Simple Investing

Friends, first of all thanks for mentioning to me that you all really liked what I wrote and would want me to continue writing on my “Simple Investing”. Your messages & comments have instilled confidence in me to continue writing. Many Thanks!

As always - Thanks yet again to Creators of this forum to provide this wonderful place to interact with like minded folks…

I continue with the story of a very “simplistic investment strategy”. This Strategy is all about selecting the most simple & sometimes the most obvious businesses, which almost every day are lost behind the noise all around, and continue believing in them. It is about following “Simple rules” and adhering to them in the best as well as worst of situations.

I would try to share my personal experiences during the last decade of my investment journey where I tried to follow this simplistic approach and grew as an investor. Please note intention is not to preach but to learn as I am still a beginner in this art of investing!

"Sometimes doing the most obvious, as ‘simple’ as it may appear, is the most difficult task"

https://forum.valuepickr.com/t/simple-portfolio/58258?u=investor_no_1

Continuing from where I left…

7 Likes

Although with more than decade first hand experience in market, I consider myself as novice as anyone else and sincerely hope that every reader gets worth his/her time in my posts…

Today I am remembering the story of a stock which once was my largest holding, my first most significant bet in terms of money invested, a stock which I wished to pass on to generations and see it grow in the process. It was the time when I had completed the first read of Peter Lynch’s famous “One Up on Wall Street”. It was the time when I had began investing and had just gone through my “Koutons” debacle and mocked by colleagues at my “Tata Communications” pick…and guess what…this time yet again I ended up picking a company which earned me more amusing responses from my fellow investor colleagues. (None of them are from finance background, we all are from Technology consulting).

The Story of a Right business, Right valuations, Right time…But not so right company…ended up coincidently with the Right Profits

Buy what you see, buy what you use…most first time informed investors and those who read and admire Peter lynch can never forget this quote and I followed it in practice. I used to observe that most of my family members & extended family members - male & females alike, used to have a shiny golden bottle in their dressing…and incidentally, I also used to use the famous non sticky & rightly perfumed “Bajaj Almond Hair Oil”…this is what introduced me to Bajaj Corp during its ensuing IPO. Value conscious as an early prudent investor, I would not dare an HUL but this little company attracted me. The entire concept of gradual shift of consumers from sticky to non sticky hair oil, non sticky Hair oil being the fastest growing sub segment within the already growing total hair oil segment and Bajaj Almond gaining market share every Q with a dominant & staggering almost 65% market share made me believe that this company is something which I had been long waiting for…

The business was indeed right, and stock falling down post IPO made valuations even more attractive. If I am not wrong, it used to trade at 1/3rd the valuation of Dabur and maybe almost 1/5th the valuations of HUL…and I started buying every month…month on month, Q on Q and Y on Y…it became a predominant largest holding. My involvement used to be so much that every store I visited, be it big bazaar or local Kirana…I ensured they always have stock of Bajaj Almond hair oil. I remember talking to one Big Bazaar manager to ensure stable availability when I did not find the stock there once. Apart from being an investor, I used to be a consumer as well…In between, I was posted abroad and was happy to see its availability in US. There must have been numerous amusing conversations with multiple friends whom I introduced to using this oil. I even remember introducing it to my American clients, some of whom by the way love Indian products. Obviously, I chose the right ones to introduce it to and not the ones who would shy away from experimenting. I enjoyed every bit of it…

Then, one fine day came the news that the promoters are selling significant holding and I panicked…They were selling it to a PE…I was such a novice then that it took me 2 days to realize that this is good for the company…luckily those 2 days I held my nerves, talked to some seniors and did not sell. Since then, the stock followed a different trajectory and quickly tripled.

I was now even more convinced that this is the stock which would end up as the one I would never ever sell and would see it grow to a multi product FMCG giant, until the day I took a decision in 24 hours for almost complete exit. Unfortunately, the promoters pledged their shares one fine day for need of money. My company was cash rich but still its shares had to be pledged. I had seen the “Kouton’s horror” earlier and that experience made me unknowingly sell this company at its top, giving me a solid 20% to 25% CAGR depending on buy prices over a 5 year period …

Key Learnings of some Simple rules that I should follow going ahead -

  1. If the business is Right, you can still end up making decent money in the Wrong company!
  2. Most money is made in your own convictions…no matter how much amusing they sound to the best of investors and how much they mock you for your way of thinking.
  3. Never forget your past learnings. Never ever repeat a “Koutons” again!
  4. Live your simple company, enjoy it. It would either give you decent returns or solid learning!

As always, views & thoughts invited!

Disc: Not a buy/sell recommendation. Above thoughts are purely personal & for academic purpose. I can be completely wrong in my assessments

22 Likes

Hi, I feel it is appropriate to paste here what you posted on that thread as many may not like to visit the other thread to read the initiating part of it.

Following is what @Investor_No_1 posted in the previous thread.

I started the investment journey around 2010-11 with always a long term perspective right from Day 1. Never got much urge to trade, short or medium term and neither got attracted much to momentum plays. It is indeed painful to see the momentum trades do exceptionally well, specially after knowing what those momentum trades are, and still not participating in it. This has happened multiple times with me over the last decade but I have consciously stayed away from them. Why - because that is not my strength and I do not trust my instincts in taking right decisions at right time with those plays. Also, maybe because I have not identified those momentum myself and it was acquired knowledge from various forums. The day I identify a momentum opportunity myself, I would definitely bet on it.
.
Now, coming to my style, when back in 2010 most of my colleagues were busy buying Bharti Airtel & Idea in telecom, I liked the huge data opportunity of Tata Communications. I liked their enterprise segment and saw huge opportunity in the assets they owned. Tata communications was one of my first significant bet…but it was way early of its times…I sold it at minor profit only to see if I had held on to it till today, my largest bet would have been a simple 10X in 10 years…the exact kind of returns I would look at.
.
Why this story - because believe in yourself. Your thoughts, if right, would fructify with time. Just because no one looked at Tata communications until an year back does not mean it never had the capacity to produce results. In hindsight, I could have used the entire last decade to accumulate it, make the final dig at March 2020 lows when Chandra added to his portfolio and could have made a killing in a simple Tata group company…A big learning for me.
.
Similarly, when I started investing a decade back - HUL used to hover around Rs 200. I liked its huge consolidating time range and sold that idea to one of my colleague who was a little senior to me in investing. Point to be noted was that although he has maybe only couple of years of more experience than me of the markets, but he had experienced the global recession of 2009 first hand. I had only entered when things had again become rosy again. He added HUL which he still holds and I did not. I saw HUL to do the breakout of multi years very closely but did not add a single share as it always seemed expensive and I waited for dips. Lost on this “simple” 10X in 10 years opportunity again. With the experience I have today, HUL at that time was worth selling a home and investing in it as very rarely such “simple” shares give such a tremendous opportunity. The money invested then would be yielding at least 3 times more via HUL dividends as compared to rent a house would get in any tier 1 city in India and capital grown more than 10X compared to almost stagnancy in housing market.
.
So, why have I been so averse to short term trades, cyclicals etc. and so glued to simple names…probably because quite early on, in the first year of my investment journey, I experienced loss of total capital in one of my holdings. Although it was just 2% of my portfolio then, but it gave me a long lasting lesson. The stock was of Koutons retail, a company which myself I had used to a great extent for purchasing and liked its quality and can still remember the flock of people inside the stores with no place to stand inside the stores! A week before the “final crash” happened, Koutons featured in one of the leading broker’s research report as a great buy!
.
Lessons learnt -

  1. Things you see, feel, use and admire can still go bust.
  2. Leverage/Debt is one of the worst enemy of self as well as any business.
  3. Protection of capital is paramount in journey of investing.
  4. Research reports and analysts are as clueless as any novice in the world of investing.
    .
    With all above backdrop, I began getting interested in most ethical firms, with top class management, doing simple businesses, growing decently with all check boxes ticked except the one box which stands tall in most investors list - Valuations!

Regards
Sujay

8 Likes

During my early years of investing, I was very value conscious and seem to look for undervalued plays, turnarounds, dark horses but with a decent, ethical, well known promoter/management. Debacle of Koutons and Bajaj Corp share pledging had made it clear to me the importance of a strong, ethical management. Finance was also a field where India was supposed to grow at least twice the GDP as a developing underbanked economy with many sub-segments where not even banks wish to enter. Bajaj Finance at sky high valuations and doing everything right, I thought that I had found my such Dark hourse in the most ethical and well managed promoter family of L&T.

L&T finance - Strong parentage, Strong Management, no scarcity of funds, very aggressive vision for growth, aspiration to become a bank, undervalued compared to many, Legacy book issues - Not debilitating but rather an opportunity to improve and hence rerate under right vision…this is where I started with my dark horse around 2012. Just like Bajaj Corp, I started accumulating month on month, Q on Q & Y on Y.

New leadership brought in new vision. They gave up idea to become a bank, sold insurance arm to become leaner, tried to sell AMC but at right cost, developed clear focus on rural & housing and strongly & surely reduced their corporate book size. The management did walk the talk very aggressively and market rewarded with a quick quadruple from 2016 to 2017. Unlike other NBFCs, they managed NPAs very well during this swift upmove and restructuring their loan book.

It was the early times of the NBFC crisis & L&T infused further funds at this juncture at almost the top of the stock till date. Had I sold it at this stage, as I had got strong hints of a top along with a big systemic issue, I would have made solid 32% CAGR on my initial buy price over a 5 year period, with L&T finance making up almost 25% of my portfolio then. But, I held on and next two years were one of the most painful in my investing career so far, as I saw the price falling by 60%. I got numerous occasions to exit but I held on. Finally realizing that the NBFC mess was much deeper than I had anticipated, I sold in one of the major upmove just before the March crash.

The two year wait and the almost 35% drop in sell price resulted in final CAGR of 14% over a 7 year period. A staggering 32% CAGR in my largest holding making 25% of my portfolio dropped to a normal 14% CAGR over 7 years!

Key learnings for me going ahead -

  1. This was a clear case of Right Management, Right valuation, Right time, Right Company BUT Wrong Business!
  2. In Finance, always chose the leader. There is a reason why it is highly valued and trust that reason.
  3. In Finance, always chose a conservative Management over an aggressive one.
  4. In Finance - never venture out of a leading bank and Insurance (I would write about my thoughts on Insurance later). NBFC is not the business I would want to own.
  5. Top investors, promoters doing QIP etc. at any price would never indicate a base. It only indicates that in a business like NBFC, these stalwarts, including the promoters, do not know the worth of the business. Promoters may have other reasons as well - to save their business.
  6. Many Dark horses always remain Dark. NBFC is not a business, for me, to look out for dark horses because of numerous variables not even in the company’s control.
  7. The main reason I did not sell at early onset of NBFC crisis was - The individual company - L&T Finance did nothing wrong. Infact they kept doing everything right. As a long term investor, my sell criteria used to be only if the underlying company falters and that did not trigger. Long term holding criteria does not work in Wrong businesses!
  8. There are always exceptions and be ready to give a big salute to such companies and such learned investors who keep holding them - Bajaj Finance! We are but a small piece in the big game. Learn and keep learning what works for you…and Wrong business like NBFC does not work for a Simple Investor like me!

Disc: Same as above

13 Likes

I have a thought regarding selling.

We can take the help of charts when the price is falling continuously, the collective wisdom and consensus is always correct when the price falls. Yes there would be instances where in these are opportunities but that depends on the level of understanding, if one is certain then once can buy while everyone is selling. But generally speaking, when something is falling for no apparent reason we can think of, or find, or cannot understand a reason completely, I think it is better to book profits and reenter again. After all what is the point of investing if not for the profit booking.

2 Likes

Thanks for your thoughts!

Completely agree with you. It would work for those following charts. Also, many learned investor shun the entire sector immediately on first hint. They do not wait for the charts as well.

For my simple investing strategy - I would not want to be a part of this either group. I would look out for sectors and companies wherein I do not face similar situation again. I would not own an L&T Finance type company again.

Again agree with this point. Most of my friends and colleagues would think same.
Regarding my Simple Investing approach - I would not invest for Profit booking. Rather, if I have to book a profit for reasons other than need of funds, it would mean I have to refine my strategy further. Also, if I have to book profit for reason not directly related to the individual company, this means something even bigger has gone wrong in my approach.

I would invest not for profit booking but rather for wealth generation & growing dividend income. I agree wealth can be generated by profit bookings and reinvesting as well, but for that I would need to be right at 4 times than 1. To be able to accomplish it in most Simple manner, I need simple businesses who let me do this YoY!

2 Likes

No, I am not taking about making any style complicated. My point is that at times, if the price falls continuously and if we cannot understand it completely or if it is beyond us, we should preserve what we have got until that point. And these do not occur often, only at times. Of course, who have deep understanding would not sell but buy at this point. Even value investors I guess would invest in times like these.

So it is always beneficial to keep an eye on the profit and book profits if need be, than witnessing a big fall in the price, the highs the stock may never get back to. I say this also because we can always reenter, it is not like once we are out, we are out forever.

A single day fall or LC is understandable, but a continuous fall week over week or month over month, then the market is right, at least for that period of time.

I think this could be possibly one of the reasons why many people cut down on their allocation once it breaches certain weight in their PF.

And I don’t think such falls happen in secular growth stories, they happen in finance, commodities, cyclicals, exports, highly regulated industries, etc.

3 Likes

Agree, when the unknown of business as well of individual company is more, that is a prudent step

Precisely, and that’s why now I prefer to look for my Dark horses in secular sectors…

All above stocks discussed so far, I managed to get decent CAGR over long term - inspite of being in the wrong company in one case and in the wrong business in another. (Except Koutons, of course, which although holds top position in learning but not so significant financially as it only formed 2% of my negligible portfolio size in first year of investing).

Today I share the stock which resulted in substantial capital loss for me and hence the learning is also substantial. The stock is Max India (before demergers and also after). I started accumulating Max India few years before the demergers as I liked few businesses it operated in. I also liked the strategy & execution of the promoter…that is until then. Demergers - I again thought was a huge value unlocking exercise and I started accumulating all individual businesses. The businesses I liked were Life Insurance, Health Insurance, Senior Living in the order of liking. What I got as inheritance were Hospitals, Packaging, Real estate…and a Promoter which were on continuous lookout for exit!

Each demerged business went through painful periods. Max Financial - Several failed attempt to first merge with HDFC Life and later to rope in Axis bank (finally materialized). Max India - The main reason I invested here, Health Insurance, was completely sold to a PE. Today, it is in able hands and future looks stable. Returns are also decent for both Max Financial & Max India over last 5-7 years. Max Ventures - A very complex structure remains yet again. This was the piece I never understood well but still ended up buying after demerger as I believed in the promoter to create something big eventually. May be they will!

Learnings for me to remember ahead -

  1. Stay away, as much as possible, from conglomerate businesses. Of course there are exceptions. Better for me to remain an exception here and stay away!
  2. Never invest in a company for liking of a part of its businesses. Look for pure plays. More Simple to understand, track and value!
  3. Venture companies are very tricky - Stay away as much as possible.
  4. Stay away from companies where promoters are on lookout of exit. A seller would always target things best for the deal and the wait for the right deal can be frustrating. Not worth in a country full with numerous other good Simple businesses.
  5. My exit in both Max India and Max Financial were at the wrong times…Just before they made their final deals. I am happy that they happened at the worst of Times, as they gave me the best of Learning!

As always, thoughts & views Welcome!

5 Likes

On one hand this & various other articles speak of market frenzy and wild valuations of numerous stocks (high and low quality alike), while on the other there are some stocks of good quality companies still available close to March 2020 lows!! (although they are also highly valued)…

…and then there is one and only one, one of its kind, a stock in its own league which does not seem to bother about the mother of all bull runs, Market melt up or melt down, mother of all recessions in the coming and what not…it is good old, most talked about, our very own ITC…all this makes me think that either melt up comes or melt down or inflation or recession or whatever…there still exist some stocks which are charting there own path, silently not really bothered about what happened, what’s happening or what’s going to happen!

Disc: Invested in ITC. largest holding in terms of cost of acquisition. Started accumulating since around April 2020. Not a buy/sell recommendation. Above post only for academic purpose.

4 Likes

I would now mention about some companies that I still hold and which form a significant percentage of my portfolio…one such firm which I started buying around 2014 is Pidilite Industries. The problem which I faced with this company was that it did not give me enough chance to accumulate and I had to buy it every time at significantly higher prices than my initial buy price.

My Big Pidilite Mistake

Around 2014-15, I got some lump sum as my variable pay and I thought to invest that in a basket of firms I already owned. Pidilite was one of them. I have a habit of buying in SIP manner with small tranches. Pidilite earned an amount of Rs 9000 (amount is indicative only). While placing order multiple things were going on and by mistake I placed one extra “0” in the amount and order was executed for Rs 90000 (amount is indicative only). I quickly realized my mistake. Pidilite stock was around Rs 400 then.

I had this unique hesitation of selling anything quickly so I didn’t feel like selling the extra amount I had bought. I thought that with the conviction I have here, I am confident that my invested money would do well, so I let it be…

In hindsight, now I think what was my big mistake - It was not adding that extra 0, It was not letting it be, but it was not adding as much 0 as I could if I had so much conviction and understanding that the business would do well!

Pidilite is one stock which I have purchased at levels from 300 to 1200 (although very small percentage at 1200).

And I am well aware, a decade from now, in hindsight, I would still feel why didn’t I add an extra 0 when I purchased it at 1200 as well!

Disc: Invested in Pidilite & biased. Forms approx 10% of my portfolio. Not a buy/sell recommendation. Above post only for academic purpose

6 Likes

:slight_smile:

I share your pain!

Brother, I would not call it pain, at least yet, for those who started accumulating from 2020 onwards. But yes, those who hold it from earlier times, it would be a true testing journey!

I remember one such stock which tested my true patience. It is Tata Consumer, which today is my largest holding!

As i mentioned in thread of ITC once, the day when the patience of the most patient investor would die down, the day when the twitter etc. would start speaking of the blunder of ITC investing, the day when I would think that I have had it enough…would be the day when ITC’s next story would start…some savvy momentum investors would enter at that time but a Simple investor like me cannot afford such luxury!! :slight_smile:

7 Likes

I feel that! Started investing in ITC in 2018/2019 at 300+ levels and since then have found solace in averaging down and Aashirvaad salt in my tears.

6 Likes

Another company which I hold and which make almost 10% of my portfolio is Marico.
This company has a history of transforming itself with time, and to my positive surprise, I saw the glimpse of that DNA in the crash of 2020.

Starting from Bombay Oil company as a commodity play, they created top brands in the commodities they operated in - Oils. Hair Care & Edible Oil. What attracted me to this company back around 2011-12 was its strong focus on premium offerings, their well known Nihar story and their strong capability to create brands.

Saffola Oats, a quick 100 cr sub brand (although followed by stagnation), made me believe its capability to experiment and extend brands, so I kept adding during 2011-2013 and held on to the story…

I didnt know what the future would be for this “Simple” company, how it will eventually fare against top MNCs…I had also not seen a crash that is until 2020 when I really saw what this company is capable of…I really understood the meaning of DNA of a company…the way it transformed itself to a predominantly foods company was commendable…

I still hold what I bought in 2011-13, did not sell anything in crash and added more in 2020…followed a very “Simple approach” of buy and hold, initially buy on dips and add to your conviction in crash (at significantly higher than initial buy prices)…giving me approx. 22% CAGR over 8-9 years (not considering dividends and not considering the short term huge CAGR for that added during the crash & recovery)

Any regrets, Yes - Did not convert the strong conviction into aggressive buying back in 2011-13.

Would be eager to discuss others thoughts on such simple companies & simple strategies…

Disc: Invested & Biased, Not a buy/sell recommendation. Discussing Simple companies for academic purposes

8 Likes

I would like to discuss capital allocation in this strategy.

It seems that the biggest regret you have in these companies is low allocation at the time of first purchase. This is consistent with my hypothesis that lump sum investment gives better returns than sip. The market and particularly quality businesses trend upward in the long term. So it would be best to buy full allocation at the time of first purchase. If the thesis fails, the position can be cut in subsequent quarters. If full amount is not available then further purchase could be done averaging up.

There is a school of thought that one should hold cash and wait for corrections. Some call it value investing and others call it market timing. Another strategy is to keep a constant equity cash allocation and rebalance periodically. These strategies reduce performance as well as risk. Tax and transaction costs are an additional problem here.

I allocate 10% of the portfolio at initial purchase (I have a concentrated portfolio) and add if the company outperforms. What is your method of allocation? Has it changed with time?

Thank you

5 Likes

I congratulate you for having a very strong allocation strategy. 10% allocation in first buy would mean strong conviction and clarity of thought! It would mean a mind free of noise, free of FOMO, free of clutter!

My allocation strategy is a buy on dips over a period of time until desired allocation is reached and I am ok with that as for quality companies a long buying window, even at higher prices, does not matter much over longer terms…say for example I would reach 10% allocation in maybe 10 tranches…I don’t mind paying even double of my initial investment as well even within same year of buy…that’s probably because my mind is yet not as clutter free… although I have concentrated portfolio in terms of say 80% in top 10 picks but remaining 20% is a long tail as I keep seing potential in lot of firms and many times lose focus on where I want to be in…this focus comes over time as I keep following the company…and which is worthy of reaching the 10% mark may happen over a year or so…there are exceptions sometimes but rare…

Now regarding my regret of low allocation, let me explain the true essence of what I felt and wanted to convey…back in around 2010-12, whatever allocation I did was decent from my perspective back then… but in just a decade, the allocation looking back seems meagre… obviously things like inflation, salary increase etc. plays a role but despite that I was very much capable of going all out on equity then which I did not because of playing safe and allocating only a x% to equity…which over time looks very meagre and could have been more aggressive in this overall allocation to equity…and that’s because most companies I chose were simple enough to do reasonably well than any other asset class over long term…hope I am able to explain the thought now…

5 Likes

I will now jump ahead to last year and current scenario, will talk more about earlier learnings later…as still there are many important stocks in past which provided immense learning…

In the entire crash of 2020, I did not sell a single share, I built on the core by adding existing top convictions in dips. I only sold the non leaders that I always wanted to get out from, irrespective of crash, and used the proceeds to build on the core.

The big mistake I did is when I got influenced by noise around, specially of senior investors and stalwarts (not that they were wrong but that they are not me), and during the 3-4 days of the bottom when I had prepared a significant cash to invest…I waited for bottom giving up on my buy on dips strategy which was, is and would have worked beautifully.

Point is I had absolutely no need to look for the next leader, the next sector to lead etc etc. as my stocks are the best for me and indeed they were as they were the first and swiftest to recover and hence I lost out on the ultimate bottom by not being me! Its allright, I made use of that by entering some stocks for which I would not have any money left otherwise and they now give my portfolio a little more balance…

Other than the FMCG heavy portfolio I had, the sectors I entered last year & this were & are - Consumer discretionary/durables, Retail and Technology.

I will talk on each gradually and would love to have more views on them…

Consumer discretionary/durables

Last year, like all sectors they were battered and then quickly rebounded by great growth once lockdown ended. I feel in a growing economy like ours FMCG is a backbone followed closely by Consumer durables/discretionary as these are also inherently simple consumer facing businesses with strong brands, distribution, innovation as moats…easier to track than other sectors and also more economy facing than a rather slow and steady FMCG.
Some of my top picks here have been Whirlpool India, Hitachi India & Voltas. With Whirlpool & Hitachi - We have the domestic India story going strength to strength and I feel the story has just begun. Apart from the domestic story, with make in India and China + 1 strategy with respect to complete India manufacturing and India as a manufacturing and export hub coming strongly into play here as well. For eg. Hitachi India has target to triple exports in next 2-3 years and Whirlpool India is also looking at making India an export hub.
Voltas - I have a strong liking for Tata group and you cannot miss a consumer discretionary from this group with big digital plans ahead. My allocation to Voltas is still not complete. In last year alone I have bought in almost 2-3 tranches with later ones at 50% above my initial buy price.
Other than these, I also consider United Spirits & United Breweries as part of this group, which I added during last & this year as well.

Currently Consumer durables/discretionary form approx. 10 % of my portfolio and I am still building this part (by pruning some non-leaders I have and new funds when possible) for next decade or so. Ideally would like this basket to be at 15-20% mark…

Technology

I missed the huge technology decades earlier. I corrected this mistake last year. Here again I have followed a basket approach and have targeted excellent midcaps from established groups. Oracle Finance, LTTS, Tata Elxsi, LTI, Mphasis are the ones I have gone ahead with as a mix of Product, services, engineering service/platforms play. I also consider Hitachi ABB Power products as part of this basket.

Technology forms approx. 7% of my portfolio. I would add more if there is any crash but may not at current prices until some significant development happens in individual companies or I find any new unique ones. Ideally would like Technology to be at 15% mark at least.

Digital Plays I am really excited about but sadly do not have many options in listed space…companies like Edutech, Health tech etc. I understand these can be big wins or complete misses. Have a tracking position in Just Dial & Nazara in the Digital space…more ideas in this space welcome…

Disc: Invested in all names above and hence biased. Not a buy/sell recommendation. Views absolutely personal, for academic purposes and can be completely wrong in my assessments and may change my mind/thought on any of these anytime.

2 Likes

Just wanted to know why have you not chosen Tata Global Products in FMCG…

One of the first FMCG company that I began investing is Tata Global (this was the same time as Marico), now Tata Consumer. As a matter of fact, my conviction in this stock could have been even more than what the Tata group had in it back in 2012-13. So much that I used to get uneasy at this company not realizing its potential, concentrating on abroad markets when the Daburs of the world were marching ahead as home made domestic focussed FMCG. I even wrote a long letter of improvements that I intended to send to the higher management (which I ultimately didnt for some reason). This was the level of involvement in my thought.

Fast forward today, now I compare it with the Unilever and Nestle of the world (not even HUL or Nestle India). This company is the FMCG aspiration of India to first take on India and then the world. Tata Consumer will be India’s FMCG answer to the world. Merely a 60K crore company from the stable of Tatas and would have to be a 10X only to reach the size of HUL of today…look at the runway ahead! With Starbucks, Digital focus, Tata Super app and most important …Now the conviction of the Tatas in their own FMCG giant in the making…the consumer story of the Tatas has only begun.

Biggest regret - When the stock had hit 100 rs mark after few years of holding, my patience reached its peak. Had multiple bouts of exiting but the belief in Tata group kept me going. Deciding not to buy a single more share is my biggest regret with respect to this stock story and not selling a single share is the biggest solace :slight_smile:

I corrected this somewhat buy Tata consumer being my significant purchase in the crash of 2020 at Rs 250 and buying yet again in small quantity at Rs 450 subsequently. (This time the initial buy price fixation and portfolio percentage limit thoughts kicked in. More was the later and I wish such thoughts would not have come in such a beautiful story which gives you the confidence of holding on…)

Disc: Tata Consumer is my largest holding and hence highly biased. Have bought at various low levels of 100-200 Rs. This is not a buy/sell recommendation but only personal thoughts for academic purpose. I may change my mind anytime and can be completely wrong in my assessments

3 Likes