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…
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…
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.