Southern_Cross's Portfolio

Hi Dhiraj,

Here are my answers.

  1. Agree. Like I mentioned in my original post, I would like to see it to 15 companies eventually and some tracking list. Among my coffee can list, Repco Housing Finance which is at the moment is decreased by 70% and so it did not even feature in the top 25 list & LIC Housing Finance is down by 50%. Abbott India gave well over 150% returns. The lesson I learnt is - the housing finance sector which was widely considered to be no risk play when faced with headwinds can go down drastically, especially when it is small cap. To move to a concentrated portfolio, I need to understand the business, have some margin of safety and build strong conviction. I am currently working on this… .

  2. Agree with respect to weightage and would like to consider decreasing it further. Actually, I want to have my Top 10 stocks to be sure that the chance of losing money in these to be very less. This is the reason why BSE ended with 9% weightage. Now why BSE is given this weightage - I have good margin of safety. and so my conviction is high. I completely agree with you on hike of management charges considering their performance so far.

Here is my analysis of BSE.

I think I have become biased in BSE and have to learn to think more objectively.

These are some other things I thought about BSE.

  • When NSE gets listed, people would definitely have to trade in BSE and this way it can help people to get accustomed to trade in BSE and some market share also increases in equity- NSE is valued between 40K to 50K Crores and I am sure there will be more float.
  • The chance of me losing money is very less here as the stock is trading below book value and also the value of BSE building is considered as some 35 cr in book value as against its market valuation of 800 cr which is done some years back
  • India INX value unlocking option - I think it is a hidden asset here. I see more value in monetizing this compared to BSE Star MF
  • The management is trying several things - gold mini options, BSE Ebix Insurance, direct user access which is mentioned during concall, monetizing BSE Star MF etc - I think they want to showcase it like an integrated e-commerce platform and may come with packaged pricing which can attract more traders.
  • SEBI enforcing “Best Price” in place of default NSE for brokers by August end. For example, in HDFC Securities NSE comes as default when I buy/sell a stock.This can change the game in this duopoly business. Need to see the results though.

Regarding HDFC AMC, I think there is some more penetration left for distributors. With Index investing, the fee for distributor will be almost nothing. My analysis about HDFC AMC is covered in the below threads in detail.

  1. I agree with you regarding shocks of Sterlite’s management. In fact, I took a calculated decision of buying it only after seeing their buyback price and investor presentations. I am seeing this more of a trading bet rather than portfolio stock even though the company has many good points after its demerger from Sterlite power in 2016.At the moment, the management cannot go for delisting below 150 as it is the buyback price determined by them.

  2. Agree. Hence, my position is also less here.

Thank you for taking time and sharing your investment framework. I am still working on improving my investment framework.

Cheers!!!

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