Of late I have been inundated with a lot of requests for sharing my stock portfolio, the price at which I bought the stocks etc. I think these come from two categories of people – some who feel they would be able to learn something from what I had done and others who want to check and probably tell me what I had done wrong and why. Be that as it may, I think both of these types will not get what the want from what I am about to share. These picks are mostly at an earlier point of time and has to be seen in the context of how I operate. However, they do provide some general learning, which may be of use.
Let me start with Mindtree, one of my stock picks in the IT space that I have been very happy with. The details are:-
- I started investing in Mindtree in July 2007, as it looked to be a rather promising Mid tier IT company. I knew some people in charge there and was confident that the company will do well in the long run.
- My starting price was 663 and the stock started correcting immediately thereafter. Between 30/7/2007 and 1/11/2007 the stock went down from 663 to 463 and I made a total of 6 purchases each for the same number of shares.
- My final purchase was after the turmoil of 2008 at a price of 318.
- After the split my shares doubled and the price was 1500 plus . This was a multiple of 4+ on the invested price. Subsequent to another bonus the CMP is nearly 600 now.
- I am pretty sure that over the next few years a price of 1000 or so is very achievable for the stock.
- Mindtree is a good dividend paying company and that is separate from the above.
The next company is the Pharma company Dr Reddys Labs. The details are:-
- I wanted to have a few Pharma blue chip companies in my portfolio and DRL was an obvious choice.
- Like Mindtree, most of my investments in DRL were between July 2007 and March 2009. The acquisition price started at 632 and went down to 379 for my last purchase. Average cost of acquisition was 540 Rs.
- The CMP of DRL today is 3012 Rs and I expect it to go up to 5000 plus in the next 2-3 years.
- The gains in the stock are of the same scale as those of Mindtree.
The next company is the Automobile market leader Maruti. The details are:-
- I wanted to have Auto sector represented in my portfolio and Maruti was an obvious choice here.
- My first purchase was at 741 Rs in June 2007 and the last one was in October 2008 at 515 Rs.
- CMP of Maruti is nearly 5000 today and it is very likely to cross 6000 in this FY itself.
- My investment today has multiplied more than 7 times.
- On an average I get about 20000 Rs dividend per year from this stock.
The next company is also from the Automobile sector and it is M & M. the details are:-
- I chose this as it complemented Maruti in the commercial vehicles space.
- I started buying M & M in March 2007 and kept buying till January 2009. My starting point was 723 Rs and the last price I bought it for was 263 Rs. You can imagine the kind of bargain there was, but there were hardly any takers!!
- After the split adjustment, the current average price is 286 Rs
- CMP of the stock is 1243 Rs and expectations are for it to reach 2000 Rs sometime in 2016.
- My investment in this has again multiplied nearly 5 times.
- This again is a good dividend paying stock, normally declares dividend every quarter.
L & T was my first CD bought way back in 1992. See how it has done so far:-
- I got 75 shares at the price of 60 Rs each in 1992. This went through bonus/splits etc and today I have 225 shares.
- This is after I sold some shares in 2007 for 75000 Rs.
- CMP of L & T is 1518 Rs today and my total realization on a 4500 Rs investment is more than 4 lacs.
- This is exclusive of the good dividends that L & T normally announces every quarter.
- There will also be a lot of value unlocking in L & T shares when some of it’s subsidiaries get listed in 2016.
I could go on and list many more but you would have got the point. Of course, I have had spectacular failures too – some of them are Kingfisher Airlines, Reliance Infocom, Teledata Informatics etc. Several of the Infra companies are also not doing well at all but that is a long term play and I am still hopeful of them succeeding.
Many people ask me why I did not continue investing in stocks post 2009 in a significant manner. Firstly, my priorities got focused on my job as CEO of a global company and on my children’s studies as they were getting to a stage where I had to think of their college admissions. Secondly, I thought I had built a good enough portfolio and now it really had to be maintained over a long term. Thirdly due to my thoughts of giving up my corporate career, I needed to invest more in MF and debt products. All such investments have happened since 2008 onward. Finally, after we settled down in Hyderabad my wife got into building a portfolio of her own, though she only holds stocks for short term. Now, I really act as an adviser to her, though it is not easy for us to agree on what price one should buy or sell a stock.
My advise to all investors who are still wondering whether to start with stocks or not – go ahead and begin building a good portfolio over a period of time. Even if 50 % of your picks are successful you will gain much more than any other mode of investment. I absolutely know this in my case and I am sure it’ll be true for you as long as you choose good companies to invest in. No great tips or analysis of ratios is needed – just start with the market leaders first.