At the risk of stating the obvious, there are three factors that drive return on your portfolio: 1) Entry Price 2) Exit Price 3) Allocation.

These three are also the reasons why a retail investor shouldn’t clone a star investor’s portfolio.

To elaborate a little further:

1- Entry price- Star Investors (SI) barring a very few exceptions invest in small/microcaps stocks where tradable float/liquidity/both can be very low. This means by the time SI’s holding is published stock has mostly run 2-3 x due to insiders buying the stocks. So if retail enters a stock copying an SI, they are buying at a much higher price, than an SI, capping the upside.

2- Exit price- For same reason as above, when SIs decide to exit a stock, for any reasons say better opportunities elsewhere or something wrong they discovered in the company, retail investors are usually the last to know about it. By the time the latter follows an SI the stock has fallen quite a lot eroding their profit.
In some cases a stock may still continue to go up after an SI’s exit and since retail investor really has no conviction in the stock they will book their profit at lower price, incurring even higher opportunity cost.

3- Allocation- Most SIs generate superior returns from 10-20% of their holdings that do really well while some giving average returns and remaining turning out to be duds. Also not all SIs portfolio returns track each given their individual preferences for sectors. Which means an SI, a retail is copying, may see mediocre results on their holdings for 1-2 years before striking it rich when their sector hits a bullish patch. Not every retail investor has that much patience, especially with stocks, they purchased on someone else’s conviction. And if one decided to copy several SIs to hedge their risk they will end up owning large number of stocks with too little allocation to generate any meaningful return, even if some of their stocks actually became multibaggers.

From my experience (I used to copy star investors at the start of my investing journey before stopping it, thankfully) I have learnt that there is no way I can make same returns as an SI due to differences in entry and exit prices, and allocation. I have also discovered that I can still make good returns, by investing in any 20-30 decent stocks selected with my own conviction, and I have been able to do that.

One star investor recently said (in not exact words): don’t chase money in the stock market… chase the story (to build conviction) and you will build a lot of wealth. Trying to clone a star investor is similar to chasing money without knowing the real story as to why an SI is in a stock in the first place.

One needs to do their own research to build conviction in a stock so that they can hold it in meaningful quantity for a longer period of time to build wealth. If a “credible” star investor happens to be share holder in that stock it’s just cherry on the cake. It can give you that extra validation needed to keep going.

We also need to keep in mind that even SIs are not right all the time (enough data points to prove that) and their entry and exit don’t necessarily mean that a stock or a company is good or bad.

Your own conviction in the story will ensure that you will keep holding the stock even after an SI has exited it.

Update On Industrial Incentive – Disclosure Under Regulation 30 SEBI (LODR) Regulations, 2015

Subject: Update on industrial incentive – Disclosure under regulation 30 SEBI (listing Obligations
and disclosure requirements) Regulations, 2015
Further to our letter dated 20th May 2023 providing an update on the industrial incentives and
benefits under the Package Scheme of Incentives (PSI) 2013. We are to inform you that the
Directorate of Industries, Government of Maharashtra (GOM) has its letter dated 2nd May 2024
amended the Eligibility Certificate under the Package Scheme of Incentive Policy (PSI) 2013
pursuant to the application made by the Company for additional investment made at its
Aurangabad facility for the period 1st January 2019 to 31st January 2022.
The GOM vide the above stated letter has amended the Eligibility Certificate under the PSI 2013 and
revised the Industrial Promotion Subsidy (IPS) to Rs.16865.05 lakhs from the existing Rs. 10360.52
lakhs.

After lightening up on Kotak in the interim to buy other companies, I bought another tranche of Kotak again after the price correction, partly due to laziness to find better opportunities. Also I sold ICICI securities since I bought it to play the special situation and used the funds to buy syngene. Lightened up on skipper after the results but still retained a major chunk as I don’t have anything in the sector. Sold out Kaveri seeds since after the buyback I dint have meaningful allocation to it.

Looks like Transformers and renewables is the sector to be right now. Felt bad on missing out on Technoelectric , should do the study faster before the price could recover faster.

Got really lucky with Paushak, after allocating a decent size the result also came out to be good. Usually when the stock is in a downturn the result usually comes out horrible but thank heavens the turnaround for me happened much faster. have to see how market reacts on Monday. Fingers crossed for Kotak results today , hoping for a positive surprise to spring out but yeah wouldn’t mind to take it allocation to 10% if it hovers around this price level. Have to see which I have to cut out to accommodate kotak or wait for fresh funds.

This covers pure animation post production and visual effects services undertaken by Indian units for foreign film production houses. So this is a great incentive by Govt. I request interested VPs to raise this issue on 8th and incentive, if any, received by the company under this initiative . This is a big positive for VFX companies, particularly Digicore, Phantom and Basilic.