My current stock portfolio – Top 5 by value

While most investors may be going through the MF route to buy equity as an asset class, there is a lot of interest in the stock portfolios of seemingly successful investors. This is amply demonstrated by the numerous requests I get for stock tips and readers wanting to know about my portfolio. I had written on this earlier but with the passage of time a few things have changed. So here is a list of my top 5 holdings.

The first in the list is Maruti Suzuki and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Auto sector along with Tata Motors as Indian auto companies.
  • My first purchase was in 2007 June and the last in October 2009.
  • The stock has not seen corporate action in terms of bonus or splits.
  • It has normally been a good dividend paying company and in the last 2 years the dividends have been 500 % and 700 %
  • In terms of potential, this is clearly one of the best examples of an Indian company which has dominated locally and started it’s global journey now. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 678 Rs and it is about 6% of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The second one in the top 5 list is TVS Motors and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Two wheeler sector, which is an important one for our economy.
  • My entire purchases for this stock was in the calendar year 2006.
  • The stock declared a bonus in 2010 which doubled my shares held.
  • It has normally been a good dividend paying company at around 60-80 % but last year it increased the dividends to a whopping 250 %.
  • In terms of potential, this is clearly one of the best examples of an Indian company catering to a growing local demand. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 50 Rs and it is about 6% of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The third in the list is Tata Motors and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Auto sector along with Maruti as Indian auto companies.
  • My first purchase was in 2007 February and the last in January 2009.
  • The stock has seen a lot of corporate action in terms of bonus earlier but I only witnessed a split in 2011.
  • It has normally been a good dividend paying company at 100 % but in the past 2 years this has come down considerably.
  • In terms of potential, this is clearly one of the best examples of an Indian company which has gone global successfully. I think it is quite possible for the stock to double over the next 2-3 years.
  • My investment in the stock is now at an average price of 109 Rs and it is about 5% of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The fourth one in the top 5 list is Kansai Nerolac and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the paints sector, which is an important one for our economy.
  • My first purchase was in 2008 January and the last in January 2009.
  • The stock has declared a bonus in 2010 which doubled my shares holding.
  • It has normally been a good dividend paying company at around 100 % and in 2017 this was increased to 250 %.
  • In terms of potential, this is clearly one of the best examples of an Indian company catering to a growing local demand. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 29 Rs and it is about 5% of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The final one in the top 5 list is M & M and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the commercial vehicles sector, which is an important one for our economy.
  • My first purchase was in 2007 March and the last in January 2009.
  • The stock has seen a split in 2010 when the face value was reduced to 5 from 10.
  • It has normally been a good dividend paying company at around 200 % and more.
  • In terms of potential, this is clearly one of the best examples of an Indian company catering to a growing local demand. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 285 Rs and it is about 4% of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

As you will see from here, investing in good companies and holding them for a long period of time has really worked for me here. There are some other holdings I have that may be of interest to my readers. I will share it in a future post.

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Want to build your own stock portfolio? Here’s how

I understand that getting started in stocks is not an easy thing with so many experts giving a lot of conflicting advice to you. Some will tell you that you have no hopes of building a good portfolio unless you can understand all kinds of ratios and read Balance sheets like a CA does, others will tell you that going for direct stocks is akin to a horse race where anything you bet on is almost certainly going to lose. Yet others will chide you for thinking anything beyond Mutual funds. After all they are experts and invest only in MF with all kinds of complex strategies, who are you to even think otherwise?

While all of the above has very obvious counters, read my post on Why you must be in direct equity to satisfy yourself on the importance of being in stocks. Building a long term portfolio of direct stocks does take a lot of understanding of the economy, the industry and the business. You can get these only with experience and there is really no magic potion to make you an expert overnight. There is however, a way to get started on building a portfolio of stocks, while you gain this knowledge and experience over time. Is there a guarantee that you will not lose money if you follow my suggestion? Unfortunately not, but the chances of your losing money are indeed very slim.

Without further ado, let me give you the simple steps to what you need to do from scratch:-

  1. Choose the 5 sectors – Auto, Pharma, Banks, IT and Telecom. You can add other sectors at a later date.
  2. From each sector choose 2 market leaders. You can do it by their Market caps or the PE ratios. Honestly, it does not matter a great deal as to which method you are using as long as you are consistent in your approach.
  3. For people focused on names look at DRL, Cadilla, Lupin etc in Pharma. Tata Motors, Maruti, TVS Motors, M & M in Auto etc. SBI, ICICI, HDFC Bank in banks. TCS, HCL Tech, Infosys, Wipro in IT. Bharti, Idea in Telecom.
  4. Decide on a comfortable amount that you can spend every quarter on stocks related investment. Set price triggers based on 200 DMA of the stock. For example, if the 200 DMA of a stock is 3000 and the current market price is 3200 then set the first price trigger at 3000 or just below it.
  5. Stick to this discipline and never go beyond 20 % of your quarterly money in one go. You are in no hurry, wait for the stock price to drop. In the next 6 months there will be many ups and downs. Buy only on downs, let the ups go by without bothering too much.
  6. In a quarter there are bound to be many more bad days than 5, you just need to be patient.
  7. Remember you are building a long term portfolio, so even if you miscalculate and buy at a higher price it does not matter too much. In 10 years the markets will be far higher than 9000 on the Nifty.
  8. Keep adding to each stock regularly, do not start chasing other stocks that seem to be doing better.
  9. Increase your quarterly allocation based on your surplus availability and your comfort level.
  10. Stick to this for 2 years, by then you will have enough knowledge to get to the next level of risk.

Stock investment is like swimming, you will not do it by reading how not to do it. Get started with it and you will see how things work out at a portfolio level – remember, it will never work out for all stocks that you invest in. Also, next time someone advises you on how to pick stocks, ask him about his portfolio and how successful he has been in his own stock portfolio performance. Trust only advisers who put their money where their mouth is.

I will do other more involved posts on stock picking but this one is good enough for all new investors to get started.

My stock portfolio – the third set of 5

While most investors may be going through the MF route to buy equity as an asset class, there is a lot of interest in the stock portfolios of seemingly successful investors. This is amply demonstrated by the numerous requests I get for stock tips and readers wanting to know about my portfolio. In the last 2 post I had written about my top 10 holdings. Here I will write about the next 5.

The first in the list is ITC and some observations are below.

  • My motivation for buying the stock was to get a well run mass consumer company in my portfolio. I also have HUL but ITC has performed better over the years.
  • My first purchase was in 2006 August and the last in January 2015. I had also sold off some of my shares in the interim when it hit the figure of 400.
  • The stock has seen a lot of corporate action in terms of bonus and I too got benefited by a 1:1 bonus in 2010 and a 1:2 bonus in 2016.
  • It has normally been a good dividend paying company with 500 % to 850 % rates in the last 4 years.
  • In terms of potential, this is clearly one of the best examples of an Indian company which is benefited from the local consumption story. I think it is quite possible for the stock to double over the next 2-3 years, even with the challenges in the cigarettes business.
  • My investment in the stock is now at an average price of 98 Rs.
  • I do not have any real plans to sell the stock, now or in the near future.

The second in the list is Mindtree and some observations are below.

  • My motivation for buying the stock was mainly to invest in a relatively new IT services company run by a management that had great pedigree.
  • My first purchase was in July 2007 and the final one in September 2008.
  • The stock had declared a 1:1 bonus in 2014 and  in 2016.
  • It has normally paid good dividends in the range of  100 % and more.
  • In terms of potential, the company is facing serious challenges now and this is being reflected in the declining price. However, I think it will recover in this year and it is quite possible for it to reach 1000 levels in a couple of years.
  • My investment in the stock is now at an average price of 134 Rs.
  • I have no plans of selling this stock now or in the near future.

The third in the list is Hindustan Zinc and some observations are below.

  • My motivation for buying the stock was to have a commodity based company in my portfolio and this was one of the better run companies.
  • My first purchase was in 2007 June and the last in March 2009.
  • The stock has not seen corporate action in terms of bonus or splits after my purchases.
  • It has normally been a good dividend paying company and in the last 2 years the dividends have been 300 % and 400 %
  • In terms of potential, this is clearly one of the best examples of an Indian company which has dominated locally and well on course for it’s global journey now. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 542 Rs and it is about 5 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The fourth in the list is TCS and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the IT sector as a major global player.
  • All my purchases of this stock was between January 2008 and June 2009.
  • The stock had seen a bonus of 1:1 in June 2009.
  • It has normally been a great dividend paying company and mostly paid 45 Rs dividend per share in 2016.
  • In terms of potential, this is clearly one of the best examples of an Indian company which has gone global successfully. I think it is quite possible for the stock to double over the next 3-4 years, despite the obvious challenges.
  • My investment in the stock is now at an average price of 399 Rs and it is about 4 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The final one in the top 5 list is L & T and some observations are below.

  • I bought some convertible debentures way back in 1992 and this effectively got converted into shares at a value of 60 Rs.
  • The stock has seen bonuses in 2006, 2008 and 2013 where  my numbers went up and I also sold off some at a decent profit.
  • It has normally been a great dividend paying company at around 800 % and more.
  • In terms of potential, this is clearly one of the best examples of an Indian company having made it both locally and globally. I think it is quite possible for the stock to double over the next 2-3 years.
  • My investment in the stock is now at an average price of 20 Rs and it is about 4 % of my portfolio value at CMP.
  • Based on this purchase I also got shares of Ultratech Cement free 🙂
  • I do not have any real plans to sell the stock, now or in the near future.

As you will see from here, investing in good companies and holding them for a long period of time has really worked for me here. There are some other holdings I have that may be of interest to my readers. I will share it in a future post.

My stock portfolio – the next 5

While most investors may be going through the MF route to buy equity as an asset class, there is a lot of interest in the stock portfolios of seemingly successful investors. This is amply demonstrated by the numerous requests I get for stock tips and readers wanting to know about my portfolio. In the last post I had written about my top 5 holdings. Here I will write about the next 5.

The first in the list is Kansai Nerolac and some observations are below.

  • My motivation for buying the stock was to get a Paint company in my portfolio. As I wanted to get a growth oriented company I chose this over Asian Paints.
  • My first purchase was in 2008 January and the last in January 2009.
  • The stock has seen a lot of corporate action in terms of bonus and I too got benefited by a 1:1 bonus in June 2010.
  • It has normally been a good dividend paying company at 100 % and in the past 2 years this has gone up too.
  • In terms of potential, this is clearly one of the best examples of an Indian company which is benefited from the local consumption story. I think it is quite possible for the stock to double over the next 2-3 years.
  • My investment in the stock is now at an average price of 29 Rs and it is about 5 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The second in the list is TVS Motor and some observations are below.

  • My motivation for buying the stock was mainly to participate in the two wheeler segment and I chose it over Hero Motocorp.
  • My first purchase was in October 2006 and the final one in December 2006.
  • The stock had declared a 1:1 bonus in 2010.
  • It has normally paid good dividends in the range of 75 % to 100 % and in the last 2 years this has increased to 200 % plus.
  • In terms of potential, the company is poised to grow aggressively due to the aspirations of our population. It is quite possible for the stock price to double in the next 2 years or so.
  • My investment in the stock is now at an average price of 49 Rs and it is about 5 % of my portfolio value at CMP.
  • I have no plans of selling this stock now or in the near future.

The third in the list is Dr Reddy’s Lab and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Pharma sector and the focus it had on research as an Indian company.
  • My first purchase was in 2007 June and the last in March 2009.
  • The stock has not seen corporate action in terms of bonus or splits after my purchases.
  • It has normally been a good dividend paying company and in the last 2 years the dividends have been 300 % and 400 %
  • In terms of potential, this is clearly one of the best examples of an Indian company which has dominated locally and well on course for it’s global journey now. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 542 Rs and it is about 5 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The fourth in the list is TCS and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the IT sector as a major global player.
  • All my purchases of this stock was between January 2008 and June 2009.
  • The stock had seen a bonus of 1:1 in June 2009.
  • It has normally been a great dividend paying company and mostly paid 45 Rs dividend per share in 2016.
  • In terms of potential, this is clearly one of the best examples of an Indian company which has gone global successfully. I think it is quite possible for the stock to double over the next 3-4 years, despite the obvious challenges.
  • My investment in the stock is now at an average price of 399 Rs and it is about 4 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The final one in the top 5 list is L & T and some observations are below.

  • I bought some convertible debentures way back in 1992 and this effectively got converted into shares at a value of 60 Rs.
  • The stock has seen bonuses in 2006, 2008 and 2013 where  my numbers went up and I also sold off some at a decent profit.
  • It has normally been a great dividend paying company at around 800 % and more.
  • In terms of potential, this is clearly one of the best examples of an Indian company having made it both locally and globally. I think it is quite possible for the stock to double over the next 2-3 years.
  • My investment in the stock is now at an average price of 20 Rs and it is about 4 % of my portfolio value at CMP.
  • Based on this purchase I also got shares of Ultratech Cement free 🙂
  • I do not have any real plans to sell the stock, now or in the near future.

As you will see from here, investing in good companies and holding them for a long period of time has really worked for me here. There are some other holdings I have that may be of interest to my readers. I will share it in a future post.

My stock portfolio -5 top holdings

While most investors may be going through the MF route to buy equity as an asset class, there is a lot of interest in the stock portfolios of seemingly successful investors. This is amply demonstrated by the numerous requests I get for stock tips and readers wanting to know about my portfolio. I had written on this earlier but with the passage of time a few things have changed. So here is a list of my top 5 holdings.

The first in the list is Tata Motors and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Auto sector along with Maruti as Indian auto companies.
  • My first purchase was in 2007 February and the last in January 2009.
  • The stock has seen a lot of corporate action in terms of bonus earlier but I only witnessed a split in 2011.
  • It has normally been a good dividend paying company at 100 % but in the past 2 years this has come down considerably.
  • In terms of potential, this is clearly one of the best examples of an Indian company which has gone global successfully. I think it is quite possible for the stock to double over the next 2-3 years.
  • My investment in the stock is now at an average price of 109 Rs and it is about 8 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The second in the list is Palred Technologies and some observations are below.

  • My motivation for buying the stock was really the options I got as the CEO of Four Soft between 2007 and 2012.
  • These were mostly through allotments over these years.
  • The stock has seen a lot of corporate action in terms of capital reduction and split. Four Soft was also sold off to Kewill and the current business of Palred Technologies is completely different.
  • It has normally never paid dividends but on the selling of the company the shareholders got a special dividend, which for me amounted to more than 10 lacs.
  • In terms of potential, the company is one of the few listed Indian companies in the E-commerce portal area. However, it deals in relatively cheap electronic accessories and is in a low margin business.
  • My investment in the stock is now at an average price of 30 Rs and it is about 7 % of my portfolio value at CMP.
  • I do not see this as a long term success and may sell it whenever I need money.

The third in the list is Maruti Suzuki and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the Auto sector along with Tata Motors as Indian auto companies.
  • My first purchase was in 2007 June and the last in October 2009.
  • The stock has not seen corporate action in terms of bonus or splits.
  • It has normally been a good dividend paying company and in the last 2 years the dividends have been 500 % and 700 %
  • In terms of potential, this is clearly one of the best examples of an Indian company which has dominated locally and started it’s global journey now. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 678 Rs and it is about 7 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The fourth in the list is Infosys and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the IT sector as a major global player.
  • All my purchases of this stock was between June and November 2007.
  • The stock has seen a lot of corporate action in terms of two 1:1 bonuses in the years 2014 and 2015.
  • It has normally been a good dividend paying company and mostly pays dividends at 500 % and beyond.
  • In terms of potential, this is clearly one of the best examples of an Indian company which has gone global successfully. I think it is quite possible for the stock to double over the next 3-4 years, despite the obvious challenges.
  • My investment in the stock is now at an average price of 454 Rs and it is about 7 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

The final one in the top 5 list is M & M and some observations are below.

  • My motivation for buying the stock was it’s prominent place in the commercial vehicles sector, which is an important one for our economy.
  • My first purchase was in 2007 March and the last in January 2009.
  • The stock has seen a split in 2010 when the face value was reduced to 5 from 10.
  • It has normally been a good dividend paying company at around 200 % and more.
  • In terms of potential, this is clearly one of the best examples of an Indian company catering to a growing local demand. I think it is quite possible for the stock to double over the next 4-5 years.
  • My investment in the stock is now at an average price of 285 Rs and it is about 7 % of my portfolio value at CMP.
  • I do not have any real plans to sell the stock, now or in the near future.

As you will see from here, investing in good companies and holding them for a long period of time has really worked for me here. There are some other holdings I have that may be of interest to my readers. I will share it in a future post.

My stock choices for investment this Diwali

More than the new year or the financial year, traders in the stock market consider Diwali to be the beginning of their investment year. If you look at the performance over the last Samvat to this one we will see that the Sensex and Nifty have given about 10 % returns whereas the mid cap and the small cap index have given returns in excess of 20 %.

How will things work out for the next one year? From all indications the following outcomes are quite probable, with the normal caveat of all market projections being a hazardous game at the best of times:-

  • Nifty will probably be choppy through the year and end up with about a 7-8% gains from the current levels. 9500 will be a great level to achieve, I do not see Nifty crossing 10000 in 2017.
  • Mid caps are doing quite well now and will face a correction. Unlike in 2016, the next year will be the one where large caps will probably do better than mid caps.
  • Small cap index will continue to do well and will be the best performer.

Which stocks will be worth buying this Diwali with a hope of gaining at least 30 % and above in the next 12-18 months? I have been following a few of the good analysts and traders to understand what they are recommending and why. Based on that here are some of the stocks which are likely to do rather well. Make sure you do your own learning before you invest in any of these.

  • Kingfa Science
  • Rajratan Global wires
  • Cineline India
  • Jayant Agro
  • EPC Industries
  • Praj Industries
  • BEL
  • Vindhya Telelinks
  • CARE
  • Sadbhav Engg
  • ILFS Transportation
  • UCAL Fuel
  • KEC International
  • INOX Leisure
  • Indo National
  • Umang Dairy

While I have a few of these stocks I am planning to add some of these to the extent of 3-4 lacs between now and end of year, based on the right pricing levels. The idea will be to see if the investment can give an XIRR of about 18-24 % and double in the next 3-4 years. I plan to use the amount for a family vacation outside India for all 4 of us.

How do I know that such returns will be there? Well, I do not really but having looked at these stocks closely, it does seem to me that these companies will definitely have great chances of growth in the next few years.

MF managers are not yet into some of them, so go ahead and grab your chance while these are still reasonably priced. Wishing all my readers a very happy and prosperous Diwali.

My stock portfolio – highest return stocks

As readers know by now, I have 3 portfolios namely Debt, Mutual funds and stocks. My Debt equity allocation is roughly 1:1 and between stocks and MF it is about 3:2 in terms of the current portfolio. It is interesting to note that my investments in stocks and MF have been nearly the same over the years. This means that my annualised returns from my stock portfolio is considerably more than that of my MF portfolio.

This brings me to the reason as to why you must have both an MF and a stock portfolio. Stocks can grow from the underlying business doing well. However, they can also grow through bonus issues, splits, mergers, acquisitions and Value unlocking to existing shareholders. In fact, stocks where I have the highest returns are mostly through these routes. More on that latter but first let me outline how I measure the success of any stock in my portfolio. I understand that XIRR calculations will be the easiest way to do this but I just take the multiple by which the current price is to the average purchase price. This is as I have realised that over a long time period this is a pretty accurate measure.

With that said here are the highest multiples in my stock portfolio:-

  • HCL Tech, Adani Ports, CG Consumer, Reliance, Aditya Birla Fashion, L & T, Ultratech Cement where returns are from 200 times to 15000 times. This is clearly caused by the fact that I paid virtually nothing in acquiring these stocks. For example I got 66 HCL Tech shares as I has HCL InfoSystems shares. With Bonus and Split these have now frown to be 264 shares. I got Ultratech Cement as I was holding L & T shares.
  • Multiples of 75 through 125 are achieved in the following shares. The gains are due to selecting the right company at the right price as well as related corporate action such as bonuses and splits etc. 
    • Berger Paints
    • Kansai Nerolac
    • Titan
    • Cadila
    • Piramal Enterprises
    • BPCL
  • Multiples of 50 through 75 are achieved in the following shares.
    • Vinati Organics
    • Maruti 
    • PVR
    • Apollo Hospitals
    • Himatsingka Seide
    • TVS Motors
    • Apollo Tyres
    • TCS
    • Bata
  • Multiples of 25 through 50 are achieved in the following shares.
    • Arvind
    • DRL
    • Tata Motors
    • M & M
    • Petronet LNG
    • Greaves Cotton
    • HPCL
    • HUL
    • MRPL
    • Hindustan Zinc
    • Mindtree
    • Tata Chemicals
    • PC Jeweller
    • Bharat Forge
    • Sun Pharma

I am a little reluctant to provide actual figures but you will be able to understand the scale of the gains. Just as an example, my buying price in Berger Paints is 19.63 and the stock is trading at 262 now. Of course, I have had several spectacular failures too such as Unitech, Kingfisher Airlines, Teledata, Karuturi Global etc. On the balance things have worked out rather well and enabled me to achieve a state of Financial independence by the time my son had just started his Graduation course.

My recommendation is you start with a stock portfolio right now if you have not done so already. You have to do it on your own learning from Facebook groups or Blogs will not be enough. Start small if you are conservative at heart but do get started.

I knew very little about stocks when I did and it has really worked well for me.