Ventura’s Stock Picks Give 42% Gain In 3 Years

Equities are a long-term investment and so it is fair to compare the performance of a portfolio over three years. We take up Ventura's 2010 stock picks for review and find that despite poor stock selection, the portfolio has resulted in reasonable returns of 42% over three years and an annualized return of 14%

Equities are a long-term investment and so it is fair to compare the performance of a portfolio over three years. We take up Ventura’s 2010 stock picks for review and find that despite poor stock selection, the portfolio has resulted in reasonable returns of 42% over three years and an annualized return of 14%

Stock	Price on 12.01.2010	Price on 25.01.2013	Absolute Return (%)
Indraprastha Gas Limited	200	260.95	31.73
Mahindra & Mahindra	594.63@	899.60	51.29
Aurobindo Pharma	176.84 @	187.30	5.91
Sterlite Industries Ltd	218.91#	112.25	-48.72
Deepak Fertilizers	117	116.70	2.19
HDIL	366	82.50	-77.38
IndusInd Bank	146	431.30	207.3
Kalpataru Power	236.44@	100	-57.71
Crompton Greaves Ltd	246.34$	110.45	-55.16
GAIL	415	353	-17.38
Absolute Returns			42.07
Annualized Returns			14.02

@adjusted for split
#adjusted for split & bonus
$adjusted for bonus

As can be seen, out of 10 stocks, only 5 stocks were in the green, with two being absolutely flat. IndusInd Bank spared Ventura the blushes with a stellar performance of 200+% gains.

The worst performer was Housing Development and Infrastructure (HDIL). The steep fall in the stock over the past few days over rumors that it was going bankrupt/ had debt repayment issues/ the promoters are dumping the stock and the general indifference over realty and infrastructure stocks have meant that poor investors have lost a whopping 75% of their wealth over 2 years.

Deepak Fertilizers and Petrochemicals is a good example on why you must never dabble in stocks that are dependent on Government policies for their survival because given a choice between profit mongering corporates and the common man, the Government will (rightly) prefer to support the common man. That is why fertilizer and sugar stocks never do as well as stocks of other companies.

Anyway, what the Ventura Portfolio performance shows is the importance of diversification. Ventura spread out their stocks over various sectors – Banks, Oil & Gas, Autos, Capital Goods, Fertilizers, Realty etc. It is thanks to this sensible allocation, that the Portfolio has kept its head above water.