vivek, what are the technical rules you follow for selling a stock? can you share those basic technical rules. also do you re-enter those stocks you sold for technical reasons?
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Very insightful, Can you please elaborate on the concentration framework for wealth creation and when to exit or reduce concentration ?
In the initial phase of investing when one needs to create wealth one can go for big bets & concentrated investing.I know one VPer who in 2010-11 put big bet of putting his big chunk of PF in one stock ie Ajanta Pharma @40-100 Rs .A royal sum of almost 3 Crore and he exited at 4000 odd in few years time.
This needs guts & supreme confidence in oneself and great tech n fundamental ability. He gained financial independence with this one big step.
Once wealth is made one should increase no of stocks to preserve the same.
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Besides promoter quality selecting sector with tailwinds most important once again best exemplified by Pharma.
Allocation too most important.
Top Holding Laurus Lab and Suven pharma bought after switching from financials in June qtr helping PF also reach ATH.
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Thanks for sharing. With initial royal capital of 3 Crā¦the gentleman was already financial independent as per many standards 
Indeed, lots of confidence to put entire sum of portfolio in 1 company. Hard to replicate and follow as temperament drives such decisions. There are many things about him that you and we may not knowā¦for eg. he may have excellent exposure to pharma and key people in the industry? The network matters in such cases, we cannot bet full portfolio to create wealth in isolation is what I feelā¦pls correct me if wrong. Thanks
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The guy is still in 30s age group. Valuation of Ajanta at 4-5 pe after consistent results over last 4-5 years. so margin of safety was big. Hence one cud take big bet as per ones own appetite.But that was another era.
Without such big bets one cant change ones destiny.
One has to have supreme self confidence on self as well one own tech n fundamental analysis skills also. TA helped him to exit at almost peak as well.
Equity investing is really rewarding in medium to long term.
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Thanks for sharing this @Vivek_6954. Insightful.
Apart from pharma , which other sector you feel is flourishing and is on crossover to momentum mode like you felt for pharma in june ? Thanks
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I think unlike the laurus labs and aarti drugs, the story of suven pharma is still to startā¦considering it has margins as high as 40% plus and still valued at 15 times PE it can easily double with PE expansion itself to 30 levels and then additional EPS growth will contribute to more growth in priceā¦I think along with Divis and Syngene it is one of the big players in the custom API spaceā¦invested and expecting more growth in futureā¦
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I believe if we can invest around 10 lakhs also in a basket of specialty chemicals and pharma API/CRAMS/CDMO space it can easily become 10 times in next 10 years if not moreā¦thats my current planā¦entered into API pharma space in this year, but invested in speciality chemicals in last 2 years and money has grown 2.5-3 times in it in that time frameā¦deepak nitrite and aarti industries contributed a lot in the compoundingā¦
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I agree with your observation. Suven pharma valuations still reasonable vs Divis & Syngene and have much better margins & ROCE . CDMO stocks are the current fancied stocks specially after its strong endorsement by celebrety Tweeples .
Plus we have one of the most ethical hardworking promoter with a scientific bent of mind. he came with IPO in 1995 & coined the term CRAMs after spending nearly 15 years in US including studies and returned back to India. Crams was always a cash generation business & all of it went to NCE discovery program of now separate SLSā¦This i believe gave him a big edge while gaining new business from clients abroad already in NCE business.
CDMO business is a multi year business with strong stability and one can safely stay invested for next 10 years. If promoter decides on exiting the business it can turn into a big lottery for retail investors as valns cud be on higher side aka Sequent Scientific & JB Chemical
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Suven Pharma is at 31PE as per screener. So looks like rerating has already happened here.
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Can you please share how did filtered down to select just 2 companies Laurus Lab and Suven Pharma? Also, how you decided on allocation % for both of them. TIA.
A good interview.
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Another good one.
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as already told several times in the thread bet on promoter n sector
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if possible would you please share the name ? i dont know it make sense or not but very helpful for new investors.thanks vivek sir .
Whose name are you talking about? How does it matter if itās a VPer? Important part is the learning that even a salaried guy can become financial independent through equity route. And Sep 2020 is definitely not 2010 when valuations were very cheap and Margin of safety much higher. Now one can buy minimum allocation qty and keep averaging up as company executes and comes with good nos. Pharma Chemical Agrochem IT seem to better sectors as business remains comparatively unimpacted by Covid & some older triggers for growth continue.
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Besides Pharma Chemical n ancillaries having pick n axle role in it,agrochem ,IT ,Rural theme which have largely remain unaffected from Covid one shud focus upon
At the end its all about numbers . We need to focus on nos .Hope stories wont add much value. K shape recovery is on it seems currently & we need to focus on sectors in upward slope of K alphabet.
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X becomes 15 X in 7 days from 13.7 X.
I post it hear more for tracking the progress of PF & key learnings from mistakes I committed .
At times phenomenal returns comes in few days or weeks after stagnating for months and years.
Allocation n investing in sector with tailwinds helping.
But diversification also necessary to preserve wealth. No allocation more then 15% in one stock & top 7- 8 stocks nearly 75%.
One can keep investing in IPOs OFS Buyback delisting arbitrage for taking care of day to day n monthly expenses besides dividends n intt income from bonds or other fixed income.
Dont hv much RE investment except for one big investment made in RE in 2012 where price to sell in 2020 is less then the price bought in 2012 . EMI of 60 K & rental of 13 K after maintenance. Stay in my own house so this RE was made for investment purpose.
Imagine if I had invested this big amount in equity itself.No pint investing in India in RE until rental yield is more then the intt u pay like in West. VPers learn from my mistake of 2nd investment in RE.
Now 110% invested .
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It is really painful investment where prices hasnāt appreciated in 8 years.
The pain get multifold specially when other investment has turned 15X in similar timeframe.
In current mindset, its true that you would like to forget RE investment as a bad dream but during these years (at any point)ā¦ was there a condition when RE had better returns than equity investment.