[KL01toKA03]

Originally Posted by BaCkSeAtDrIVeR

Hope I don't sound rude, and I don't intend to be, but when you hold for long term, you should be convinced before you buy. So, you shouldn't be asking now.
I dont have any Reliance group shares, because I feel they are too dependent on the family. Manappuram has no unique business or a brand equity. And thanks for that third company. Never heard of it. Nor knew of that line of business. I'll do my research. A quick Google search shows absence of entry barriers for new entrants, and I'm unable to identify how the product helps its customers. YMMV. I have not evaluated Jiyaeco.

No offence taken. I'm new to investing in shares, and my current investment is in such a level where I'll not lose too much sleep over some loss. I'm prepared to wait and learn.

It might not make too much sense but here is the rationale I followed:
Reliance: I'm betting that Jio gets a significant market share in broadband soon, and that it reflects in the profits and/or share price
HUL: Wanted something from the consumer goods sector, and HUL seemed to be a decent bet
Manappuram: Seems to be expanding its business outside Kerala/South India, and I hope there is still some more room for it to grow.
Jiya Eco: Tried to take a risk on some small company. Didn't see too many negatives, so took a chance.

I know that some of the reasons might sound silly to the more experienced investors, but this is what I have for now.

[BaCkSeAtDrIVeR]

Originally Posted by KL01toKA03

I know that some of the reasons might sound silly to the more experienced investors, but this is what I have for now.

No, not silly. But you need to be more confident of your decisions and learn not to regret them, not just investment. I don't sit in judgment over your your investment decision. In fact, though I've been avoiding HUL, found myself buying some, coz they are wise investors and buying a company I already own a few shares in. Lol. Actually arbitrage in post merger swap ratios. But I'll hold on for few years.
I don't buy anything which I don't understand. If I can't connect the company to its product and brands, I avoid investing.
But I do look back once in a while and review my decisions, so that mistakes are not repeated.

Thus not buying MRF @ 9000, Shree Cements @ 2000, Bosch, Escorts, etc. They are not heartbreaking coz in mid 1980s, MRF was 900 or so. No bonus, no splits, and typical of Kottayam Achayans, (are you one?) Stingy.

I also sold some shares because the management is not liberal as I expected. Like SKF sold at around 470.
Maybe, I was wrong, maybe an opportunity was lost, but reasonable I avoided are still valid, but the market obviously does not agree with me.

[bluevolt]

Originally Posted by karanraheja

Sorry to be a bit blunt here, this is typical Human mentality , we post only our losses, why dont we post when we get a 5 bagger or a 10 bagger? The Index is at its peak but all stocks have taken a beating. It would be the same way for a year atleast. We need to be mentally prepared for such a phase when we invest in stocks.

Index at its peak is actually a myth. Only a few select stocks are making that happen. Recommended Reading - https://www.moneycontrol.com/news/bu...a-4127601.html

And we don't post our 5 times baggers because we don't need analysis on things that are giving us what we want. We need analysis and help on the stocks that are a concern due to negative returns over a period of time.

Originally Posted by BaCkSeAtDrIVeR

Surely, a case of poor selection. And ignoring the management and business environment. Only exception being ITC. And AB Capital, if AB means Aditya Birla. Maybe, PTC too.

I would like to have more comments on the poor selection. Out of the listed stocks in my portfolio, would you rate HUDCO, RCF, Maruti, Aditya Birla Capital, ITC, etc as poor selections?

I agree on DHFL (btw it was the most recommended stock by every xyz financial advisor till the NBFC crisis surfaced). Ginni filament was a risky small-cap bet and I acknowledge the risk associated with it as well.


-> DHFL
-> AB capital
-> Dhampur sugar
-> Indiabulls housing finance
-> Ginni filaments
-> RCF
-> HUDCO
-> D-Link
-> ITC
-> Maruti
-> Tata motors
-> MRPL
-> PTC!

Thanks, both for your inputs anyway.

[whitewing]

Originally Posted by bluevolt

I agree on DHFL (btw it was the most recommended stock by every xyz financial advisor till the NBFC crisis surfaced).

Exactly!

I wonder how a layman could even get a premonition of the DHFL crisis?


I have invested in this and chose to wait out for two reasons
a) I have traded a few times over long term and have recouped and more on my initial investment - thanks to a mad rush on Lending companies some months back.
b) The audit found no siphoning of funds and the promoter wrote to the shareholders reiterating his confidence in getting things back on track.
Now, Things look bleaker by the day.

Even if there was an inkling of things to come (when a large debt transfer was made in Oct of 2018??), I wonder what would have been the right time to bail out?
Someone who got on in that time frame would have paid 200+ and in Jan '19 it fell to ~100. Unless the person had a clear stop loss while making the buy, they probably would have held on - AND during this this time the credit rating agencies had not junked it yet.
What is the accountability of credit agencies?

[BaCkSeAtDrIVeR]

Originally Posted by bluevolt

I would like to have more comments on the poor selection. Out of the listed stocks in my portfolio, would you rate HUDCO, RCF, Maruti, Aditya Birla Capital, ITC, etc as poor selections?

I agree on DHFL (btw it was the most recommended stock by every xyz financial advisor till the NBFC crisis surfaced). Ginni filament was a risky small-cap bet and I acknowledge the risk associated with it as well.


-> DHFL
-> AB capital
-> Dhampur sugar
-> Indiabulls housing finance
-> Ginni filaments
-> RCF
-> HUDCO
-> D-Link
-> ITC
-> Maruti
-> Tata motors
-> MRPL
-> PTC!
.

I own ITC. The numbers are almost 4 digits. And value is six digits. ITC is a good choice, but please watch carefully. The succession game is on.
Why I would not buy some of these companies:-
DHFL - Several years back, they posted an ad for legal advisors. But they wouldn't take lawyers. And payment was peanuts. For a housing finance firm, that was a huge hole.
Government regulations administered prices, weather uncertainties, lack of pricing power. >> RCF, MRPL Sugars, PTC.
D-Link - wafer thin margins.
HUDCO - Frankly, that is still a PSU, for me.
India Bulls still frightens me. Some things which rise too fast ticks me off.

Maruti. Or more accurately, Maruti Suzuki India. Now, tell me Frankly, will your employer tolerate you running a parallel business that competes with his? Heck, Suzuki has a separate fully owned subsidiary which makes and sells cars in India. No sir, I call it conflict of interest.
No, not interested in others.

[SmartCat]

Remember that Mid and Small caps stocks' price performance is extremely cyclical in nature. Price performance is entirely dependent on mood of retail investors. There are exceptions to this rule, of course. Some Mid and Small caps catch the fancy of famous HNI or institutional investors and turn into multibaggers. But as a group, the overall returns of Mid and Small caps will be more or less the same as Large Caps over 10+ years horizon. As a grouping, they grow their profits at around the same pace as large caps.

Sure, in the short term, Mid and Small Caps might see a "PE re-rating" but they will eventually revert to its long term mean (as a group). That is, when the music is playing, PE ratio of Mid and Small Caps might jump from 10/15 levels to 20/30 levels. But when the music stops playing, PE ratio will revert to its long term mean (of 10 to 15 levels). And when that happens, you will see a price erosion of 50% to 75% from its peak.

Solution? Allocate a certain fixed percentage to large, mid and small caps. Example:

Large cap allocation: 50% (marketcap > Rs. 50,000 cr)
Mid cap allocation: 30% (marketcap > Rs. 5,000 cr but less than Rs. 50,000 cr)
Small cap allocation: 20% (marketcap > Rs. 500 cr but less than Rs. 5,000 cr)

Depending on mood of the market and inflows from FIIs, DIIs and retail investors, each of the above stock categories (Large/Mid/Small) will starting "moving". Since nobody can predict which category will perform over the short term, it is best to allocate reasonable amounts to each category.

You can track your portfolio allocation to each category of stocks using moneycontrol, valueresearchonline or marketsmojo etc and adjust accordingly. That is, if your small cap allocation is 30%, you can either book profits in some small caps or stop investing fresh capital into such stocks. During these times, you could invest in Large caps to try and get its percentage to 50% levels.

[inder]

I am in the stock market since 20 years. Recently had received a sizeable corpus. Wanted to invest it lumpsum in mutual funds, after doing a lot of research,I decided to invest in shares directly. Have decided to start an SIP of HDFC Bank shares. 10 shares/ month. How's the idea?

[bluevolt]

Experts, what are your opinions on TCS, ICICI Bank, Reliance and HUL?

These are the only stocks in my portfolio that are giving me positive returns since last one year. Should I book profit and exit amidst current share market scenario?

EDIT - Though my investments in these stocks were for 'long' term. But unlike good old days, I am not sure long term concept hold anymore significance in this dynamic world.

[carboy]

Originally Posted by BaCkSeAtDrIVeR

Maruti. Or more accurately, Maruti Suzuki India. Now, tell me Frankly, will your employer tolerate you running a parallel business that competes with his? Heck, Suzuki has a separate fully owned subsidiary which makes and sells cars in India. No sir, I call it conflict of interest.

Can you give details about this - never heard of this?

[adimicra]

I have been in the stock market for a long time mostly through mutual funds and bluechip companies. Few months back, I moved most of my investments out of large caps to mid and small caps as they have severely underperformed over the last couple of years and undervalued.

Now with the budget not delivering and economy in pretty bad shape, the markets are not looking like recovering soon. So, it looks like I have to wait for at least a couple of years to make money. What's the general opinion here?

I am also thinking of investing in US stock market. Do you know what is the easiest and cost effective way to invest there?

[SmartCat]

Originally Posted by adimicra

I am also thinking of investing in US stock market. Do you know what is the easiest and cost effective way to invest there?

Sign up for Interactive brokers India at
https://www.interactivebrokers.co.in...=3405&p=hybrid
You can transfer funds directly from Indian bank account. You can pick stocks directly or invest via ETFs or mutual funds of many countries (including US).

Other option is to invest in "Fund of funds". Indian mutual fund houses collect money from Indian investors and invest in foreign mutual funds (Global diversified, US, Europe, China, Brazil etc). For the full list of available options, check:
https://www.valueresearchonline.com/...at=118&x=4&y=8

[adithya.kp]

Smartcat,
With the kind of corporate governance issues, growth, valuation, quality we have in India, I feel it would be good explore international markets. Investable universe in India is very small. Thanks for the pointer on interactive brokers. By any chance have you have used it?. Any feedback?. Also, is this 2000$ for market data subscription mandatory?.

[SoumenD]

With the budget declaration of maximum promoter share being upto 65% quite a few stocks like Wipro, TCS would probably be made available in the market for grabs. Am expecting this would lead to them getting corrected. Is it a good idea to pick them up while they hit a low?

Looking forward to some insights on this point by the stock gurus here

[SmartCat]

Originally Posted by adithya.kp

With the kind of corporate governance issues, growth, valuation, quality we have in India, I feel it would be good explore international markets. Investable universe in India is very small. Thanks for the pointer on interactive brokers. By any chance have you have used it?. Any feedback?. Also, is this 2000$ for market data subscription mandatory?.

I have not tried Interactive Brokers India. I'm not too keen on investing in US stocks. That's because Indian and US markets are highly correlated. If there is a global financial or geopolitical crisis, both the markets will go down.

For diversification, it is better to invest in either gold or government bonds.

GOLD: Gold will roughly offer (inflation + rupee depreciation) returns. Historically, Gold has offered 12% CAGR returns. RBI's sovereign Gold bond scheme offers another 2.5% returns kicker (in the form of interest).



More importantly, Gold offers excellent diversification since it is denominated in USD and money rushes into Gold during global financial crisis. That is, whenever there is financial crisis in India, USD appreciates against INR and Gold goes up. Whenever there is financial crisis in the world, global funds rush into Gold and it goes up.

GOVERNMENT BOND MUTUAL FUNDS:

Well managed government securities mutual funds offers 8 to 10% per annum. If you hold for 3+ years, these funds are SAFER than fixed deposits because there is no credit risk.



Like Gold, money rushes into government bond funds whenever there is global or Indian financial crisis. Last year, my bond portfolio was up 16%. In 2008, bond mutual funds offered anywhere between 25 to 40% returns (see graph).

Here is the list of government bond mutual funds. Choose funds from well known fund houses like ICICI, SBI, HDFC etc
https://www.valueresearchonline.com/...t=134&x=12&y=5

I prefer keeping 50% in Indian stocks and 50% in Indian government bonds for low volatility and decent long term returns.

[carboy]

Originally Posted by SmartCat

For diversification, it is better to invest in either gold or government bonds.

GOLD: Gold will roughly offer (inflation + rupee depreciation) returns. Historically, Gold has offered 12% CAGR returns. RBI's sovereign Gold bond scheme offers another 2.5% returns kicker (in the form of interest).

If anyone in planning to invest in RBI's Sovereign Gold Bonds - check out buying from the secondary market rather than buying directly from RBI. The older bonds usually trade at a discount to whatever rate the current RBI bonds are offering.