Not sure about % holding of these stocks. You have a good portfolio picked up at reasonable valuations. You will do pretty good even if you don’t do anything.

You can tweak here and there to get sector balance if you find that missing else just sleep over it unless a company valuation goes thru roof and you want to sell or biz fundamentals have deteriorated and needs exit.

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Thank you…ITC and ICICI Bank are around 10 percent of the PF at CMP. Rest are 5 to 6 percent. Zomato was just a tracking position but it is now almost 4x. Tata Motors, Tata Power and TCS are among the smallest holdings.
I intend to pass this portfolio on to my children and won’t do much tweaking till it is absolutely necessary. Your advice is beneficial since it suggests my thinking is right.
But, this portfolio is just around 40 percent of my intended investment in the market. I plan to invest at least 1.5 times more.
The real challenge now is to build a fresh portfolio with some aggressive bets. I have built some tracking positions and intend to have around 15 mid and small cap stocks in it by the end of this year. I will post it once it takes shape. This forum helps me get valuable insights into businesses that I have identified.
Grateful for your feedback.

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Your PF should be like a typical cricket team, where few stocks should be big hitters ( small caps), few all rounders (compounding stocks) and few defensive stocks (large caps). Looking at your current PF, you already have good mix of defensive and all rounders. Also few of your stocks like Zomato and Poonawala Fincorp can be the big hitters. You may need to add few more small caps first by using screener to filter and then using this valued forum to read qualitative information about those companies before buying them.

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You are absolutely right and the cricket analogy is perfect. I am actually trying to build another pf with just big hitters :slightly_smiling_face:. I actually had some great stocks but sold them to repay a loan and become debt free. Don’t know if it was the right decision because some of those stocks are now 5x. (persistent systems, bse, elecon engineering, abb and BEL to name a few). But no point regretting; need to start again.

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Portfolio management is very subjective though I express my few thoughts,
Your first question is How can I learn to evaluate a company and its balance sheet?

“First try to screen fundamentally strong companies, and then check their Sales growth since inception, and try to corelate last 10 years growth median, secondly check gross profit margin, then operating profit margin, should be good and most importantly always do management analysis for companies in which you are investing for long term, as management plays very crucial role, then look their borrowings, check receiving’s compared to sales, and perform this and compare with peers and industry, it will give you clear idea”

Your second questions is 1. How can I make informed decisions on when to invest in a company and when to get out? I have had a problem with this strategy as I have made decisions based on instinct so far and exited some real good investments at the wrong time and held on to some laggards like HDFC Life for many years.
answer is to invest in a company if you are looking the fundamentals, check sales is improving and margin are constant, and to exit when “Terminal value is 0”, in finance terminal value tells growth will stop from here, e.g. Nestle, this is just an example, don’t treat else, Nestle’s main product is cerelac and in India Nestle’s market share is above 80%, now this product caps with birth rate in India, it will not grow more than that so this birth rate say 6% to 7% is the terminal value, then you should exit such stocks, and find stock which will grow at least with nifty say average 12% to 13%

Third Question is Will it be a good idea to pursue an online course on investing, and if yes, what would be the options.

“Online course is not recommended, if you are planning to invest more than 5 Lakhs it’s better to higher a professional, who will charge 2% to 3% of total capital, as he is 27*7 in this field and informed with latest happenings, I think you may lag to latest happenings”

This is my personal opnion

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To your above portfolio, if you rebalance a bit, it could generate handsome returns.

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Thank you for your suggestion and advice. I am trying to trim it down to 15 shares over the next few weeks. Closely watching the Middle East conflict to take fresh decisions.

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Welcome, Also keep an eye on Assembly Elections, and after election Budget, importantly how Govt. allocates funds Sectorwise, and USA elections at the end of this year, accordingly if you rebalance it can generate additional alpha to your portfolio

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Take it light, slow, patience is rewarded, fomo is not worth the fear, you might miss 100 good opportunities but 1-2 are sufficient if you can get right. Getting to these 1-2 might take some yrs, dont think think you will get them as soon as you enter the market.

Having a goal to do 7 fig is great but try for more % wise approach, in the end after some time in market whether 5/10/15 yrs most will realize that 25% is what you should strive for, try to achieve more but 25% is superb score to have you double your money in 3yrs doing that.

**Don’t get aggressive with specific numbers to achieve be in a holistic and flow approach.

Protect your capital, **

have high conviction when you have one,

If conviction goes wrong, question your conviction no one is always right, dont be hell bent on it

Most of the times think that market is right and you are wrong.

Lastly, there might / definitely be people who have done opposite of everything written above :sweat_smile: and have been really successful doing so. Everyone in the end develops a approach of their own mostly.These are mainly things I have learnt either from my mistakes or time spent in the markets.

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Thank you for your response. My goal is 20% CAGR. With 25, i will be very happy.

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First of all I would say don’t quit from job for now. Market was very kind in last 3 years and just read about time 2001-2003, 2007-2009, 2011-2013, 2018-2020 such long period frustrate. Other thing is salary always give cushion and you will have money every month to invest. (This is what i follow). Try to earn as high as you can. What I understood is you are long term investor along with job you will get ample time for investment. (52 weekends, public holidays ~= 130-140 days in a year)

For balance sheet I would suggest below in the order

  1. Five rules of successful investing , Pat dorsey
  2. Its earning that count , Hewitt heiserman
  3. Financial shenanigans , Howard M.

Again I would say if possible dont quit wait for sometime till your pf cross 1 cr mark

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Thank you for your advice and suggestions, I will read the books you suggested. My goal was to work for 25 years and become financially independent, which, hopefully I have achieved. Now I want to become wealthy through prudent investing and compounding.
I would have liked to work more but the opportunities after a certain level are limited, and, unfortunately, I have lost interest in my line of work. I intend to learn new skills and start afresh.

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