Ujjawal portfolio ( Betting on the long-term compounding)

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

  1. DIVISLAB: Allocation: 6.60%, : Invested for Long Term; Will Add on decline
  2. IEX: Allocation: 6.48%, : Invested for Long Term; Will Add on decline
  3. SAREGAMA: Allocation: 6.44%, : Invested for Long Term; Will Add on decline
  4. BAJFINANCE: Allocation: 5.46%, : Invested for Long Term
  5. ALKYLAMINE: Allocation: 5.28%, : Invested for Long Term; Will Add on decline
  6. DEEPAKNI: Allocation: 5.23%, : Invested for Long Term
  7. HDFCLIFE: Allocation: 5.17%, : Invested for Long Term
  8. LAURUSLABS: Allocation: 4.68%, : Invested for Long Term; Will Add on decline
  9. IDFCFIRSTB: Allocation: 4.68%, : Invested for Long Term
  10. ICICIGI: Allocation: 4.62%, : Invested for Long Term
  11. ASTRAL: Allocation: 4.61%, : Invested for Long Term
  12. RELAXO: Allocation: 3.86%, : Invested for Long Term; Waiting for right time to switch in Metro Brands
  13. CDSL: Allocation: 3.81%, : Invested for Long Term; Will Add on decline
  14. RADICO: Allocation: 3.65%, : Invested for Long Term
  15. TATACONSUM: Allocation: 3.43%, : Invested for Long Term; Will Add on decline
  16. TITAN: Allocation: 3.42%, : Invested for Long Term
  17. CLEAN: Allocation: 3.02%, : Invested for Short Term, Waiting for right time to Exit
  18. NEOGEN: Allocation: 2.35%, : Invested for Short Term, Waiting for right time to Exit
  19. PIDILITIND: Allocation: 2.35%, : Invested for Long Term
  20. HDFCBANK: Allocation: 2.28%, : Invested for Long Term
  21. SEQUENT: Allocation: 2.18%, : Stuck, Waiting for spike to exit.
  22. ASIANPAINT: Allocation: 2.11%, : Invested for Long Term
  23. LTIM: Allocation: 1.95%, : Tracking and adding, Waiting for deep Correction to invest heavy
  24. SUZLON: Allocation: 1.93%, : Invested for Short Term, Waiting for right time to Exit
  25. JPPOWER: Allocation: 1.89%, : Invested for Short Term, Waiting for right time to Exit
  26. YESBANK: Allocation: 1.86%, : Invested for Short Term, Waiting for right time to Exit
  27. 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.

6 Likes

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

  1. how are you gping to track them? I mean, what all you will be doing to keep tab on them?
  2. 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?
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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.

For retirement corpus, relying on EPF and NPS.

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Ujjawal : Good clarity in your communication and wishing you good returns. Few points :

  1. Your stock selection system seems good and can deliver long term value accretion.
  2. 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)
  3. 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.
  4. 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.
  5. In your watch list, I like VBL, PI Industries and PSP Projects.
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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.

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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.

2 Likes

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.

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Hi Ujjawal,

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.

  1. Which Debt / Liquid MF would you suggest to park Emergency fund (EF) ?
  2. Whats the Impact of RBI’s repo rate fluctuation on that Debt fund which will have my EF ?
  3. 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).

Thanks !!

Thank you for the feedback.

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.

2 Likes

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.

  1. Nippon India Liquid fund
  2. Axis Liquid fund
  3. ICICI Pru Liquid Fund
  4. 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.

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