Looks like his last post on valuepickr was in 2019 … it looks like he’s not active here
Yogesh_s,
Any Particular time for this rebalancing?
Would you share your current portfolio holdings?
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Hi amit…i read about your investment in index stocks as against index investing. You are sure ahead of time. You wrote that in 2017 and now in 2022 i thought about it. What i have done is , i shortlisted 12 stocks out of Nifty 50 stocks, excluding those stocks which are cyclical, PSU, high debt like Adani etc. Then selected 10 stocks from Nifty Next 50 on similar criteria. Franklyi could find in total 22 stocks out of these nifty 100 stocks worthwhile to invest. Then using soic course and valuepickr i shortlisted 8 stocks with high growth and from midcap category. So in total i constituted 30 stocks index of my own. Now going forward,iwould be tracking those 8 stocks in more depth, while 22 stocks i will be just listening to concalls and management interviews to get the bigger picture and overall direction of the company. What are your views about this and also if possible if you could provide your video or audio talk or transcript in mumbai VP meeting that you mentioned…
@Yogesh_s . As you have mentioned, about annual reshuffling…what i intend to do is …keep invested till the time business structure doesn’t get violated or may be the stock gets thrown out of nifty 50 or Nifty Next 50…then i will also sell…but i would require your view on this aswe know, Yes bank problem happened in i think 2018 and recently it was thrown out of nifty next 50…so it took them 4 years to act on it. In your 10 stocks blue chip in first post you have included yes bank as enterprising stock. And you were writing this in 2017and we know what happened to yes bank…so to avoid such shocks in future ,even in 10 stock bluechip , what precautions we can take?
And one elementRy question…if the objective is to beat index and sleep peacefully then why just 10 bluechip.? Why not 30??? Kindly guide
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What is your objective here? Is this your only stock PF or a satellite kind of PF? To listen to 22 con calls and interviews is not a small thing, so I am not sure if it is worth the effort. What I can tell you is that, create a checklist, a framework, using which you can filter these 22 and bring down the total potential stocks to 15 or so.
I am of the opinion that, depending on the objective, we can choose the path, and direction. If I want to beat inflation over the long term, index investing is enough, but if I want to create serious wealth, I need to be good at a few things, I may even need to learn code, I may even need to look at derivatives. So what is the objective here?
On a side note, Yogesh has been inactive for a few years now, looks like you did not know this.
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This is my only stock PF . Nothing satellites kind. My portfolio is actually 30 stocks…out of that 22 stocks are out of nifty 100. Frankly listening to even 30 stocks means 30 hours of work as 1 hour each call. Mostly during my morning walk of 1 hour , i listen to these. And also this is once a quarter. Some companies like abbott india or alkyl amines , do concalls once in six months, not even quarterly. Also i watch management interviews on BQ Prime. Not all management give interviews…Also thanks for your suggestion of 15 stocks but if i select 2 companies per sector and select 10-12 sectors for diversification yhen automatically tally goes to 25 to 30 stocks and if i reduce it then some sectors will be left out. Kindly guide
I am in position to guide, as my little knowledge and experience are insufficient. I can share my thoughts though, as always.
Why do we want to invest in so many sectors in the first place? Do we want to invest in a few good companies irrespective of the sectors they are present in, young or old, mid or small, or do we want to spread our wings covering 10 sectors?
What are we trying to achieve here, are we looking at compounding, or stable returns, or low probability of capital loss etc? No overlapping between companies is one thing and diversification for the sake of diversification is another, because if sector rotation happens, the part of allotment to some sectors may not yield any returns for an extended period of time, unless they pay good dividend. I have read this comment that investors sometimes rush to a sector, a stock when other sectors don’t perform, so that sector or that stock reaches high valuations. One can choose diversification if the capital is large though.
Also if you can allot time, I guess the top down approach can be looked at, find a sector that interests you, learn about it and choose stocks from the sector. I think most of the investors in VP follow a bottom up approach, although they read about the entire sector to have a better understanding.
What we want from the PF, our objective, drives everything else I guess. If we want compounding then we have to look for and focus on the sectors where there is momentum, if we want stability and are okay with lesser returns then we can look for relatively stable sectors, and if capital protection is our priority we can look at decades old companies etc. If we want compounding I guess we cannot afford to be present in many sectors, time wise, mind wise or capital wise.
Or one can have different approaches towards different stocks in the PF, a high PE stock, a value stock, a dividend yield stock etc can present in the PF.
So as long as we are clear about what we are expecting, there are many ways we can go about it, so many models to choose from, so many ways to build.
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I would have to agree with Chaitanya.
First we decide the end goal. And reverse fit the strategy to fulfill it.
I shifted from the discussed approach. I started out selecting the few good stocks that are really doing all the heavy lifting in Nifty 50. Then I had to rebalance, but had fewer options. So, I had a choice: “Diworsify” or Not.
I chose Not to.
In the process, I took on more risk: My investments are concentrated in few sector, namely Banking, FMCG.
And I am fine with it.
The stocks I hold have great underlying businesses and are growth stocks. I efficiently track them, and its easy since they are widely covered.
I do not have that presentation anymore. It is obsolete.
If you do chose to continue with your strategy of holding 30 stocks, I am super sure that you will do a great job managing them. But, you must have an understanding of the ball park figure of the kind of returns you will make, and the amount of churning. Churning more often than not reduces the returns.
It is likely that we are biased with our own approach, therefore it is always advisable to run our thesis through others.
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My expectation is of moderate returns of 15% CAGR thus beating index by 3% or so. Assuming index returns are at 12%. Capital protection is the top most priority as my 70% networth is into PF excluding the real estate. Broad understanding about choosing prominent sectors is to have good exposure to all the important sectors of the economy thus betting on overall India Growth story for atleast next 2 decades. Not focussing only on those sectors where i have better understanding. I have started my thread