Portfolio Update - 2014

Another year comes to an end - one which has been an eventful year for India, with a new government at the center, one which has a majority in the Lok Sabha, after decades of coalition politics. The stock markets have run up a lot on partly fuelled by overall global equity market rallies and partly by the hope of an economic revival in India under the new government.

2014 was also a great year from a return perspective. My portfolio returned 135% gains during the year as opposed to a 30.75% rise in the Sensex and 81.67% of the HDFC Equity Fund. (As I have explained above, I try to see my performance with respect to this fund just to make sure that I am not wasting my time picking stocks!!)

Most of the great return came from just sitting out on the picks that I had in the portfolio. That is the beauty of having a long term portfolio with good and stable businesses. I continue to hold on to nearly all my long term picks and remain convinced about their growth prospects in the future. 

During the year, some notable changes in the portfolio were as follows:
New additions - CCL Products, Sintex, Symphony 
Reduced holding - Mayur, Cera
Completely booked profits / losses - Selan Exploration, Finolex Cables, Page Industries

I have also updated the Portfolio page.

The case for Mayur was very interesting and I had to spend a lot of time to think through. It continues to be a business which I am most confident about in the long term and the stock performance over the years has been a 100+ bagger for me, so endowment effect was very strongly present. The only reason to sell was I decided to book some profits as it had grown above 25% of my portfolio and was creating risk that I was unwilling to take.

I wish all my friends a great, prosperous and rewarding 2015. 

May the Force be with you in 2015!

Disclosure: I am not an investment analyst. Stocks discussed in the blog should not be construed as buy / sell recommendations. This blog is a chronicle of my actions and thoughts in the markets. Please consult an accredited financial advisor for financial advice.

Portfolio Update

Being a value investor is fun!! It gives one a leeway for being lazy and inactive while putting on a facade of being intellectually stimulated. 

The above is a disclaimer for delaying updating my portfolio at the end of July and doing it a month late :-)

The updated portfolio is on the Portfolio page of the blog.

The performance of the portfolio has been extremely satisfying to me. Luck does indeed catch up sometimes. For the first half of the year:
Portfolio - 89.3% 
Sensex - 21% 
HDFC Equity Fund - 40% 

HDFC Equity Fund is my benchmark mutal fund. My thesis is that if one can't perform better than a good fund over a period of time, then better invest in the fund and pursue other passions.

This time the returns were distributed and came from many of the portfolio stocks - Mayur contributed the most with a stellar rise, taking the price to an uncomfortable territory. Astral also has gone to a level which is making me uncomfortable, but not yet to the point of selling. Finolex Cables, Balkrishna, Ajanta, Alembic, PI Industries all contributed their fair share in the performance.

In the first half, I added Bajaj Finance, PTC India Financial Services, Kitex Garments and Selan Exploration and booked profits from Page & Atul Auto. 

I believe Bajaj Finance is on a very strong wicket and will do very well for a long period and is available at reasonable valuations (more I suspect due to the fact that they did not get a banking license). PTC Finance is also doing extremely well and has good visibility of earnings in the short and medium term though longer term is hazy. I need to do more due diligence on Kitex and Selan. 

Currently, I am relooking at some of my old favourites like Sintex, Shriram Transport and some others like Persistent Systems, Symphony Coolers to see if they fit into the portfolio.

In my opinion, we have just started a bull-market and we have a long, long way to go. So, good stock selection and portfolio weightage can give outsized returns even from these levels.

Happy Investing!

2013 Portfolio Roundup

With the calendar year coming to an end, it is time to take stock and look back at the year and the developments in the portfolio.

For the majority part of the year, I was bearish on the Indian economy. Even today, I am not convinced that the country is in very good financial health. The recent rally is more based on hope than substance. This rally has been fuelled by the hope of a stable pro-reform BJP government at the centre in 2014. Purely on fundamentals, there is no improvement on the ground. Inflation continues to be high, specially food inflation. It is unlikely to come down any time in the near future as long as the supply side structural issues are not addressed. The Current Account Deficit, thankfully has come down with the prices and consumption of gold falling during the year. Rupee scared everyone (atleast the importers and of course cheered the exporters) by shying away from the Rs 68 mark and settling for some time around 60, up from the 45-50 range established for a fair number of years.

I made some changes to my portfolio. I booked profits on some of the stocks where I had made good profits and where the business climate was looking sluggish for the next few years like Balaji Amines, Titan, GRP, Shriram Transport Finance, Cravatex and JK Lakshmi Cement. I booked losses in CEBBCO (lost 70% of my investment on this), Sintex and Thangamayil Jewellery.

During the year, I added some stocks, which are either more export focused and thus likely to gain by the strength in the dollar or simply who businesses are faring well in this recessionary environment. Shilpa Medicare, Poly Medicure, Alembic Pharma, Ajanta Pharma and Finolex Cables. I have added to my initial positions in PI industries and Kaveri Seeds over the year in small quantities. I have reduced my positions in Cera as I think the price has run much ahead of fundamentals. I have added Page Ind to my portfolio as a dipstick investment more from a tracking perspective. I am still not decided on the valuation comfort in the stock. I have not made any changes to my top 3 holdings.

Over the year, my portfolio has returned 25.14% versus 8.27% of the Sensex and 3.3% of the HDFC Equity fund. I have chosen the HDFC Equity fund as it is one of the largest and best-managed equity fund over a 15 year period. The point is, if I am not beating a decent mutual fund, then I would rather put my money there and go sit on a beach ;-)

Name of Company	% of Portfolio (Dec'12)	% of Portfolio (Dec'13)	Comments
Mayur Uniquoters	19.08%	19.79%	Hold / Buy on dips
Supreme Ind	16.37%	16.42%	Hold / Reduce
Astral Poly	8.02%	14.75%	Hold
Kaveri Seeds	2.02%	6.78%	Hold / Buy on dips
Amara Raja	5.06%	4.98%	Hold
Cera Sanitaryware	7.88%	4.72%	Hold / Reduce
Finolex Cables	0.00%	4.44%	Hold / Buy on dips
Yes Bank	6.03%	3.89%	Buy
Auto Auto	2.88%	3.85%	Hold
PI Industries	0.50%	3.77%	Accumulate
Balkrishna Industries	2.44%	2%	Hold / Reduce
Shilpa Medicare	0.00%	1.99%	Accumulate
Alembic Pharma	0.00%	1.97%	Hold
Ajanta Pharma	0.00%	1.88%	Hold
Poly Medicure	0.00%	1.75%	Accumulate
Page Industries	0.00%	0.66%
Cash	0.31%	6.35%
Balaji Amines	3.51%	0%
CEBBCO	2.20%	0%	Analyze mistake
Cravatex	0.84%	0%
Gujarat Reclaim	2.56%	0%	Wait for turnaround
JK Lakshmi Cement	3.51%	0%	Keep watch; Buying time may be soon
Shriram Transport Finance	8.22%	0%	Keep watch; Buying time may be soon
Sintex India	3.00%	0%	Keep watch; Buying time may be soon
Thangamayil Jewellery	1.22%	0%	Analyze mistake
Titan Industries	4.32%	0%	Keep watch

Buy when there is blood on the streets

If I reflect back on the last 12-13 years that I have been investing, I see that I have made a significant amount of money when I have bought when there was the proverbial "blood on the streets". I had bought around 2002-03 before the bull market really started (that was more of good luck that a well laid out thought process in action). I again bought right through 2008. And I am buying now as well. I think the "CNBC public" get too swayed by what gets reported. A couple of months back, things were so rosy and now suddenly all mid cap and small caps are collapsing!!

I think it is a good time to look at deep value large caps, good solid mid caps and some adventurous small caps. I am buying small quantities of Unichem Lab, Finolex Cables, Deepak Nitrite, Kaveri Seeds & PI Industries.

Another suggestion - IGNORE ALL TV PROGRAMS ON THE BUDGET!! They add nothing to your investing knowledge or expertise and just create a large amount of noise in the system.

Disclosure: I am interested and invested in all the stocks mentioned in this post. Please due your own due diligence before investing.

Portfolio Performance - 2012

This year onwards I have decided to close my stock books on Dec 15th to enable me to enjoy the Christmas season a bit better and catch up on some pending reading. So, here is an update on my portfolio and how it performed. I believe quantitative evaluation is important although performance (good/bad) needs to be judged over a 3-5 year period.

This year was an interesting and eventful year (probably like any other). Overall the market performed well, contrary to popular belief. Gold was up to record highs this year based on the economic fears around the world. China and India continued on its path of guzzling gold. The Indian rupee fell to Rs 56 levels before recovering to around the current 54 odd levels. How long it stays at this level or which direction it moves next is anybody's guess.

The Indian government finally woke up and started on some much needed reforms. FDI in retail, creating a Cabinet Committee on Investments (CCI), the urea investment policy and the much awaited Land Acquisition Bill. There were significant activities in the political front with the civil society movement and Arvind Kejriwal launching a political party amidst a plethora of scam accusations.

Sensex started the year at 15455 and is up 25% till date. My portfolio performed well over the year. It appreciated 71% over this period. I have also started looking at comparing the performance with HDFC Equity Fund (a fund which I admire for its consistent and long term good performance). HDFC Equity Fund has returned about 30.5% over this period.

I have not added any money over the period of this year so any changes to the portfolio weightage is due to relative performance of the stock. I have added Amara Raja Batteries, Atul Auto, CEBBCO, Kaveri Seeds and Thangamayil Jewellery. I have re-added PI Indistries more from a tracking perspective and intend to build up my positions if the results pan out well in the next 2 quarters. I have booked profits in Elecon, GEI Industrial, HSIL, IFB Agro and Opto Circuits.

Name of Company	% of Portfolio (Apr'12)	% of Portfolio (Dec'12)	Comments	Cumulative Portfolio%
Mayur Uniquoters	11.68%	19.08%	Hold / Buy On Declines	19.08%
Supreme Ind	15.33%	16.37%	Hold	35.45%
Shriram Transport Finance	7.75%	8.22%	Buy	43.67%
Astral Poly	5.90%	8.02%	Accumulate	51.69%
Cera Sanitaryware	3.92%	7.88%	Accumulate	59.57%
Yes Bank	6.02%	6.03%	Buy	65.60%
Amara Raja	0.00%	5.06%	Buy	70.66%
Titan Industries	4.59%	4.32%	Hold / Sell On Advances	74.99%
JK Lakshmi Cement	2.88%	3.51%	Buy	78.50%
Balaji Amines	5.04%	3.51%	Hold	82.02%
Sintex India	0.91%	3.00%	Buy (2 year horizon)	85.02%
Auto Auto	0.00%	2.88%	Accumulate	87.90%
Gujarat Reclaim	2.67%	2.56%	Buy	90.46%
Balkrishna Industries	6.51%	2.44%	Hold & Watch FY13	92.90%
CEBBCO	0.00%	2.20%	Hold	95.10%
Kaveri Seeds	0.00%	2.02%	Accumulate	97.12%
Thangamayil Jewellery	0.00%	1.22%	Hold / Buy On Declines	98.34%
Cravatex	5.23%	0.84%	On watchlist for FY13 results	99.18%
PI Industries	0.00%	0.50%	Accumulate	99.69%
Cash	10.04%	0.31%		100.00%
Elecon Engg	2.49%	0.00%	Profit Booked	100.00%
GEI Industrial	3.73%	0.00%	Profit Booked	100.00%
HSIL	2.05%	0.00%	Profit Booked	100.00%
IFB Agro	1.89%	0.00%	Profit Booked	100.00%
Opto Circuits	1.37%	0.00%	Profit Booked	100.00%

 
I intend to continue my focus on mid & small cap companies and ones which are reasonably priced.