Hello fellow ValuePickrs,
I’m a 14 year old student from Mumbai. Valorem is not my real name, but it means Value
in latin. I joined the forum very recently, but I have been learning about investing for around a year and a half now. Below, I will share about my investing journey and portfolio.
My Journey
Before I start, I must say that I am extremely grateful to my family who have supported me in my investing journey despite my young age.
I don’t remember when I first heard about investing and stocks, but I only got interested in them in late 2020. At the time, my father had taken a course on technical analysis. Having a lot of spare time due to the lock down, I decided to accompany my father in one of his courses webinars and was immediately fascinated. I started sincerely watching videos on technical analysis and would discuss my learnings and observations with my father.
Around the same time, I began learning Python (a programming language). This skill has played a key role in my journey as an investor.
By mid 2021, I was pretty good at technical analysis and was an aspiring day trader. I was using technical indicators like RSI, ADX and Stochastic to find good trades and my strategy was quite profitable (backtesting). My parents decided to support me by providing me with a small trading account to handle (I would tell them what to buy and sell, and they would do so). Unfortunately, I burned my fingers badly. At first I made a return of around 7%, but soon I landed up losing more than 20% of the original capital. I felt extremely bad and defeated.
This experience taught me the first and second rule of Warren Buffet, without me knowing who he was -
- Don’t lose money
- Don’t forget rule number 1
Following the experience, I took a break from trading as my Exams were around the corner. Once they were over, I considered giving up the market - but my mother persuaded me not to give up my passion because of one bad experience.
I decided to listen to her, but I began reconsidering my approach to equities.
Until then, I had only traded stocks. I realized that the technical chart told us little about the company and there many other important factors. I also realized that there would be a higher chance of making consistent returns in the market if I invested in stocks using technofunda analysis instead of trading them using only technical analysis. So, I decided to transition to technofunda investing.
A few books I read on investing are One Up On Wall Street, The Intelligent Investor, Beating The Street How Buffet Does It and Coffee Can Investing. I also took up many free courses on the internet and watched many YouTube videos on investing.
My Current Investment Process
My goal is to make a mainly automated investment framework.
I have developed a python script that scrapes data from screener.in and financial news websites (like economic times), projects future earnings, finds the intrinsic value of a stock using many methods (DCF, Graham Intrinsic Value & EPS Multiple), carries out sentiment analysis on conference call scripts and articles related to sector/stock. This is not the only way I analyze a stock, but one of the ways. I also do manual analysis following/instead of this.
To short list stocks, I use screener.in. I have tweaked and combined a few screens to make one I like. Recently, I have also begun to short list stocks based on their ValuePickr threads (If I find an interesting thread, I take a closer look into the stock). I am working on way to add sentiment analysis of the ValuePickr thread of a stock in the python script I mentioned above.
After selecting a stock, I take a look at its technical chart which helps me decide when to enter.
Position Sizing
I realized that if we provide the same allocation to each stock, there is a lower chance of making exceptional returns. Even though the returns will be good if the right stocks are selected, we can make higher returns if the portfolio is concentrated.
The size of my position depends on many factors:
- The strength of my conviction
- My understanding of the business and company
- The valuation (How cheap a stock is)
My Entry & Exit Process
I enter a stock in 3 legs, and exit in 3 legs as well - unless I believe that the stock price can crash in a very short period of time.
The first and last legs are equal, whilst the second leg is larger. The ratio of the 3 legs is 3:4:3.
My Portfolio
- The
Status
column represents my Accumulation Status. - Currently, I have not mentioned the average price as I am still accumulating the stocks. I will add the Average Prices once I am done accumulating.
- I wont write about each stock here. If anyone wants, I will summarize my thesis but (like @sahil_vi said) I believe that it will be better for each stock to be discussed in its own ValuePickr thread.
My Portfolio Goals
I aim for a CAGR of around 35-40%. I know it sounds very ambitious, but I believe that it is possible.
Credits
The Format of this post has been inspired by @sahil_vi, a great investor who I have learned a lot from.
A few other prominent investors from whom I have learned a lot and am thankful to include @Tar, @Donald, @ayushmit, @pratyushmittal, @Worldlywiseinvestors, kalpesh4430 and @Kumar_manas. Without these
Updates
I will add updates about my portfolio here. If there are any changes in allocation, I will mention it here and change my portfolio table above.
- 13/03/2022 : Post released
- 14/03/2022 : Added Ishmohit Sir to credits as I previously did not know that he had a ValuePickr account.