Help needed from felow investors from this forum to review my core portfolio

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Jameel, Nov 3, 2015.

  1. Jameel

    Jameel New Member

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    Guys, this is my first post in the forum. I am a long term value investor. Lately I have been building my core portfolio lately. I need fellow investors/forum members to comment on the stock selection within the portfolio. If you think that some stock selection is not right, it will be great if you can suggest a replacement.

    Below are the list of stocks in my portfolio. Currently I am holding 1-17 stocks. I am planning to add the remaining ones (18-34). Before, I jot down my stock list, let me first be very clear that, about the rational behind the stock selections, my expectations with the portfolio and my investment horizon.

    My rationale behind the stock selection are :
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    (a) I believe in top quality business with great management. Strong balance sheets, low to manageable debt levels, strong cashflows etc...
    (b) My investment horizon is 10+ years. I am a long term investor and usually don't get carried away with short term gains.
    (c) I know that quite a few stocks mentioned below are pretty aggressively valued, my approach towards them is to do staggered buying. Every meaningful decline in such stock is buy for me.
    (d) My expectation with this portfolio is to get 20% + CAGR return over a long period of time. I am not expecting multibagger kind of return with this portfolio. Yes, I want to be realistic here. Although few stocks below has been multibagger for me, force motors is one such stock. I have been holding it since the time it used to trade at 560 levels. I am still very bullish on it. Once this portfolio is built (which by itself needs a lot of dedication and effort), I will shift my focus towards growing hungry companies/multibagger kinda things. But for now, I am looking for consistency.
    (e) I always do an staggered buy regardless of the business. For proven businesses (only blue chips) , I don't mind doing downward averaging (I know, people may disagree with this approach, but I believe in it, and still do it) . This brings down the overall cost substantially. For small business/growth stocks, I take an approach of upward averaging. For example, I would put only 25-30% of the money in some XYZ growth stock. I will see its performance QoQ/YoY. Based on that analysis, I would do upward averaging, if it is really growing as per my expectations. Doing so, also gives me a level of confidence that, I am not blindly putting my money into a business which is not worth to be a part of.

    Finally below are the list of stocks.....

    1 Asian Paints
    2 ICICI Bank
    3 Axis Bank
    4 Force Motors
    5 Gebriel India
    6 Lupin
    7 Maruti Suzuki
    8 Sun Pharma
    9 Tata Motors
    10 Motherson Sumi
    11 HDFC Bank
    12 HCL Technologies
    13 Colgate
    14 DHFL
    15 ITC
    16 HDFC
    17 Yes Bank
    18 L&T
    20 HUL
    21 Nestle
    22 TCS
    23 Hero Moto Corp
    24 Dr. Reddy Labs
    25 Bosch
    26 Dabur India
    27 Eicher Motors
    28 Britannia
    29 Marico
    30 Page Industries
    31 Procter & Gamble Hygiene & Health Care
    32 Infosys
    33 Cipla
    34 Aurobindo Pharma

    Appreciate your valuable time for going through my looong post :-(

    Thanks
    Jameel
     
  2. Sonia

    Sonia Member

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    Just wanted to share few points which may help you on stocks 18-34 for financial analysis.

    FIN_analysis.JPG
     
    Last edited: Nov 7, 2015
  3. stockWisdom

    stockWisdom Member

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    Is it an individual's portfolio or a Mutual Fund portfolio!!
    If your holding period is 10 years, then exclude banks, Tech companies and Auto companies. Cyclical business is not for that long term.
    Hold only Pharma and FMCG large caps.
    Buy quality Mid and Small caps for long term holding, not large or giant caps.
    Avoid multiple stocks from same sector.(Are you planning to build a Banking Sector MF?? 4 Bank stocks!!)
     
  4. kharb

    kharb Well-Known Member

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    Good fundamentaly strong stocks and don't feel disturbed by comments of young and aggressive investers .Let them see one bear market jurk,they may align with your thinking.Different small and mid cap stocks are hero of diffrent market cycle and after that 90% goes out of favour.I have seen almost every small or mid cap being called future gem at one time other,but 99% stays what they are.But add one more stock of Cement ,Ultratech Cement or Heidelberg cement.If I were U,I may have not added Gabriel and Page. U can remain invested in all top 6 private sector banks all the time as basket investment and still consider that six Stocks as two stocks for counting purpose ,as three of them are corporate focus and three are reatil focus.But your total investment in banking should be aprox 20% or near to banking weightage in sensex or nifty.No harm in starting with big list,but please start removing non performers after three years and get down to 20 performing blue chips in five years. After that U can add new blue chip by identifying and removing some non performer, sticking to 20.I am following more or less the same method.For taking small mid cap exposure I am invested in four top class small mid cap funds.Good luck choosing boring but sure ,safe long journey.My thumbs up to your thinking.
     
    Last edited: Nov 4, 2015
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  5. Jameel

    Jameel New Member

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    Thanks everyone for your valuable suggestions.

    @Sonia - Thanks for sharing your stock filtration criteria :) I do follow few of them during my analysis.

    @stockWisdom - Well, this is not a mutual fund portfolio or a banking portfolio. I am not just looking for diversification across sectors, but within too, and that is the reason why you might see multiple businesses from the same sector within my portfolio. This approach so far as given me decent protection of my overall portfolio may be due to company specific headwinds which always exists and unavoidable. E.g. recent volkswagen issue with Motherson sumi, Nestle's maggi issue. I am sure, you would agree with me with the fact that, these businesses (MSSL and/or Nestle) are leaders in their respective sectors, but due to recent issues, their stock prices had cracked. This is where I am trying to mitigate the risk of betting on one single specific business.

    @kharb - Good to know that we both, to an extent, share similar investment approach. I will definitely evaluate cement as a sector and specific cement stocks which you have mentioned. I will also look towards reducing the portfolio size. Let me see, which ones I can knock out. Thank you so much for all your valuable suggestions.

    Thanks
    Jameel
     
  6. RAMA MURTHY SASTRY CHALLA

    RAMA MURTHY SASTRY CHALLA Well-Known Member

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    @Jameel
    portfolio size reduce to below 20 , and for sector maximum 3 stocks , and avoid Cyclical Stocks ...
    in common investors psychology every stock is attractive and he wants to hold that, main problem is that
    each sector select good stocks one or two only remaining leave it sir... after investing review after 2 quarters
    and make changes , dont change portfolio every day or frequently
     
    Sonia likes this.
  7. w4wealth

    w4wealth Well-Known Member

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    Add some midcaps to portfolio like LIC HF. MCX, DCB, Talwalkars, adlabs
     
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