Yash Portfolio Feedback

Portfolio Review:

Returns:

A more normal return year after the frenzy of the last two years. A year that saw good decisions and bad decisions alike and was filled with lots of learnings.

Things that worked well in the year:

• Decently high allocation in the portfolio to banks and financial services which were a good outperformer during the year
• Avoided frothy sectors: new age technology, IT, pharma & manufacturing which were significant wealth destroyers during the year.
• Selling decisions much improved over the previous year. Tata Communcations, HOEC, Real Estate Portfolio, Faze Three, Bajaj Finance & Saregama were all sells that helped the portfolio avoid losses/0 returns. No obviously bad sell decisions in the year except Rossell; which was a low conviction buy.
• Incremental Capital Deployment pretty decent: The capital released from the funds released from selling were put to use in much better opportunities: Some of them were Ujjivan Financial, PSU Banking, Ganesha Ecosphere, MCX and Arman. Also increased banking weight during the year. All in all, the churning of positions contributed significantly to portfolio alpha during the year.

Big Mistakes/Learnings from the year:

• Big losers for the year: Indiamart & Delta Corp. Took some big learnings from Indiamart (declined almost 60% during the year). 2 mistakes were made here: a) Extrapolation of temporary pandemic related benefits into the future & b) Failure to sell despite being fully aware that the stock was wildly overvalued. Learnings from Indiamart have informed sales of Saregama and more recently Raghav Productivity
• While this year had relatively few mistakes of commission, there were plenty of mistakes of omission. Discussed a few posts above. A lot of opportunities were missed. I dont expect to not make these errors. But by journalling and keeping a thesis of not buying as well, I hope to reduce the errors of omission over time.
• Sizing: Got a couple of sizing decisions wrong during the year; most obviously with PSU Banks where the weight was far too low. When odds are glaringly in your favour, and there are near term triggers for value unlocking; I need to be bolder and bet bigger. One similar opportunity I see in the upcoming year is Chinese stocks as a whole. Thus, I will be quickly ramping up allocation to Chinese stocks to the 10-15% range in the next 6 months.

Excited for the upcoming year though I suspect it will be a lot more volatile and difficult than the last year! The ability to invest across asset classes and geographies I suspect will be very important for the upcoming year.