35% XIRR return from 2017-2023
@Buy and hold approach

First time ,i learned how to calculate XIRR and surprised to see it.
It is 35% XIRR (2017-2023) excluding dividend) as on sept 2023 with buy and hold strategy.
(I had sold less than 5% stocks in this period.)

In same time, sensex has given 15.35% and small cap index has given 21.95% xirr return.

This is not show off post
It is only and only for conveying message about favourable outcome of long term investment.I have summerized these from various books and my 6 yrs experience. So please go through this thread.

At present, small cap index is near all time high and my all stocks are
small cap. So portfolio will definately come down to sustainable level over a period of time. I will be satisfied if my portfolio gives return of about 15-18% XIRR over long term.

-Why do people buy and sell stocks so frequently? -Why can’t they just buy a stock and hold it for at least a couple of years? (Most don’t.)
-Why can’t people follow the more time-tested ways to wealth?

Let’s see.

1…PEOPLE GET BORED

=As per Crystpher mayer (author of book 110 baggers) : People get bored holding the same stock for a long time—especially if the stock is not going anywhere.

=People often do dumb things with their portfolio just because they’re bored. They feel they have to do something.

=They see other shiny stocks zipping by them, and they can’t stand it. So they chase whatever is moving and get into trouble.

2…BEHAVIOUR BIAS

=Winning at money is 80 percent behavior and 20 percent head knowledge.
-Dave Ramsey

-Three main bhaviours affecting investment outcome are:Patience, fear and greed.

A…PATIENCE
=Patience is upmost important when stock is going no where.

=As peter lynch said, during its journey, 70% of time stock remains flat and it is just 30% time it makes movement.

So we have to pass this 70% time watching stock going no where to make money

=In ulmost my 70% stocks like carysil, lt foods ,anup eng and many more, i have waited 2-3 yrs before uptrend started
(Contrary to techno- funda investment)

=However , i could not keep patience for Rajoo engineering ,Auro lab, ice make refrigeration and sold them early with loss or marginal profit and missed big opportunities

B…FEAR

= Everyone has brain power to purchase good stock but few have stomach to digest ups and down in stock market.(peter lynch)

=Most small cap stocks go 20-40% down multiple times during its journey.

=So this fear also discourage people from long term investment.

3…HUGE VOLATILITY
(UPS N DOWNS)

=The biggest hurdle to making 100 times your money in a stock—or even just tripling it—may be the ability to stomach the ups and downs and hold on.(Book 100 bagger)

=The problem isn’t only that we’re impatient. It’s that the ride is not
often easy

=Netflix, which has been a 60-bagger since 2002, lost 25 percent of its value in a single day—four times! On its worst day, it fell 41 percent. And there was a four-month stretch where it dropped 80 percent

= Apple from its IPO in 1980 through 2012 was a 225-bagger.
But those who held on had to suffer through a peak-to-trough loss of 80
percent—twice!

4…ENTERTAINING V/S BORING

=…People feel short term investment/trading as entertaining while long term investment as boring

=George Soros Quote: “If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring

5…PEOPLE CHASE RETURNS
(From book 100 baggers)

=Many people compare return with others and with index every monthly or yearly .Once they dont gain good return ,they try to reshuffle their portfolio.

=There really isn’t anything intelligent to say about returns over months or year

=Besides, who cares about one year?
We have to play the long game.

=There are approaches and investors who have beaten the market by a solid margin over time. The thing is, they seldom beat the market consistently

=The best investors lag the market 30–40 percent of the time

=None in the superstar investor group always beat the S&P 500 probably because no one thought that was the primary objective.”

=There are ways to beat the market over time. But none of these approaches always beats the market.
…Even the best lag it, and often.

=Keep that in mind before you reshuffle your portfolio after looking at year-end results. Don’t chase returns! And don’t measure yourself against the S&P 500 or any other benchmark. Just focus on trying to buy right and hold on

6…PAST BAD EXPERIENCE

=On many occasions, stock rup up very fast within short time and later fall and then it take longer time than expected or dont recover at all.

=Here long term investor will have disadvantage.Every longterm investor has few stocks which take long time to recover or may not recover at all.

=However, long term investor will also have many stocks in which he/she had kept patience and stocks have multiplied many times over a period of time .So in few stocks, they will miss profit booking but in other stocks, they will have nice return over a period of time. So overall portfolio give nice return.

=E.g.I had bought alkyl amine at Rs 791 ,it made all time high of around 5000 and at present it is around Rs 2100. and still not recovered.

=Same way other companies like paushak ltd , astec ltd had still not recovered after making all time high, may be due to headwinds of chemical sector. But i am still invested in them.

=But other stocks like Lt foods, beta drugs , carysil, kpr mill etc have recovered well. So overall portfolio has given nice return

=So it is all about calculating return of portfolio rather than individual stock.
However, if fundaments deteriorate, it is definate sign of sell

7…INSTATNT GRATIFICATION
(Parag parikh book- Behaviour finanace)

=The emotional part of the brain is linked to short-term rewards, and the logical part to long-term gratification. The former almost always wins.

= Everyone wants everything instantly, but it’s against the natural law. You cannot sow something today and reap tomorrow; a seed which is sown has to go through different seasons and it takes time for it to turn into a full-blown tree.

=When you tend to fall in for instant gratification, every day you look at the market in the hope of making fast money.

…

WHAT LEGENDS SAY?

A…What warren buffet says

=The stock market is a device for transferring money from the impatient to the patient

=“If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.” …

=The most important quality for an investor is temperament, not intellect.”

=Do not take yearly results too seriously. Instead, focus on four- or five-year averages.”

=TIme is the friend of the wonderful company, the enemy of the mediocre.” Wonderful companies grow in the long run because then their prices reflect their underlying value rather than the short term emotions of investors.

=No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

B…What Peter lynch says

=Stocks are relatively predictable over 10 to 20 yrs, not in 2 to 5 yrs,even bluechip also not predictable.Weather stock will go higher or lower in next 2 to 3 yrs, you might as well flip a coin to decide

=Sometimes ,it take years for stock price to catch up company ‘s value and down period lasts so long that investor begins doubt that will ever happen.But value always wins in most cases

=I M USED TO HANG AROUND STOCK WHEN IT IS GOING NO WHERE.
This going nowhere for years is i called EKG OF ROCK which is actually a favourable omen .Whenever i see EKG of rock on charts to which i am already attracted, i take it as strong hit that next move will be up.

C…WHAT PHILIP FISHER SAYS

=Every one knows which stock will rise but no one knows when it will rise(philip fisher)

=In his book Common Stocks and Uncommon Profits, Phil Fisher had a chapter called “When to Sell.”
…If the job has been correctly done when a common stock is purchased, the time to sell it is—almost never.”

=But even Fisher allows three and only three reasons to sell:

A…You’ve made a mistake in original purchase

B…The stock no longer meets your investment criteria(change in fundaments)

C…Better opportunity
=Switching is treacherous .
=Every stock that’s moving looks better than the one you’re thinking of selling. And there are always stocks that are moving.
=Investors too bite on what’s moving and can’t sit on a stock that isn’t going anywhere. They also lose patience with one that is moving against them. This causes them to make a lot of trades and never enjoy truly mammoth returns

=So ,“If you’ve done the job right
and bought a stock only after careful study, then you should be a reluctant seller”.

DONT SELL WHEN

=STOCK IS TOO HIGH OR HIGH PE
=STOCK HAS FALLEN
=STOCK IS GOING NO WEHERE

=Stock price is not indication for reason to sell

=During periods of rapid share price appreciation, stock prices
can reach lofty P/E ratios. This shouldn’t necessarily discourage one from continuing to hold the stock.

TAKE HOME MESSEGE

1…Longterm strategy has one unique advantage: We as investors will not be distracted from our primary profession .We have to focus on 10-25 businesses which we have bought and dont need to study a lot of companies as turnover ratio or switching to other companies is very less.

=This is my personal advise to youngsters. Dont do frequent switching or trading.This habit will distract you from your primary profession.At the end, long term investment will gave same return ,if not better than short term.

=In present era, 3-5 yrs is considered as long term investment.Even in value pickers, most people stay invested for 3-5 yrs in one stock with high churning rate. This high churning will keep you engaged in searching and studying new companies and this will affect your profession.

2…This buy and hold approach is easy to follow by everyone and so it is called “Everyman’s replicable approach”

3…I would suggest , for Long term (5-10 yrs or more) investment, one should have optimum diversification depending on portfolio size in atleast 10-25 companies with equal allocation.(Not overdiversified)
So that, if one or two companies dont perform well, others will cover it and we can go for long term without fear.

4…Common practice of buying and forgetting will not be successful .
=Check your investment thesis at regular interval

5…My sincere request to go through these 2 threads : 100 baggers and one upon wall street before doing serious investment in stock market.

Thanks

(100 baggers-summary)

(One upon wallatreet- summary)

(My portfolio on july 2023)

Portfolio as on july 2023

1…Pix…(Rs 898)…(6.8%)…(April 2022)
2…Carysil…(Rs 247)…(6.8%)…(feb 2021)
3…Astec life … ( rs 1201)…(6.5%)…(dec 2020)
4…Apcotex …(Rs 284) …( 6.5%)…(nov 2019)

5…Pitti eng…(Rs 297)…(5.6%)…(july 2022)
6……Beta drugs(350)….(5.6%)…(aug 2021)
7…Ganesha eco(Rs 593)…(5.6%)…(aug 2021)
8.…Hindware…(Rs 382)…(5.6%)…(feb 2021)
9.…Lt food …( rs 56)…(5.6%)…(march 2019)
10…Racl(Rs 571)…(5.6%)…(feb 2022)
11…Anup…(759)…(5.6%)…(sept 2021)
12…Ion ex ……(rs 117) ……(5.6%)…(feb 2021)

13.…Kei ind…(rs 470.77 )…(4.5%)(jan 2020)
14…Moldtek pack…( 312.50)…(4.5%)…(july 2019).
15……Paushak …(rs 3196)…(4.5%)…(aug 2020)
16…Grauer&weil …(Rs53.06 )…(3.2%)…(July 2018)
17…Stylam(1072)…(3.2%)…(Aug 2021)
18…kpr mill……(rs149)…(2.9%)…(oct 2020)

19…Other stocks…5%

A…Ratnamani …(.rs 865) …(1.0%)…(Feb 2020)
B.…Suven phar …(rs 251.64) …(0.9%)…(Aug 2020)
C.…Ccl products …(rs 270) …(0.9%)…(Feb 2019)
D……Alkyl amine@ (791.56)…( 0.8%)…(June 2020)
E……other stocks… …( 1%)…(2017-2018)

Hi, I haven’t included MF as yet into my portfolio. Will do that maybe in sometime. However I track my MF portfolio separately on Zerodha Coin app. For dividends I am not sure as I started using this since last 1 or 2 months. Will update in case I get or otherwise.

I have started using Value Research services recently.

Here are the portfolio returns (CAGR % pa) for my holding since last 11 years:

1. 11 Years return (21% return on per annum basis since last 11 years)

2. 5 years return (24.6% return on per annum basis since last 5 years)

3. 3 year return (26% return on per annum basis since last 3 years)
   

Big question whether Spicejet is turning the corner…It is rapidly turning its lessors debt into equity including a $100 million Carlyle transaction where the lessor converted at a price of 48 when the share price was in the twenties .Profit is obviously increasing now and will continue as Indian popularity for air travel continues…

However will Spicejet be able to keep costs down enough to maintain profitability ?

IIFL Finance ltd Q2 concall highlights –

Loan Book @ 73k vs 55.3k cr, up 32 pc

NII – 1001 vs 724 cr, up 38 pc

PPOP – 922 vs 654 cr, up 41 pc

Provisions – 252 vs 196 cr, up 30 pc

PAT – 475 vs 380 cr, up 25 pc

Gross NPAs @ 1.8 pc vs 2.4 pc

Net NPAs @ 1.0 vs 1.2 pc

Book Value / share @ 252 vs 215

RoE – 20.1 pc

RoA – 3.9 pc

Loan book break down –

Loans on company’s books – 44k vs 35.2k cr

Assigned assets – 18.4 k vs 15.4 k cr

Co-Lending – 10.5 k vs 4.7 k cr

Total – 73 k vs 55.3 k cr

Sector wise breakdown of loan book –

Home Loans – 24k vs 19.6k cr, up 22 pc

Gold Loans – 23.7k vs 17.8k cr, up 33 pc

LAP – 7.2k vs 5.9k cr, up 21 pc

Digital loans – 3.5k vs 1.99k cr, up 77 pc

MicroFin – 11.3k vs 6.7k cr, up 67 pc

5 yr CAGR of loans AUM growth @ 23 pc

5 yr PAT CAGR @ 28 pc

Avg loan rates –

Home Loans – 11 pc

Gold Loans – 18.5 pc

LAP – 18.6 pc

Digital laons – 22.4 pc ( primarily for MSME lending – unsecured loans )

MicroFin – 24.4 pc

AVG yeild- 17 pc

Avg cost of borrowing – 9 pc

Spread – 8 pc

Cost/Income @ 43 pc

Avg ticket size –

Home loans – 14 lakh

LAP – 7.7 lakh

Digital Loans – 0.7 lakh

Gold Loans – 0.75 lakh

Aim to reach AUM of 1 lakh cr by end of next FY

Company continues to remain cautious on unsecured lending / personal loans. Sounded skeptical of due diligence process followed by new gen Fintechs

Gold loan growth driven by company’s distribution strength

IIFL housing finance gets funding from National Housing Board at concessional rates – helps keep cost of funds under check

Company expects to maintain its NIMs at 7-7.5 pc or thereabouts

Management doesn’t see any credit demand slowdown if the economy remains robust – the way it is today

Avg life of Gold Loan portfolio is 90-120 days

Company believes, cost of borrowing has almost peaked in India. May move up-down by 10-15 bps, not beyond that

Company has slowed down its branch expansion spree. Should lead to lower Opex going fwd as more branches mature and their AUMs increase. Ex – IIFL’s gold loan branches have avg gold loan AUMs of 8 cr vs 22 cr for Mkt leader

Avg tenure of Digital loans varies from 6 months to 2 yrs. This is a high risk area. Hence the company is very aggressive in provisioning against Stage -3 assets wrt Digital loans. Despite that, returns are fairly attractive

LAP product in smaller towns etc has attractive rates. However, it also involves higher cost of origination like the cost of verifying the title, valuation of property etc

Q2 RoA @ 3.9 pc. Should be able to maintain the RoA range between 3.7-4.0

Credit cost range guidance given by the management @ 2 or thereabouts

Price war in Gold loans business witnessed in last FY is now abating. Hence the lending yields have gone back up

Co-Lending and Assigned books mainly consist of Gold, Housing loans and LAP

Current branch count at 4596 vs 3700 LY. As the new branches mature, operating leverage should kick in. On an avg, a branch breaks even in 18-24 months

Disc: Hold a tracking position, may add more, biased, not SEBI registered