My Portfolio thread has a heading “Passively Active” , but after my reading of Pulak Prasad book and from my own experiences, I have come to the realisation that “Passive” doesnot mean Index. Rather Indexes are very active , to think of it. Every 6 months, they do modification of indexes, Some stocks enter into index, while some exit from index. Its quite active.
My definition of Passive is, buying good businesses and hold them for very long time, unless their business deteriorates.
And since almost all Active mutual funds, have very high turnover, as their investors demand them to buy and sell frequently, they are not holding good businesses for decades, which is now my requirement. So i decided that, I will sell all Flexicap and hold direct stocks only, so that I needn’t sell them under any pressure. Now I am not worried about CAGR returns, I am aiming at how many times my investment becomes over a long period,…
So now I dont want to hold elephant stocks like HDFC bank or Infosys or HUL as they will give me Index returns, Since my time horizon has become permanent owners, I want growth companies. Even among Large cap I want Bajaj Finance, Chola Finance, SRF, Titan, Polycab, LTIMindtree type of companies which are even after becoming Large caps, they are fast growing companies.
I dont want to hold companies, just because they are big names and their past history has been stellar and ppl have written books about them. I want to invest in companies which are performing today , their sales are increasing , their profits are growing, margins are improving and ROCE is consistently high.
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