Yogi's portfolio for long term (15 years)

Q&A: Questions & Answers Portfolio Q&A
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Hello community,

About me
I have recently joined this community, and my sole intention is to learn. There is so much of information here, sometimes I am overwhelmed but reading this forum has become my favorite to-do in any free time i get from my work/family :slight_smile:
I am living and working (IT guy) in Amsterdam for past few years, do not have much investing experience, have recently gotten into active investing since May 2020. Like any newbee, i think i have ended up making my portfolio too big, and have added many stocks due to FOMO.

Investment Objective
My investment objective is long term (15 years, till 2035) CAGR of at least 20 percent. Since I do like looking at the market quite a number of times during the day, I am willing to take short term opportunistic bets.
May be this is a lame BOD strategy, but I keep accumulating most of what I hold whenever there is at least 5% drop in the price:

  1. Since my last purchase OR
  2. In a single day OR
  3. In a week OR
  4. In a month

I am writing here for a recommendation on my portfolio, how best i can trim this to achieve my objective? Or there is no need to trim looking at my long term objective?

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Regards,
Yogi

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I don’t feel that you have a fat portfolio. As you are investing in Mid + Small caps heavily and having higher allocation in Pharma and Chemical, it make sense to diversify to reduce risk. I hold a diverse portfolio (My Portfolio) for the mentioned reason.

But if you want to trim you can follow this approach to select the stocks.

  1. Rank your holdings by conviction
  2. Come up with some allocation strategy. Something like
    a. Hold no more that N stocks
    b. Top M stocks allocation should be X%
    c. Top O stocks allocation should be Y%
  3. Let’s say I wish to hold 15 stocks in your portfolio
    a. I would allocate ~50% in my top 5 holdings
    b. I would allocate ~30% in my next 5 holdings
    c. I would allocate ~20% in my bottom 5 holdings
    d. Top 5 would have high conviction bets, Bottom 5 would have watchlist kind of stocks where I would potentially build higher positions in future depending on future earnings.
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I think most of the investments have statement like “Good result in Q1” but don’t trust on one quarter result to make your long term investment. Also don’t believe on Sector tailwinds to stay invested for a horizon of 15 years. Tailwinds don’t last long.

Titan is not at an expensive valuation it’s debt free and it looks expensive due to covid. My suggestion is to stay invested (EPS dropped from 16.91 to 9.51).

Go for a more concentrated portfolio with 10 to 16 stocks so that you can monitor regularly

You have to reconsider your portfolio.

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Thank you @sivaramtvl and @casperkamal for taking out time to read and respond. I am working on the above suggestions, and also reading a lot these days, and hopefully that will help me better my allocation.

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Here is my latest portfolio, and also the updated rationale against each. Have sold off a few when compared to first post. ave decided to keep a diversified portfolio of 18-19 stocks until i learn more in this journey and become confident enough to have a concentrated portfolio…

Company Live Price Inv.Price Portfolio Weight Rationale Current action plan
Alembic Pharma 973.4 933 10.84% One of the few good pharma companies that is still selling at reasonable valuation. Conviction is high because of valuation, clean management record, good pipeline of ANDA approvals. Not buying more due to high weightage already. Hold
Mindtree 1,319.30 1,177 7.69% Has been come out with good results quarter after quarter, I am aware they are highly dependent on just one client so wil be on my toes monitoring it going forward. Sinc they belong to a reputed group, I don’t see a huge risk. BOD
Alkyl Amines Chem 3,355.95 2,583 7.68% Niche business, not buying more due to valudation, but have hih conviction because of low competition. Even if prices collapse due to Acetonitrile price correction, I will still hold it and even buy more. Would be monitoring how much management comes true on their talk of topline growth. Hold
Dixon Technologies 10,092.00 6,050 6.93% With a lot goping for them currently in terms of PLI and good results, I will continue to stay invested. Not buying more due to high valuation. Will be monitoring their margin expansion. Hold
Ajanta Pharma 1,534.65 1,516 6.71% Consistently good results, low valuation, clean management, pledge reducing on a frequent basis. Not buying more due to high weightage already. Hold
Deepak Nitrite 801.55 637 6.67% High conviction due to good results, and clean management. Have not come across any reason or commentary to sell this. BOD
Muthoot Finance 1,169.65 1,189 6.33% My proxy gold holding. I belive when gold prices increase, so do the performance of this company. Besides they have not disappointed with the results either. BOD
Tata Consumer 515.6 474 5.80% They have gone from strength to strength in last few years, do belive them (TATA after all) when they say they want to be a future FMCG, fair valuation as of today, good results consistently BOD
Escorts 1,406.30 1,138 5.56% Agri play, good export business, will have a good market in India too considering less and less hands are helping with agriculture, obviously need for tractors and equipments will increase. I do realize its cyclical in nature but I guess cycles play out for good in the long run. BOD
Dhanuka Agritech 713.25 681 5.49% Future mid cap, good management, consistently good results, fair valuation, since its small cap will keep the allocation around 5 percent and not more. BOD
Ipca Laboratories 2,062.45 2,028 4.93% Still haven’t built enough conviction, sorry that I don’t have any rationale on this except that it has very attractive valuation considering the past results. Hold
Nucleus Soft. 547.1 541 4.89% A product based IT company, a product that is well in demand and sold across geographies, consistently good results. Since its small cap, will not increase its allocation beyond 5 percent ever. BOD
HDFC Bank 1,374.35 1,074 4.00% Steady compounder, high conviction that as India grows, HDFC bank will have a major role to play too BOD
Avanti Feeds 491.05 503 3.98% Leader in their segment, clean management, consistent performer, do realize its cyclical in nature but like I said in the long term will play out well BOD
SBI Life Insurance 846.75 791 3.52% I live in Europe and I see how important insurance is considered, SBI is my bet in India on insurance due to their large distribution network (SBI branches), and very good results quarter on quarter BOD
Balkrishna Inds 1,596.00 1,302 3.32% Stalwart, may become slow grower but will be a steady compounder I believe, scope of growth in India, while passenger vehicles are luxury this ocmpany caters to non-assenger vehicles and that makes it less cyclical. No wonder it comes out with good results when the rest of auto sector is struggling. BOD
InfoBeans Tech. 124.6 132 3.05% They are very good at what they do in IT, being the well recognized partner for Service Now. I have seen first hand how much ServiceNow is used by the IT arms of any business, and lately when everybody is going cloud and agile, the demand for their services will only increase in my opinion. However they are really small and so i will keep my exposure limited to 3% of the portfolio. Second risk is what they do can also be done by others, no MOAT except their skill. Hold
ChamanLal Setia Exp. 81.85 93 2.21% Honestly speaking when I purchased this I didn’t do any research, it was purely on the basis of recommendation from someone else. Till today I am not fully convinced, so this holding will stay only as long as their earning don’t show any deterioration. Hold
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Can you give more insights on insurance business in Europe? Do you see this importance for Life or General insurance there? How is the product mix for Life insurance and what are government policies? Which are top 3 insurance firms you see doing well there as a consumer? Thanks

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Insurance is a big contributor to Netherlands’ GDP. Its a big industry. However most of the revenue is from mandatory insurances - health, car etc and less from life insurance which is not mandatory. Yet from what i know (throgh a Dutch colleague) is that a good percentage of people do buy it, especially when they buy a house. For a country as small as the state of Maharasthra, there are around 150 players (across insurance types), dont know who leads the race but we expats mainly deal with providers that communicate in English :slight_smile:

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