Omkar’s Portfolio Analysis and Discussion

Basket Approach in non-core holdings – Financials

I will continue with my plan with building basket approach in my non core holdings – financials ( 6-7% in each hdfc, kotak, icici, bajaj finserv) as stated earlier for following reasons

1. The role of non – core holdings is to let me allow to hold my concentrated core positions as long as their terminal value or franchise value is intact
2. I dont want to be too adventures in non-core holdings. Its job is to provide buffer and allow me to be aggressive in concentrated positions
3. Basket approach enables to take large allocation in a diverse financial which has long runway of growth
4. They also provide good exposure to amc, insurance and brokerage business from both the sides – agency and product
5. In my judgement equal weighted basket of 6-7% in each – hdfc bank, kotak bank, icici bank and bajaj finserv provided similar risk reward over a long term to any other large cap lending or non lending financials with better diversification of revenue streams
6. More importantly, it helps to stick with the plan on day like today.