The harsh portfolio!

[harsh.beria93]

@Rajesh_Bajaj

hello sir, I really liked your mean reversion strategy in stocks picking & i also get benefited from your mean reversions picks of stocks. Are you find any mean reversion play in current market environment ?

In the past few months, the major transactions are summarized below:

Bought: Eldeco Housing, Bodal chemicals, NGL Finechem, Aimco pesticides, India pesticides, Vikram thermo, Faze three, Chavda Infra
Sold completely: Kanchi, Ambika cotton

In terms of mean reversion opportunities, a lot of chemical/agchem companies are attractively valued and I have been increasing my allocation in that space. At the portfolio level, this basket is now close to 20% weight.

In terms of sectors working right now (i.e. strong numbers + price action), the clear outlier is the shrimp sector (~10% weight in Avanti + Sharat). There are bits and pieces in diverse sectors which are working right now (e.g., Godfrey Phillips, Kaveri seeds, AGI Infra, Shri Jagdamba, etc.).

In terms of valuation mismatch relative to recent growth, I feel these are some companies where I have also been increasing weight: Faze three, Sharda Cropchem, Ultramarine pigments, Vinati Organics, Chavda infra.

@james_kerala

Quite keen to know your annual review of portfolio, your comments on overall view on current state of markets and may be an yearly update of current portfolio construction as last detailed update was an year ago.

I have been sharing regular updates since 2020, at this point the value of sharing detailed insights is not helpful for me. I haven’t got any meaningful critical feedback except silly comments and generic gyaan. I would rather spend my time working on more companies than answering frivolous questions on diversification.

This being said, here are the summary statistics until December 2024.

The portfolio is already down by ~8% YTD . And by the looks of it, 2025 seem to be a tough year.

@Abhinav.kumar

Hey @harsh.beria93, What are the headwinds with Dreamfolks? I heard they are not able to maintain pricing but don’t know why and if there’s any other headwind?

Dreamfolks’ main customers are banks who offer lounge services as a perk for their customers. Lounge operators have seen improved pricing power due to high demand for their offered services. I am not worried about pricing power of lounge operators, but Dreamfolks’ main customers are Indian banks and traditionally Indian banks have been able to squeeze their vendors well. For e.g. dreamfolks had to absorb price increase from lounge operators and couldn’t pass it to banks despite such high demand. Its a very asset light business model with largely working capital investments. All this being said, I haven’t built a position here.

[gagan1]

@harsh.beria93

Bought: Eldeco Housing, Bodal chemicals, NGL Finechem, Aimco pesticides, India pesticides, Vikram thermo, Faze three, Chavda Infra
Sold completely: Kanchi, Ambika cotton

Hi Harsh, thank you for the updates. You are doing a great job and I am sure many people have benefitted from your insights, how you go about picking stocks and your position sizing. Is it possible for you to share a table of your current holding with % weight?

[harsh.beria93]

@harsh.beria93

My portfolio beta has consistently stayed below 1 (computed on monthly data with 1-year lookback). Its crazy that despite 80%+ allocation to small caps, my beta has stayed below 1.

Before I gloat too much on my crazy alpha, lets be realistic. Portfolio volatility has been quite high, and beta looks low because of increasing divergence of my returns with Nifty returns as a result of more bottom-up stock picking

Coming back to my point on beta being a poor indicator of risk, here is what happened to my portfolio in last 3 months and how beta values in past periods were incorrect risk metrics.

Once market turned volatile, Beta went past 1 which had never happened before for my portfolio. This is because the folio has gradually shifted towards smaller companies whose stock prices are more volatile than larger companies. So next time, a fund manager boasts their alpha and beta, ask them about the standard deviation of their portfolio.

Standard deviation for my folio was consistently higher than Nifty since July 2023, and this is the reason behind my earlier comments that during the next downturn, my portfolio will fall more than Nifty. And this is clearly visible in this downturn (not something I am proud of, but atleast I could foresee it).

See monthly returns since Jan 2025. This is important for setting realistic expectations.

Date	My returns	Nifty
Jan-25	-7.99%	-0.58%
Feb-25	-8.49%	-5.89%
Mar-25	9.06%	6.30%

[varunm2112]

If your portfolio is inclined more towards smaller companies, isn’t it better to compare the standard deviation of portfolio to the smallcap100 or smallcap250 ?

[AkshayBharde]

Agree. At least Nifty 500 would make more sense. But the point is correct.

[Shashank_Sinha1]

I feel that (exact benchmarking) would make more sense if we are managing someone else money. For someone managing his own money, all one has to ensure is that post tax return is more than nifty (index fund) or a basket of mutual funds one has invested in. Anything below that seems poor utilisation of time/ money as one can easily switch.
So above benchmarking seems fine to me. My 2 cents.

[sachin_tom]

@harsh.beria93 A different question other than your stock picks or logic for picking

How do you track your portfolio, i assume its a google sheet from the looks of it But what all parameters you track related to your portfolio & performance & at what frequency? If you are indexing the portfolio or using NAV to calculate returns - How do you index it & at what frequency you are storing your NAV. Also, would you mind sharing your google sheet tracker template if okay.

Regards & Thank you in advance

[harsh.beria93]

@sachin_tom

How do you track your portfolio

See below how I calculate monthly returns. I have been tracking this metric since 2018. I also store monthly returns for few benchmarks (Nifty 50, Banyan tree PMS, Mittal analytics) and use these monthly returns to calculate NAV. There is no rocket science in calculating alpha, beta, standard deviation; you can simply google!

The harsh portfolio!

I track 2 metric, monthly return (which I call absolute return) and IRR return. Monthly return: For a given month if my starting portfolio value was 100 and I bought stocks worth 10 and at the of the month, my portfolio value is 90 then the monthly return is (90-100-10)/(100+10) ~ (-18.18%). This is what I call absolute return. IRR return is computed by putting all transactions on an excel sheet along with their respective dates, and use the XIRR function. Generally, both these returns are qu…

@varunm2112

If your portfolio is inclined more towards smaller companies, isn’t it better to compare the standard deviation of portfolio to the smallcap100 or smallcap250 ?

My plots are showing that despite investing in small cos, my beta is comparable (actually lower in most times) than Nifty 50, which is a large cap index. Therefore, the point was beta is a useless indicator, one should actually look at standard deviation of a portfolio to set “realistic” expectations, as it atleast has some predictive power.

On benchmarking, I feel its a waste of time to comparing against a multitude of indices. An investor is running a business in the end, and benchmarking should be done against their own opportunity cost. My actual opportunity cost is FD/NPS/MF/Nifty 50/PMes, your opportunity cost might be different from mine. I will not benchmark against Nifty 100 / Nifty 250 / etc, just for the sake of it, it costs my time !

[Rajesh_Bajaj]

@harsh.beria93

Over the past few months, I have made significant changes to my portfolio. In-line with my portfolio allocation strategy, I have simplified the structure into 5 kind of bets (core compounder, cyclical, slow grower, turnaround and deep value)

@harsh.beria93

From now on, I have increased my expected returns to 19%. Earlier, I wanted a doubler in 5-years (15% returns), now I want it to happen in 4-years.

Objective function: Weighted average portfolio returns > 19%

I look at each company from five different lenses which are stated below.

• Business quality (high/medium/low)
• Promoter quality (high/medium/low)
• Financial projections (high/medium/low)
• Valuation projections (high/medium/low)
• Is it a cyclical business (Yes/No)

Hello @harsh.beria93 sir, Its been couple of years since you shared your portfolio allocation Framework & investment process, would like to hear your thoughts on new learning about your investing process. Thank you very much for sharing you knowledge…

[Suresh_S]

Dear Harsh Sir,
Did you add any new company sir recently and their thesis

[Yash_Gandhi1]

Hi Harsh! How are you dealing with this bearish market phase since last 1.5 years ?

[Dhiren_Barvadiya]

Hi Harsh! Its been while you have shared any updates on portfolio.
Can you share how you are maybe rotating capital and navigating this sideways market, any new ideas or business which you looks interesting at this juncture and your 2 cents on them might be helpful.

[Santhavel]

Hi Harsh,

Hope you’re doing well! We have missed your valuable insights on ValuePickr recently.

If time permits, we would be truly grateful to hear your latest thoughts on the sectors or opportunities you are tracking. Your way of stock picking have been immensely helpful to me and many others in the community.
Thanks again for your time and guidance!