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Portfolio Check Up
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smartcat
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Quote smartcat Replybullet Posted: 05/Feb/2010 at 1:23am
- Even 27 P/E for Titan is OK. It has Marico, Apollo Hospitals and Page Industries for company. Stocks like these, along with other FMCG stocks and PSU banks give "stability" to my portfolio during corrections like the current one.
 
- Strategy is doing OK. When the portfolio value went over X for a brief period of time, I managed to sell Nestle, ITC, Astra Zeneca Pharma and Era Infra. Some part of the proceeds went into Shree Sakthi Paper Mills (7.2% div yield) while the rest went into debt funds.
 
- Because of the addition of debt and fall in equity in late Jan/Feb, 40% of my portfolio is in debt (from the earlier 33%) and 60% in equities. I haven't had a chance to get stocks I like at 6% div yield so far. So money isn't flowing into equity from debt yet. The market needs to fall more.
 
- Out of the nearly 100 stocks originally bought, 5 stocks churned out bad performances for 9mFY10.  All the stocks were picked mostly on past performances (rather than future prospects). The 5 loser stocks were Acrysil, NCL Industries, BoI, IOB and Karnataka Bank - all of which are out of the portfolio now.
 
Not bad huh? Around 5% duds so far, picking stocks based on past history. My dud percentage was a lot higher when I used to try and "look into the future".
 
 
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nikhil090
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Quote nikhil090 Replybullet Posted: 05/Feb/2010 at 11:05am
No doubt - There are others like Dabur, your Zydus wellness, Nestle etc also in the same league. Page should have been closer to 21-22 times had they not done that "extra" expenditure.

As regard your strategy, I have only one question. Do you think it would be possible to maintain 2 strategies - one based on growth and future outlook and other based on value,div yield and past performance. Normally the "allure" of growth investing is much higher than value investing which is most probably boring. I have not been able to successfully practice value investing till now and I keep on moving back to "growth" investing based on business fundamentals..


Edited by nikhil090 - 05/Feb/2010 at 11:07am
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smartcat
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Quote smartcat Replybullet Posted: 05/Feb/2010 at 11:47am

Actually, high P/E consumer stocks too were bought based on their past performance - but its just that it is a little bit easier to predict its future earnings.

"Growth" stocks are a part of the overall strategy. Such stocks have two "responsibilities" -
 
- To provide stability to the portfolio during corrections. Generally FMCG stocks do well in a bearish market.
 
- In a strong bullish market, FMCG stocks don't do that well. Meanwhile, small caps run amok. So the FMCG/high PE consumer stocks are good candidates for selling (when the portfolio value goes over X)
 
 
 
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Quote vaib Replybullet Posted: 06/Feb/2010 at 3:24am
smartcat ji can u tell which debt funds do you like ?? And any reason for the liking ...
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smartcat
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Quote smartcat Replybullet Posted: 06/Feb/2010 at 11:11am
Floating rate LT funds are the best for laid back debt fund investors. There is no risk of negative returns (unlike long term bond or gilt funds). Among fund houses, Birla Sunlife and HDFC have some of the best debt funds.
 
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Quote studentoflife Replybullet Posted: 07/Feb/2010 at 6:06am
Originally posted by smartcat

Floating rate LT funds are the best for laid back debt fund investors. There is no risk of negative returns (unlike long term bond or gilt funds). Among fund houses, Birla Sunlife and HDFC have some of the best debt funds.
 
Isnt it advisable to buy fixed income near peak of bull markets...since it will be cheap..vis a vis the dividends
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Quote smartcat Replybullet Posted: 08/Feb/2010 at 12:09pm

Buying debt funds make sense when banks and FIs start offering 8 - 10% interest rates, like in early 2008.

And yeah, the general wisdom is that when the interest rates climb up over a certain levels, it signals an end to the bull market.
 
 
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chriskb
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Quote chriskb Replybullet Posted: 09/Feb/2010 at 6:02pm
Watch out for Exit Loads (HDFC floater has 3% exit load if within 540 days) and Expense ratios.
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