Need your valuable advice on my portfolio

Rahul@RJ · May 10, 2015

Hello members,

I am a new investor. I have been sitting at sidelines just watching for past one-two year. I have started investing in the recent fall. I am a long term investor with no target price for my holdings. Please have a look at my portfolio which have the equal allocation to each stock currently. I would add each stock on every 10% dip from CMP (in case it happens).

Atul Auto
DCB Bank
Dewan Housing
Federal Bank
Gati
Granules India
HSIL
ICICI Bank
Ipca Labs
KPIT Tech
Motherson Sumi
PTC India Fin
Shriram Trans
Sun Pharma
Va Tech Wabag

Apart from these, I am also thinking on following stocks to add:

Allcargo Logistics
Amtek Auto
Lumax Auto Technologies
MCX India
Mindtree
Pennar Industries
Repco Home
Tree House

My stock selection is mainly influenced by model portfolios and stock recommendation by industry stalwarts. I still follow these companies regularly in whatever way i can. Your suggestions and remarks would be much appreciated.

Regards,
Rahul

alchemist · May 11, 2015

The following are my thoughts on your portfolio:

1) If you had given % of stock split up along with pickup price, and rationale for stock pickup, it would have given a better picture of your portfolio

2) Atul Auto is a great pick with zero debt. When you have this stock, i would suggest consolidating in this stock than accumulating Amtek Auto which has very high levels

3) More than IPCA, i would consider more of Granules or Suven Life Sciences and JB Chemicals - Companies which are in the cusp of a growth bloom and relatively cleaner financial book

4) What about some bigger IT blue chips when their price has dipped - TCS, HCL Tech, Infy instead of a Mind Tree or KPIT.

5. My idea of a balanced portfolio is not only a spread coverage of various sectors but also a mix of true blue - blue chip stocks which are sound and stable (60 - 70%) and clean growth stocks (small or midcap) at 30%. This way your capital is always protected by NIFTY large caps

6. Lumax Auto Tech, Atul Auto, PTC India Financials, Motherson Sumi, Granules are good stocks. However the
greatness of the pick ups depend on the price at which they were picked up.

7. Financials has too many small caps. Would consider Axis bank or Yes Bank or Indus Ind or more of ICICI on dips

8. How many logistics should one have? I would rather pick GATI at this stage than add another one

9. Can consider IDFC when prices dip less thank 160 Rs. It is another stock set to soar once it starts its banking operations

10. Eng India can be considered for a pick up. Good order book, zero debt and price is at record lows

Meenakshi Razdan · May 11, 2015

Rahul@RJ said:

I am a new investor. I have been sitting at sidelines just watching for past one-two year. I have started investing in the recent fall. I am a long term investor with no target price for my holdings. Please have a look at my portfolio which have the equal allocation to each stock currently. I would add each stock on every 10% dip from CMP (in case it happens).
Click to expand...

Well, congratulations. Your strategy makes sense. You have watched the markets rise and then fall. So, the volatility ought not to scare you. Also, your strategy of having a diversified portfolio is a good one. It is also a good strategy that you have funds in hand and are prepared to invest whenever there is a sharp dip.

The important thing to remember is not to get carried away with success or to get bogged down by failures. Instead, it is better to be disciplined and to keep investing a fixed sum of money in periodic intervals, irrespective of where the markets are.

I would not obsess so much about whether 'A' stock is better than 'B' stock. This kind of hair-splitting is not useful. So long as the stock meets the basic characteristics of a good investment, one should be prepared to stick with it for the long run without worrying unnecessarily whether another stock would have given a slightly better return.

Rahul@RJ said:

My stock selection is mainly influenced by model portfolios and stock recommendation by industry stalwarts. I still follow these companies regularly in whatever way i can. Your suggestions and remarks would be much appreciated.
Click to expand...

In following stalwarts, one must be careful to ensure that one is also in tune with their philosophy. For instance, there are some experts who claim that one should never buy blue chips or proven stocks but should instead buy stocks which are not in favour with investors. There are other experts who only buy stocks that are hitting 52-week highs in the belief that such stocks will continue to do well. There are other experts who only buy stocks which are at 52 week lows and so on.

So, you have to sit down and carefully understand which strategy appeals to you the most. This is important because if things don't go off as planned, one can get terribly frustrated if there is no conviction in the strategy or the stock pick.

Lastly, I feel it is important to develop one's own conviction in the stock. The best way to do that is to read up all the research reports available and then to sum up in one's own words what the potential and risk factors of the stock are. The exercise of penning down your thoughts will help to focus sharply on what you are doing and whether it is the correct thing to do.

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