It gives me imense satisfaction today to be putting down my portfolio on Valuepick. I have learnt a lot from this forum and its wonderful members, and have attempted to add value to the forum whenever possible. VP has completely transformed me as an investor, the learning curve has been extremely steep.
The purpose of making this thread is two fold: (1) To receive constructive feedback from many of you which will help me improve my portfolio construction, stock selection and approach to investing, and (2) To create a repository of my thoughts and actions in the markets and learn from them.
Early mistakes in the equity markets
I opened my first demat account in 2017 and started buying small quantities of shares that my broker would recommend. I had no knowledge of the businesses I was buying, apart from the narrative fed to me by my broker, and by CNBC/Moneycontrol. Thankfully, I started a few SIPs in some mutual funds in parallel. Over the next couple of years, my portfolio of stocks did poorly. While some of the stocks I picked did well, many tanked badly. I made all the mistakes that many new comers made in those years, and more! I was so naive that I used to load up on stocks that would fall 50% in the hope of a turnaround, and hold them all the way down. Lost money on YES Bank, HEG, Va Tech Wabag, Texmaco Rail, Glenmark Pharma and a few others.
On the bright side, the size of my portfolio wasn’t very large as not all my money was invested. Besides, the MFs did ok and offset some of the losses. And then covid happened, and my portfolio hit rock bottom, 30% in the red on an aggregate basis. It was about then that I came across Valuepickr and some fresh content on Youtube (some of whom are very popular now ). The level of in-depth research that many people did stoked my curiosity, and I started spending hours (work from home helped!) reading and learning about the businesses that I owned, only to realize by June 2020 that my portfolio was rotten and needed a complete overhaul.
Over the past 15 odd months, I have systematically cleaned my portfolio up. Some of the stocks I held prior to 2020 turned around and I used the bull markey to exit them at better levels, some at great profits, and moved the money to companies that I have studied in depth, understand well and have conviction in. Made a few swing trades too where near term triggers boosted stock prices.
Presently I am fully invested. I own 24 stocks in India which make up 92% of my portfolio. I also have a couple of ETFs on Nasdaq, some gold through ETFs, a very small allocation to crypto and some cash. One common theme across the portfolio is that all companies are from sectors that I believe are experiencing / will experience sustainable medium to long term tailwinds. Some of the companies are defensive deep value (may be considered as value traps by a few) to lend some stability to the portfolio in case of downturns (during which I will sell them and buy growth conviction companies which will have fallen a lot more), many are high growth companies with sustainable cash flows which I expect will compound wealth quickly, and some are turnaround stories where I believe the risk-reward is favourable and potential upside is high when my triggers play out. There are a couple of cyclicals as well in real estate and commodities, which I feel bought close to the bottom of the cycle. I am always near the door on these.
Overall on a base of say 100 rupees that I have put into the markets (counting only fresh money, not reinvested money) since 2017, my PF value today is about 170 rupees . About 50% of the fresh money has come in since July 2020. Given the fact that I made uninformed choices prior to 2020 and was 30% in the red (on invested amount) when covid happened, I feel I’ve done well. Absolute returns from July 2020 have been about 125%.The bull market has been kind ofcourse, and there is always a lot of room for improvement.
Below is my present portfolio:
|Sector||Company / Asset||Buy price||CMP||P/L||% of PF||Brief rationale||Risk perception|
|Conglomerate||Reliance Industries||1928.14||2425.6||25.8%||5.8%||Telecom/Retail/Renewables boom||Low|
|Commodities||Rain Industries||105.35||243.4||131.0%||5.8%||Carbon based inputs for aluminium supercycle||High|
|Real Estate||Sunteck Realty||284.03||384.85||35.5%||5.5%||MMR RE pick up + asset light + strong balance sheet||High|
|FMCG||ITC||199.5||212.65||6.6%||6.1%||Cash like (FD) + FMCG improvement optionality||Low|
|FMCG||Globus Spirits||695.1||1155||66.2%||5.5%||Growing consumer brands + Ethanol policy||Medium|
|Strides Pharma||586.37||596.1||1.7%||5.7%||Growing US generics + biologics CDMO||Medium|
|Neuland Labs||1605.84||1766.8||10.0%||5.1%||Transition to speciality APIs + CMS optionality||Medium|
|Caplin Point Labs||465.38||933.3||100.5%||5.4%||LatAm + Africa branded generics, first mover||Medium|
|Laurus Labs||520.66||656.05||26.0%||2.3%||Integrated APIs + biologics CDMO||Low|
|Kopran||213.72||212.7||-0.5%||1.6%||Niche carbapenems and antibiotics||High|
|Sequent Scientific||233.07||236.15||1.3%||1.1%||Animal pharma companion animal boom||Low|
|Kilpest India||478.47||514.7||7.6%||3.4%||Molecular diagnistic boom + special situation||High|
|Financials||Apollo Finvest||516.7||572.05||10.7%||4.5%||Fintech revolution / Like an angel investment||High|
|Financials||Federal Bank||78.09||82.4||5.5%||4.7%||Well capitalized and super cheap + digital push||Low|
|Financials||IDFC||44.11||54.75||24.1%||3.3%||Special situation + bullish on IDFC First||High|
|Financials||IDFC First Bank||42.7||46.9||9.8%||1.6%||Top liability franchise, Assets likely to improve||High|
|Financials||Edelweiss||69.93||81.3||16.3%||2.7%||Stated value unlocking strategy + turnaround||High|
|IT/Digital||Mastek||2445.24||2888.75||18.1%||5.5%||Digital ransformation + huge discount to HM||Medium|
|IT/Digital||Intellect Design Arena||597.94||631.9||5.7%||2.2%||Banking digitization push + operating leverage||Medium|
|IT/Digital||Expleo Solutions||1032.99||1016.25||-1.6%||2.4%||Special situation + cheap||Medium|
|Chemicals||Jubilant Ingrevia||425.87||703.55||65.2%||4.0%||Comodity to speciality + huge doscount to LO||Medium|
|Chemicals||Black Rose Industries||73.96||183.65||148.3%||2.1%||Acrylamide and derivitatives niche||Medium|
|E-commerce||MSTC||267.62||303||13.2%||2.9%||Special situation + cheap + scrappage policy||Medium|
|Music streaming||Tips Industries||1114.53||1261||13.1%||2.4%||Music streaming revolution||Medium|
|International||KWEB (China Internet ETF)||47.98$||51.86$||8.1%||2.3%||Deep value due to near term uncertainty||Medium|
|International||ARK-G||83.86$||83.74$||-0.1%||0.7%||Genomics revolution led by inovators in the US||High|
|Store of value||Gold BEES + SGB||-3.6%||2.5%||Hedge||Low|
|Store of value||BTC, ETH, MATIC, MANA||29.2%||1.0%||Hedge - don’t compltely get it but risk reward high||High|
Risk management and churn
I am happy with churn if I find that something in my thesis is broken, or if valuations look stretched and other more attractive opportunities are available. As a risk management policy, I do remove some money from perceived high risk positions if there are sharp run-ups. For example, I had sold off my entire position in Expleo when it ran up from my buy range of 650 to 1300+ in a month. Re-entered with a smaller position when it pulled back. Have traded portions of Rain, Sunteck, Reliance, Kopran,Caplin, BlackRose from time to time. Recently booked some loss in Neuland and Strides and bought them back a day later, to offset some tax.
Most likely will churn out a few more over the next couple of months. Studying FDC, HCG, RPSG Ventures, Indoco Remedies and a few others presently, and have about 20 odd companies on my core watchlist which I will look to add if valuations become attractive.