Hi All,
Thanks for few suggestions.
I can understand that, ValuePickr forum mainly looks for small caps and mid caps which can generate 20-25-30% CAGR on annual basis. Reason for having large caps in my portfolio is to protect the downside considering that I do not have very long time frame for my financial goals.
Also, I have learnt in the past that, even such a large cap oriented portfolio can give returns of up to 25% CAGR if stocks were bought when undervalued and sold when get overvalued. I have always followed a stringent process for this and it has worked quite well.
Reason for TCS being high in portfolio is due to investments since IPO days, and comfort with the management, vision and ability to grow in tough conditions. Also, I understand that, now onwards it will not give me 20% CAGR returns hence have reduced it from 25% to about 14%, and may reduce it further. TCS is a high ROE/ROCE business with good cash flows and good dividend yield.
Mutual Funds can generate returns close to this, but I do not have control on the portfolio, and they keep holding overvalued stocks for a long time. I have more control on the portfolio and can follow my own style of investing. I do have separate MF portfolio.
I am slowly learning the art of identifying small caps which can give 25% CAGR returns and hence there are some quality small caps in the portfolio now. Due to tendency of not overpaying for some of the quality names I do not have Page, Gruh, Repco, Ajanta in the portfolio.
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