Hey Friends,
Since I began investing in 2018, the stock market has been on a roller coaster. By trying so many things in my small investment journey, I have identified the following stocks for long-term wealth generation. I have been regularly reading threads on ValuePickr for the past five months or so; however, this is my first post here.
Age: 30 years
Currently employed by PSU firms.
Qualification: B.Tech. From IIT BHU, Varanasi
DIVISLAB: Allocation: 6.60%, : Invested for Long Term; Will Add on decline
IEX: Allocation: 6.48%, : Invested for Long Term; Will Add on decline
SAREGAMA: Allocation: 6.44%, : Invested for Long Term; Will Add on decline
BAJFINANCE: Allocation: 5.46%, : Invested for Long Term
ALKYLAMINE: Allocation: 5.28%, : Invested for Long Term; Will Add on decline
DEEPAKNI: Allocation: 5.23%, : Invested for Long Term
HDFCLIFE: Allocation: 5.17%, : Invested for Long Term
LAURUSLABS: Allocation: 4.68%, : Invested for Long Term; Will Add on decline
IDFCFIRSTB: Allocation: 4.68%, : Invested for Long Term
ICICIGI: Allocation: 4.62%, : Invested for Long Term
ASTRAL: Allocation: 4.61%, : Invested for Long Term
RELAXO: Allocation: 3.86%, : Invested for Long Term; Waiting for right time to switch in Metro Brands
CDSL: Allocation: 3.81%, : Invested for Long Term; Will Add on decline
RADICO: Allocation: 3.65%, : Invested for Long Term
TATACONSUM: Allocation: 3.43%, : Invested for Long Term; Will Add on decline
TITAN: Allocation: 3.42%, : Invested for Long Term
CLEAN: Allocation: 3.02%, : Invested for Short Term, Waiting for right time to Exit
NEOGEN: Allocation: 2.35%, : Invested for Short Term, Waiting for right time to Exit
PIDILITIND: Allocation: 2.35%, : Invested for Long Term
HDFCBANK: Allocation: 2.28%, : Invested for Long Term
SEQUENT: Allocation: 2.18%, : Stuck, Waiting for spike to exit.
ASIANPAINT: Allocation: 2.11%, : Invested for Long Term
LTIM: Allocation: 1.95%, : Tracking and adding, Waiting for deep Correction to invest heavy
SUZLON: Allocation: 1.93%, : Invested for Short Term, Waiting for right time to Exit
JPPOWER: Allocation: 1.89%, : Invested for Short Term, Waiting for right time to Exit
YESBANK: Allocation: 1.86%, : Invested for Short Term, Waiting for right time to Exit
LTTS: Allocation: 0.66%, : Tracking and adding, Waiting for deep Correction to invest heavy
Tracking:
Vedant Fashion, Varun Beverages, Timken, Suven Pharma, Puashak Ltd, PI Industries, PSP Projests, KEI Industries, Rajratan Global wire
Inviting views from fellow valuepickrs. Awaiting your valuable feedback and suggestions.
I have 13 stocks common with you. But i want to reduce my stocks from.current 28 to around 15 initially. Your choice of companies are good.
Just some queries
how are you gping to track them? I mean, what all you will be doing to keep tab on them?
This stocks portfolio form how much percentage of your overall equity portfolio? Is there any mutual funds holding too? And hence this diversification in direct stocks?
I use Screener.in, where I have created the watchlist for my stock portfolio. I get updates on my email, and it is also very useful for tracking the quarterly results. I also use IND money to track all my investments in one dashboard.
I maintain 90% of the equity in my portfolio. (50% in stocks and 40% in mutual funds).
Rest 10%, I maintained in debt in PPF, Liquid funds & cash ( Liquid fund & cash sufficient to cater my emergency corpus).
I will maintain the number of stocks in my portfolio between 20 and 25.
Ujjawal : Good clarity in your communication and wishing you good returns. Few points :
Your stock selection system seems good and can deliver long term value accretion.
Where you have mentioned “Will add on decline” - is the source for this going to be new investment or from the proceeds of “waiting for the right time to exit” ? (if later, see my next comment)
waiting for the "right time to exit " can be a tricky affair unless you have a clear plan. IMHO it is better to exit the stocks in which you have lost conviction. This can also help to prune the no. of stocks in your PF.
Another suggestion : “MF holding at 40 %” - since you have a decent system of stock selection and PF tracking system, you will be better off to move away from equity MF funds in the long term. SIP into your existing high conviction stocks from the proceeds.
In your watch list, I like VBL, PI Industries and PSP Projects.
About 4th suggestion…what if his portfolio manages very less returns or below index returns? What if he churns a lot? Then what will happen to his goals? Mutual.funds will give him a chance to fulfill his goals , not depending on his own skills as fund manager.
Yes - if one can successfully build equity MF portfolio that would generate alpha over index return say for the next 5 or 10 years. This is also becoming more like stock selection these days - no sure way when you consider long term performance of MF schemes. Looking at Ujjawal’s stock selection approach I feel he can generate better returns by proper and regular review and rebalancing his PF. If equity MF investment is a must, then some passive funds (index ETFs) can do the job to meet index return with lesser effort and risk.
I might be last person to give you any feedback on your selection, since I have only 3-4 yrs market experience , but I do have one question for you where I also sometimes feel pain to answer and apply on my portfolio at same time.
You have diversified portfolio and almost above 25+ stocks selection, and I am on the same side with almost 50 stocks in my portfolio (just like Nifty 50)
so my question is how will you average your portfolio in future suppose there is amost 8-12% drawdown in market. How will decide which stocks to add on fall and how much percentage for each. I really don’t know about your holding cash % but really would also be interested how much you hold in cash.
Thanks for sharing your insights. I am looking for asset class where I can park my Emergency fund (EF) and some money targetted for short term goal.
Which Debt / Liquid MF would you suggest to park Emergency fund (EF) ?
Whats the Impact of RBI’s repo rate fluctuation on that Debt fund which will have my EF ?
I have some amount lying idle in my Bank account which will be used in next 3-9 months, In which Liquid fund do you siggest me to park that money considering RBI RR will either impact it +ve or wont impact much at all …
on All above query, I am expecting that the Deb fund should beat the SB interest rate and Flexi FD Interest (Swep in).
Sources of new investment will be additional investment, in which I will invest in a staggered manner. Moreover, I will also redeploy the capital I will get after selling the stock with a short-term view.
In a few stocks, where I have taken a very small allocation, I am just betting on turnaround stories. The reason why I mentioned “the right time to exit” is that these stocks are still in momentum due to multiple reasons. The company has taken various steps in sync with the government, which perhaps places them in a very good position in terms of risk and reward. I am not much concerned about these stocks, as the allocation is very small.
Barring these 4 stocks having a short-term view, the number of stocks boils down to 23, which is comfortable for me to track. Going forward, I will not go beyond 25 stocks in my portfolio.
My MF investment is goal-linked, and I invest in stocks for long-term wealth generation. All future goals will be covered by the SIP in MF. I started these SIPs in 2017 (at 24 years of age). I also keep increasing the SIP amount by 10% every year as per the increase in income.
As I said earlier, in a few stocks where I have taken a very small allocation, I am just betting on turnaround stories. These companies have taken various steps in sync with government initiatives, which perhaps places them in a very good position in terms of risk and reward. I will be out of theses stock anytime soon.
Barring these 4 stocks having a short-term view, the number of stocks boils down to 23, which is comfortable for me to track. Going forward, I will not go beyond 25 stocks in my portfolio.
I change my portfolio only if my thesis points prove wrong, such as a loss of competitive advantage, permanent damage to operating margins, corporate governance issues, market saturation (no growth in the sector as a whole), and so on. As long as my thesis points are intact, I will stay invested even if the market corrects. I also take this opportunity to add more if any corrections are made for any temporary reason. I do track the quarterly results and Concall for ways forward.
I maintain an emergency fund (equivalent to six months’ worth of expenses) inclusive of cash allocation, which is less than 2% of my portfolio.
I use four liquid funds to park my money. These funds allow for an instant withdrawal of 90% of the invested amount, with a daily withdrawal limit of Rs. 50,000. These funds at least give you a far better return than keeping them in SB.
Nippon India Liquid fund
Axis Liquid fund
ICICI Pru Liquid Fund
Aditya Birla Liquid Fund
Disclaimer: This is not a recommendation; please conduct your own research before investing.
Impact of RBI repo rate fluctuation:
Short and medium term debt mutual funds will be relatively less impacted versus longer term debt mutual funds given their limited vulnerability to interest rate risk.
Liquid funds fall under the short term debt fund category, which invests in Treasury funds or securities with maturities around 91 days.
I liked the clarity you have at your age, that you have a sound plan of investing in MF(s) for financial goals, EPF/PPF for retirement and Stocks for long term wealth creation.
I would like to know if you have done some performance comparison of your portfolio returns from 2018 to 2023 with Index, and How is the performance? Probably you may have to measure XIRR returns since you are investing regularly in most of the stocks.
If you have generated decent alpha of 4%-5% over the Index, then you are on right track. It may improve once Market rebound from current stagnation.
Your stock selection process will improve over a period based on your learnings, but long term approach seems good.
I do not have temperament for long term investing hence invest in about 20-25 stocks from 3-4 years perspective, and buy undervalued stocks and sell once they look overvalued. The average holding time is less than 3 years, with only few exceptions. For holding cash, I use Parag Parikh and Quantum Liquid Funds and some times Overnight Funds as these are more safe than some other Liquid Funds. This cash is generated after booking profits from selling the stocks, so that I can re-invest in new stock once opportunity is available.
But I have thought about shifting to long term buy and hold approach many times, so I have this curiosity about this approach and the returns it can generate.
Can you elaborate on Pidilite? Why it is included in above list? Considering its recent pathetic performance profit as well as share price wise? Recent means last 5 years to 8 years
Could you please help me understand how this is done?
Is there any excel explained or thread on VP ?
I have been investing for long yet never measured my performance.
I googled, yet no good answers.
I want to understand how portfolio managers calculate the performance of their actively managed portfolio, and how I can replicate it for my own personal portfolio.
I have removed my earlier post, since I might have to do better analysis of all the businesses, before mentioning any of those for Long Term investments.
More close understanding of those businesses is required, since I do not hold some of those.
You can use XIRR formula.of Excel.sheet. First you have to transfer all your trades datewise and buy and sell type with start and end value of portfolio for that particular period.
Its very surprising that you are not calculating your XIRR returns , even though , you are inbesting from so long time. How will you come to.know, whetehr you are better than Index returns or worse? If you are not measuring performance against these paramters like Index returns or Mutual.funds or even Bank FDs, you wont be able.to know whther you are better off invesing in direct equities or going through mutual.funds , active or passive.
