Could you also explain the rationale behind your stock picks. If not individuals - maybe just the sectors that you are invested in.
Honestly have not done a sector-wise pick, more an individual pick. The stocks picked are those with good financials, low valuations, good management, reasonable transparency and some idea about the attractiveness and growth of sector. Also tend to classify stocks into RGBs - Risky, Growth and BlueChips. Overall not a scientific approach but more of a checklist approach.
Blue-chips (40 -45%): Stocks that parents love and willing to hold them for long long time. Have accumulated them steadily and continue to do so. Axis (one of the best banks + young and hungry), Lupin + DRL (best perfoming and managed cos in India), Infosys (Valuation gap vs TCS + new leadership, but a lil nervous of performance), L&T (bluest of blue), SBI (a lil mistake IMHO - but have persisted and will accumulate when valuations are right)
Growth (30 - 35%): Really strong performers in their individual spaces. Good business models and financials. Aurobindo (based on ICICI Direct recommendation), Canfin + LIC HFC (thanks to Hitesh Patel), DCB Bank (a customer and liked the experience), Sintex (issues are well behind, got irrationally hammered and even now valuations are cheap), PTC (valuations + NaMo effect), RS Software (payment systems are the way to go!!) and Gulshan (Sorbitol and Artifical sweeteners will grow in calorie conscious world)
Risky Bets (20 - 25%): High risk and hopefully high reward bets. Have started adding more into this bucket - @30 yrs willing to take some risks. Manapurram (A PMSy stock - no one knows what it will do next - but the business model is strong and will continue), PC Jewellers (visitied a showroom and liked the experience + low valuations), Polyplex (Honestly a value-picks story) and India toners (good business and products (checked with my local computer walla) + PE of 4!!) and Subex (my BIGGEST mistake - have almost got rid of all shares - product seems good but company struggling big time)
Hope this is not too long and boring an answer!!
Just wanted to check if anyone had any ideas on how to structure my portfolio? Specifically recommendations on trimming the portfolio.
Varun - all I would say is, that for the “risky” bets, its all the more important to take a bet on management. So for example in the case of Indian Toners, whose business I cant claim to know much about, I just looked it up and it looks very interesteing prima facie. But then, a few red flags may need to be answered before taking a significant plunge.
a) Their 51% owned subsidiary is doing very well and operates at much higher margins than the parent. But the balance 49% is owned directly by the promoters - red flag as why is this not fully owned by the Company?
b) The same subsidiary pays out dividends and so the promoters get good cash flow. But the listco I dont think pays out any dividends
Now the above are just first look comments from the annual report, and maybe there is a good explanation, but nonetheless, with mid caps its important to know that investor interests and the promoters interests are aligned.
I would just suggest ensuring that the “smell test” is passed by all your investee companies - a good place to start is the annual reports for such information.
Sorry I asked a question and didnt revisit the thread.
Could you please post your updated portfolio and I would try to apply my limited knowledge.
Thanks… My portfolio remains more or less the same.
I dropped RS Software (eventually realized that the under-performance didnt seem to improve and the governance issues started to become more evident) and added AMBIKA Cotton. Rest remains as it is.