Sumit's Portfolio

You’re absolutely right that trusted brands often show a bias toward their own AMCs, creating a potential conflict of interest for clients. This highlights the importance of unbiased wealth management firms that clients can genuinely rely on for their financial needs.

Regarding PMS/AIF players, while they do operate in the wealth management space, they offer a distinct service focused on maximizing returns, often by taking on higher risks. This can be appealing to certain clients, but most HNIs are unlikely to commit 100% of their wealth to such schemes, especially when their primary goal is wealth preservation with minimal risk. PMS/AIFs can certainly play a role in an HNI’s broader investment strategy, but they are unlikely to be the sole focus. Instead of viewing them as direct competition, I see them as complementary offerings that might attract a portion of a client’s wealth, while the majority remains allocated to traditional wealth management firms.

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Thank you for your kind words.

To address your first question, I don’t practice technical analysis—not because I doubt its usefulness, but simply because I haven’t acquired the technical knowledge needed, nor have I made it a priority to learn. Given my investment horizon of 5-10 years, I believe the impact of technical analysis on my overall returns is likely minimal, which explains my reluctance to dive into it. Additionally, technical analysis tends to emphasize price movements as a guide for investment decisions, rather than focusing on the underlying business fundamentals. This can potentially lead to behaviors that prioritize short-term gains over long-term growth.

As for your second question, I keep my approach broad and open. I discover potential investments from a variety of sources—whether it’s ValuePickr, YouTube videos, screeners, or newspapers. When something catches my attention, I usually take a quick glance at the company’s profile on Screener and review their latest presentations, looking for any red flags that would allow me to dismiss it quickly. Only if I find no significant red flags does the company pique my interest, prompting me to dig deeper. Very few companies meet this stringent criterion, but when they do, I’m willing to expand my circle of competence by studying both the industry and the company more thoroughly—provided the objective criteria align (good management, strong financials, a solid business model, reasonable valuation, and significant growth prospects). In essence, my focus is more on eliminating ideas than selecting them, which means I end up pursuing only those that pass this rigorous filtering process.

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Thanks for your elaborate answer.

The reason asking for technical analysis is we can get better exit.
Even after so much of detailed analysis, some details will be missed which could impact the returns.
Those details will be known in hindsight. We had number of examples like that. So technicals could give prior indication

What could be your approach if you come to know that something is wrong in the company which you hold?Do you come out of the stock immediatly ? Do you have any such incidents in your journey?

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I agree that technical analysis can serve as a useful leading indicator for potential upside or downside when making buy or sell decisions. However, its impact may be limited for someone whose default behavior is to hold onto stocks unless a fundamental issue arises. That said, I do acknowledge that price and volume movements can sometimes reveal underlying fundamental problems before they become apparent to most investors. Therefore, learning technical analysis is on my to-do list.

Regarding your second question, the decision to sell depends entirely on the nature of the issue with the company. A recent experience with Aditya Vision taught me a valuable lesson about being cautious in reacting to market news. I came across a Twitter thread alleging accounting malpractices in the company. Without verifying the information or waiting for management’s commentary, I impulsively sold 80% of my holdings. Today, the stock is trading at three times the price at which I sold it, and the news turned out to be a hoax spread by an anonymous account. This mistake has made me more reluctant to sell quickly.

In my view, most stocks go through turbulent periods, including depressed earnings and unfavorable macroeconomic conditions. These challenges alone do not warrant selling. I approach this like a doctor diagnosing a company’s “illness.” If the issue is temporary, such as a few bad quarters, rising raw material costs, changes in key management personnel, or unfavorable macro conditions, I hold. If the issue appears to be chronic—persistent underperformance, consistent mismatches between guidance and outcomes—I reduce my exposure or exit the position entirely, depending on the severity. However, if the problem is terminal, such as a lack of management integrity, a permanent change in the business’s economics, or a maturing business with little growth potential, I sell outright. My experience with Yes Bank, where I sold as soon as I questioned management’s integrity, saved me from a 90% capital erosion.

There is one exception to my reluctance to sell. If I identify an opportunity that is significantly superior to my current holdings (emphasis on “significantly”), I am inclined to sell. Conviction in a new stock takes time to build, and a new investment, no matter how promising, will likely lack the conviction I have for a stock I’ve monitored for years. Moreover, selling a stock incurs capital gains tax (currently at 12.5%), which adds to the switching cost. However, if the new stock justifies it, I won’t hesitate to make the move.

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I live in Bangalore. It is possibly second most recognized brand here other than featherlite.