Portfolio Composition:
Wanted to share some views on my portfolio, without going into specific details
- I own a very diversified Portfolio - More than 100+ companies in my portfolio. However the top 10 of these will contribute ~40% of my portfolio. My portfolio diversification today is resulting from my experimentation on different styles and opportunities ( Recently technicals, small caps, IPO’s, Buybacks, Advisory services, Smallcases etc). Also I view these large positions as optionality which allows me to move in/out quickly. Over time as I crystallize my style and become more discerning I believe the numbers will come down but may not be less than 40-50 stocks.
- I have generally reduced large-caps significantly over the last 6 months - Earlier I kept more large-caps to get stability in the portfolio but now I believe that with actively following markets and some research and understanding, I can possibly get better returns from Midcap/Smallcaps. Still own some largecaps which are trending. However Smallcaps (MCAP less than 5000 Cr) will be a significant part of the portfolio.
- Generally I don’t like companies which have significant debt. I have lost money earlier and now I am reasonably scared of high debt companies
- I look at my company shortlist from various lists - ATH, yearly H/L, Breakouts, News reports, Analyst mentions, Corporate announcements, MF portfolios, Friends advise etc. Basically I try to look at all companies people mention to have a view and then if I like it, I can move ahead.
- Without specifically preparing, I have today a Core portfolio where I dont do much activity unless there is significant change in conditions. Then I have a large Satellite portfolio where lot of experimentations are happening. The whole idea is to build some idea in the mind of what works and what does not. The tenet for the secondary portfolio is to “Fail fast” and “Make more Money on Winners and Lose less money on Losers”
At this point lot experimentations are happening and hopefully I will have more clarity and possible investment style in 12-18 months.
Thanks
Nikhil
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