Southern_Cross's Portfolio

Where did I lose money in my investments? - Bandhan Bank, HEG, 8K Miles, Olectra Greentech, Muthoot Capital Services, Repco Home Finance, Yes Bank

Why did I lose money?

Bandhan Bank - I actually bought Gruh Finance and as part of merger with Bandhan Bank, received equivalent shares of Bandhan Bank. Gruh is one of the consistent compounder and I never bothered about its valuation during my first entry as I just wanted to buy the Coffee Can Portfolio shares and observe whether the thesis of Coffee Can really plays out. The risk of MFI component (more than 60%)with Bandhan Bank and losing the brand of HDFC’s stable have a significant change of investment thesis. Original thesis is housing finance investment and now, housing finance component is just around 30% in Bandhan Bank. What I observed is the bias of supporting my investment and so started adding all the positives to it and never did I have really an exit strategy in place. This loss is close to 1% of my PF. Bandhan certainly is good company, I just need to identify when to enter and when to exit.

HEG - I was just looking at the cash generated by this cyclical company and all those traditional metrics like PE,CFO etc and never ever thought of what can go wrong with this company. The main lesson is - for a cyclical company, it usually is the case that we need to sell the company before it is trading in its lowest PE or it in other words, it is near its peak. I added some more shares of it few months back when I found the global cues are in favour of steel cycle based on my scuttlebutt. I am hoping this time I am playing the cycle right. However, my allocation is 1% here and this serves as learning. This loss accounts to 0.7% of PF.

8K Miles - One of my blunders and I kept some shares of it in my demat just to remind me of my foolishness. In fact, I was tracking from its price of 810 and entered only at 330 with around 10% of portfolio at that time. I sold 50% after it reached 100. The integrity of the promoter is so important and here it is missing. Like, 90%. It was itching to put another 5% when it has fallen continuously. I discussed with my wife and showed her my investment thesis. She told me to not allocate any further. Even though she is not in stock market and also not much knowledgeable in financial assets, I do this to remind myself that I am accountable and have someone to answer. This loss accounts to 1.5% of PF.

Olectra Greentech - I did very good research of this. I see big opportunity size and new promoter is among one of the top 50 richest persons in India and been a major player in infrastructure. This has best technology(BYD is the partner), money muscle of promoter and huge opportunity (Electric buses). Their Opex model of operating buses is also very good. However, it is B2G and there is China angle as the most important parts like battery etc comes from China. I exited with 55% loss. I still track this but with pandemic, my assumption is government will not keep aside cash for incentives like FAME. As it is B2G, the chance of success also becomes difficult. This loss accounts to 2% of PF.

Muthoot Capital Services - The company is certainly good. The management is very good. Only, thing bad is my timing of entering this stock. During the crisis, when the stock has fallen to sub 300, I averaged it. After the news of rural economy pick up and rise in auto sales, especially in 2W, I feel this is right investment. The comfort is it is consistent with its sales growth for 10 years and so it is part of coffee can. This loss accounts to 1.5% of PF.

Repco Home Finance - Bought this as part of Coffee Can stocks and it is small cap. The positive thing at this point of time is, there is some traction in housing market. I did not average it. Currently, at 50% loss. Allocation is less than 0.5% of PF.

Yes Bank - I invested in Yes bank for a buy price of 292 as part of tracking. Having seen the 8K miles and the touch of falling knife, I never wanted to put money in Yes bank but was tracking it where it can finally end. There were a couple of positive news like SBI and other banks providing support, Ravneet Gill’s comforting words but somehow I always had this doubt in my mind. How many people would like to put their FDs in a bank which has tarnished image even if they give higher interest? After institutions came on board, especially Amansa holdings invested some 4000 crores at 12 rupees per share, I found some interest and bought some shares at 11.2 rupees. The allocation is still less than 0.5% of PF.

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