Dear Yogesh ji,
When is the annual rebalancing of the portfolio scheduled.
Dear Yogesh ji,
When is the annual rebalancing of the portfolio scheduled.
I usually do it after all the annual reports are released. Around Diwali time.
Hi @Yogesh_s, I have been going through your posts and your thought process and its clarity is amazing. Thanks for enabling us all to learn more!
While your portfolio and its picks have been discussed above, what I (and I guess others) would also like to know how you come up with the stock ideas in the first place specifically in the small and mid cap space (as large caps are fairly well covered) for eg say an APL Apollo tubes or Kovai. I guess you must have quantitative screeners (based on ROE etc) but are there any other sources/resources you use to hunt for ideas? For eg following other great investors, blogs, on ground checks within your network etc. Would be very interesting to hear about your idea generation process
Apologies if this has already been asked and answered
Thanks a lot for such a convincing and inspiring strategy.May I solicit your opinion about MOSL in long term context.
MOSL and Edelweis are great companies that are doing really well in the world where more and more accounts are being opened. ICICI Securities just came out with an IPO also and it was not priced great due to all of the issues with Chanda. Days of ICICI are almost over like Merrill Lynch was 20 years ago, since Zerodha and IIFL and Kotak are in the works, but MOSL and Edelweis will remain in vogue since they are great money managers, portfolio creators and also have a good growth model in progress. Best is to hold thru thick and thin since we will get some corrective periods when these brokers will take a sizable hit. Keep 1/5 of your purchase outstanding to buy at that time in the future. KKP Investor
Over the years I have used several methods to find new stock ideas including reading news, IPOs, new listings, magazines, recommendations from friends, stock screeners, MF top holdings etc. However, one method that has consistently worked for me is to quickly scan everything that is available to buy and then bookmark the ones that are worth further digging.
In order to scan all the 3000 odd companies that trade on NSE & BSE quickly , I extract high level financial data from a corporate database which I have subscribed to. It can also be downloaded from screener.in. Once this data is in Excel, I use a set of charts to quickly visualize the important numbers from income statement, balance sheet and cashflow and important ratios for last several years on a single screen. Screenshot below shows how a typical screen looks like
This screen lets me quickly check how the sales have grown over the years, if the sales growth has trickled down to gross profit, operating profit and net profit, how the book value has grown, if the debt is growing, how has the cashflow kept up with cash profits or has the receivables and inventory ate up all the profits. Cashflow analysis help me analyze if the company is able to fund it capex with CFO or it had to go external funding. DuPont analysis quickly gives an idea how efficiently company has utilized its capital and if the high ROE is a result of higher leverage or higher ROA. I can also check if there any structural change in its asset turnover vs operating margin trade-off. Finally, the market cap chart (on the bottom right corner) shows how market has responded to the developing story.
If a picture is worth thousand words, a chart is worth thousand numbers. 40 charts on this screen tell the story of a company as it unfolded over the last decade. It literally takes me just a few seconds to reject a bad company. I cycle through all the companies in the database either by alphabetical order or by market cap. Sometimes, I end up rejecting few good ones too, but I am OK with that. Within 2 to 3 weeks I am able to scan all the companies in my database. I go thorough this exercise at least once a year.
Once I go through charts of several hundred companies, a good company will quickly stand out even if it does not meet all the characteristics of a good company. Your mind gets trained in identifying patterns of a good company. A visual image of a company based on its numbers is far more convincing that some qualitative factors like visionary management or key shareholders. This method also give me an assurance that I have looked at all the available options before making a choice. A stock screener on the other hand makes you wonder if a good company has been wrongly filtered out only to discover it later after the price has ran away.
Normally I bookmark about 200 to 300 companies that stand out for further study. Usually, only about 20 to 30 companies are replaced each year. Rest of them remain the same. Out of these, based on fundamentals of the company, I create a shortlist of 20 largecaps, 30 midcaps, 50 smallcaps and 10 SMEs for further analysis. Out of these 110 companies, I further narrow my focus to 50 and then 20 based on valuation. After that its my gut feel. I end up having about 8 companies in my portfolio from this 20.
This process is similar to how we buy a car or a mobile phone. You start with everything that is out there, make a shortlist, then go for a test drive before making final choice.
Thanks for he prompt and such a detailed response
Thanks for putting such a detailed and pictorial method to look for the stocks, can you please share how can I make all these charts in excel sorry for asking such a naive question as I’ve very less exposure to the excel.
Just adding to the above question, if I may - am guessing you would be using macros to make the charts once you have all downlaoded all the data into excel as there would be around 120k charts (3k*40) or do these come as part of the standard template in excel from the database
Thanks a lot for the detailed reply @Yogesh_s. Can you please guide the process to get this data for all the companies in one shot from screener.in.
Such a displined approach need patience and great deals of experience.I have strong belief that acquiring knowledge takes a great amount of man hours but after learning make in to use and sharing knowledge is the best part thanks
Could you please share the data source that you are using .Analysis is based on wrong data may leads to various biases and ultimately you enter in the right company at wrong times or missed some excellent companies even sometimes it happen you choose wrong company.
can I ask you to share your Exiting checklist if any from a stock thanks a lot .Your journey is motivated me and I am sure others also .It help to sharpen the tools thanks again
I am planning to have below portfolio in long term along with expected price. I will not wait for below price to come. Instead I will buy these stocks as soon as they are 25-30% down from current price.
Bharat Electronics - 100-120
Exide Industries - 100-120
Amaraja Batteries - 400
Maruti Suzuki - 5000
M&M - 450
ITC - 120
HDFC Bank and/or ICICI Bank - 1200/150
Yes Bank - 250
HDFC - 1200
Jindal Steel and Power - Already below book value
Asian Paints - 500
Kajaria ceramics - 250
Eicher motors - 12000
Escorts - 400
Apart from these, I am thinking of small cap like Deep Industries, Nitin spinners, Kitex garment. Currently I have allocated 25% of my planned invetsment. I am waiting for some stock correction(25-30%) so that I can allocate 25-30% more to my portfolio. My horizon is long term(5-10 years or more) depending on how business perform
Presuming that u hv given prices on right side, it seems difficult such a price level would come.u HV to b realistic
You are right…Most of them are nifty components…If these prices comes true then nifty will be somewhere in 6 to 7k range!
I will not for exact price to come. e.g. I already started buying Bharat electronics @167(average price) , ITC(250) etc. My plan is to buy more of these shares on dip. But is there any suggestion on portfolio?
Thanks for sharing such a good method.
Amazing peice of work.40 charts in which nothing can be missed out.which site you have subscribed for data.is it possible for you to share the Excel sheet.
@yogesh @hitesh while going thru old conversation of 2012 and 2013, I find some of he learned members had identified potential multi baggers and members must HV definitely benefited from those deliberations.The year 2018 is going to b a tough year to identify those kind of stocks by most of us except a few of u, who have been bestowed upon an excellent skill.
May I suggest that we start a discussion afresh inviting views on future potential stocks along with the justification and analysis of Q4results.I m of the opinion that it would be highly rewarding for the members, would raise the level/quality of discussion on the forum.
Guys, purpose of my previous post was to present an approach that use charts instead of tables to quickly analyze a large set of numbers. You are welcome to comment on this approach and suggest improvements. Underlying data can be sourced from screener.in or from annual reports of companies. This is all public data anyway. I use a corporate database because it saves me some time but you will appreciate that licencing agreement will prevent me from freely sharing this data.
There are companies that provide data for a fee e.g. CMIE Prowess, Capitaline and ACE Equity etc.
Disclosure: Not a buy or a sell recommendation. Strictly for discussion purpose only.
Thanks for sharing valuable information.