ValuePickr Forum

RK's portfolio review

Dear members,

First of all, thanks for your time.

I am very new to investing, invested for the first time in July 2020 and have moved on substantially from there on.

From a learning stand point

  1. I have red few books on Coffee can investing and Value investing - Two different strategies, and I am yet to define my own strategy. You could also see that reflected in my portfolio is 50% value based and 50% coffee can (Except reliance, I bought it first time in frenzy, don’t want to add)

  2. Have started reading the annual reports, concalls of the businesses I own

  3. Use screener for stock valuation

  4. Track the businesses & benefit from the healthy discussion in value pickr forums

Can I please request you to share your views on my portfolio - please note that the reason for asking to review is to get multiple viewpoints about anything obvious ( 4 eye principle)

In addition please let me know from a learning standpoint if I should start/stop doing anything

Investment objectives

  1. Wealth creation over long time (10+ years 12-15% CAGR)
  2. Generate Corpus for PMS if DIY doesn’t work for me

Company (% of the PF)

ITC - 30%
McDowell - 11%
Tech M - 11%
HDFC Bank - 10%
Pidilite - 8%
Brittania - 8%
ICICI Prudential life - 7%
Infosys - 6%
HUL - 4%
Reliance - 3%
Nestle - 2%

Currently tracking

Amara Raja
Relaxo

Investment Method :

A lumpsum to start
Add to companies where low intrinsic value
Add funds when there is a dip in a good business(High PE)

Timeframe - 10+ years

Risk appetite - Moderate

Holding per asset class ( Excluding the house where I live)

Real estate - 30%
Fixed instruments - 30%
Debt fund - 20%
Equity - 20%

As I said, I am new to financial instruments, hence from hereon I expect equity to go higher up in %

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Hello Rajkumar,

At a high level and speaking generally, your portfolio looks good except the 30% to a single stock (ITC). I would suggest to reduce the allocation a bit and may be move it to other stocks with lower allocation.

Also, feedback would depend on what your investment return objective is, your time frame, risk tolerance, % net worth in equities etc. If you add these details people will be able to provide better feedback.

Happy investing!
Anirban

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Thanks for your time Anirban - important feedback, I have added the details you mentioned.

Hi,

Would love to see your thought process behind selection of each of these stocks.
Overall the portfolio has good stocks, but a bit surprised to see ITC got 30% allocation. Also a bit surprised not to see any pharma, speciality chemical names in your folio, as these sectors are expected to do well in the next few years given the tailwinds. It is interesting to see, you have gone for Infosys and no TCS ? All the best.

You are holding a good set of large cap stocks. As per my limited knowledge, such kind of coffee can portfolio should do well over long term with even equal allocation. One should be cautions when breaking the allocation rule and get overexposed to a particular stock. All the best.

1 Like

In bank sector
I like hdfc and Kotak Mahindra bank
In gas distribution sector (I think should have this )
Please track these
Adani gas
Indraprastha gas Ltd
MahaNagar Gas Ltd

Amber enterprises ( air conditioner) is also a healthy stock as it’s past performance
For playing with small cap
Cupid
Zen tech
Amarraja batteries great you should track because of
electric vehicles
Excel industries

In chemical
Vinati organics ltd
IOLCP

I THINK YOU SHOULD STUDY AND SEE WHAT CAN CHANGE IN YOUR SURROUNDING AFTER SoME YEARS
LIKE IN NOIDA DELHI GAS DISTRIBUTION WITH PIPELINE IS PLAYING ITS ROLE

2 Likes

Excellent portfolio. The current price of ITC is attractive. Hold ITC in coming 5 years it will be full pledged FMCG company.
All the stocks looks like a stable performing stocks
You can add 5%of IDFC first bank as part of risk portfolio… Just my opinion

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My 2 cents:
As everyone above saying high exposure to ITC, but your actual exposure is 30 x 20% =6% of your networth, which is OK.
Similarly try to increase the exposure to other quality stocks too, so that they will have meaningful impact on your networth.

Please go through the portfolio allocation and strategies threads in the forum and decide yourself.

All the very best.

1 Like

Thank you very much for your inputs, highly appreciate it.

Hi Sameer,

Thought process is to buy good companies with reasonable margin of safety. But number of such opportunities are very low.

Hence I want to spend approx 50% of my capital on coffee can portfolio ( High PE, Solid performance, Strong MoAT Example: Pidilite, Brittania, HDFC Bank)

The other 50% on companies with low intrinsic value but with MOAT and potential to grow & clean management

  1. ITC - though the company has its downsides, Fundamentals are strong and has been punished by market for ESG & Capital allocation reasons

  2. McDowell - Strong MoAT, High penetration possible, Business will be back post covid + I like the management ( Anand Kripalu) and their priorities are top notch

  3. Infosys/Tech Mahindra over TCS - I like TCS, but just that I want to buy for a good bargain. TCS ran up a but too much for my liking and would consider once there is an opportunity.

1 Like

Hi All,

I thought I would provide an update on my portfolio. In this time period, I made only slight adjustments to my portfolio

  • Overall did very little churn of the portfolio; Didn’t reduce any Qty from ITC, Tech-M and other stocks, just increased qty elsewhere to get the portfolio allocation better
  • Inflation Hedge: Added gold to my portfolio and some cash allocation went to real estate (Didnt exit equity, but was cautious to add more due to the valuations)
  • Added HDFC Life and exited ICICI as I always wanted to own HDFC life due to superior product distribution, and I could buy due to some dip. Staying in ICICI life would have given me superior returns, but nevermind
  • Added Amararaja as it’s a strong battery company with a forward-looking vision on going Green
  • Added HDFCAMC & Kotakbank due to the conviction on Financialization theme, I expect more inflow into the mutual funds - Lower penetration, Low-interest rates, Better awareness reason behind the conviction
  • Exited reliance as it was from borrowed conviction
Symbol %
GOLDBEES-E 18.41722722
HDFCLIFE 15.92083591
ITC 12.67085412
MCDOWELL-N 8.966106745
HDFCBANK 6.406212359
AMARAJABAT 5.916433462
NESTLEIND 5.703212045
HINDUNILVR 5.518230699
INFY 4.730884699
HDFCAMC 4.366832271
BRITANNIA 3.605600076
PIDILITIND 2.820149203
TECHM 2.216198693
KOTAKBANK 2.064003047
1 Like

Liked your thought process here. It’s difficult to time the exits and more often than not, in not so good companies, I have personally managed to exit just at the wrong time…but that’s a learning curve we must embrace by both hands…and glad you took it in your stride…

For a new investor, you have a solid portfolio with all the right ingredients for compounding…sip in dip and buy in crash picks!

1 Like