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kmp_saij
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Joined: 19/Feb/2010
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   Posted: 30/Apr/2012 at 10:52pm |
Originally posted by ash7979
I think with 20-25 stocks you will feel lucky if you are able to outperform leading MF...as peter lynch said " if you can beat MF return with individual investing then you should go alone, otherwise why bother"...So, if you dont mind could you please share your CAGR return with these 20-25 stocks in last 2-3 yrs.. |
Hi ash7979,
First lemme come to performance part. If I benchmark my performance with leading MF and then take decision to go independently or not then I am sure I would have never gone alone. So I think best thing to benchmark is with your past performance combined with some outside beachmark(like Sensex, leading diversified MFs etc)
For example, If I have lost 10% in first yr vs 15% gain in Sensex that yr and then next yr if I gain 5% vs 15% gain in sensex, I would think I have been improved. That is my way to compare.
So now the question is NOT how we performed vs Sensex or MFs. But how much we have been improved and If we do not see improvement in initial 3-4 years then we have no business to be in investing ony our own or simply speaking game is not for us.
Now as I have reframed the question, Lemme answer straitghtly that over last 5 yrs I have not outperformed leading MF or even Sensex. But I have come a long way from where I was and there is still a long way to go. So if I keep outpeforming my past performance vis a vis Sensex, I will be more than happy.
Now lemme come to portfolio part. Now there is so much dicussion going on Concentrated vs Diversified portfolio on TED as well on many other forums/blogs, also lot of research has gone into it but there has not been "one size fits all" answer yet. so most debated topics are best left alone. 
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Own whatever’s feared, shun whatever’s beloved.
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prudentinvestor
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Joined: 23/Jan/2011
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Posted: 30/Apr/2012 at 2:49am |
Originally posted by kmp_saij
Now as I have reframed the question, Lemme answer straitghtly that over last 5 yrs I have not outperformed leading MF or even Sensex. But I have come a long way from where I was and there is still a long way to go. So if I keep outpeforming my past performance vis a vis Sensex, I will be more than happy.
Now lemme come to portfolio part. Now there is so much dicussion going on Concentrated vs Diversified portfolio on TED as well on many other forums/blogs, also lot of research has gone into it but there has not been "one size fits all" answer yet. so most debated topics are best left alone.
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same here  but I feel it is beneficial for investors to face a harsh bear market very early in their investing career. But as you said too, if one cannot beat the benchmarks or diversified funds over a period of time, then one may be better off compounding their money in MFs. I am using a NAV based portfolio performance measure over FY2011-FY2015, and if my portfolio is unable to beat the indices and diversified mfs over the span, will shift to mfs  Let's see. Nobody is suggesting a "one size fits all" approach, but unless you commit serious amount of capital to a few stocks, even if you find multibaggers in a 20-25 stock portfolio the impacts will be minimal at the portfolio level.
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"All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out..” - Peter Lynch
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ash7979
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Posted: 30/Apr/2012 at 9:42am |
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I didnt mean to say "one fit for all", but if you are committing "a large sum of money" then you ought to compare your performance with the leading MF or maybe with bank's FD return (which is close to 10-11% as of now) & companies like muthoot is offering even better ~13%/annum...
So, if you are in learning phase & not committed a "Serious" sums of money then you can ignore your under performance viz-z-viz leading MF or index or else you bound to compare whether its good to go alone with serious amount of money or go with expert...
Why I was interested to know your CAGR return with 20-25 stocks because I wanted to know whether one can achieve a decent 20-25% plus CAGR return with such a diversified portfolio...as I myself couldn't able to achieve such a return with my diversified portfolio in past & now my portfolio has single digit stocks ~7-8 & now I can see effect of concentration, I could achieve 30% plus return as of now (its absolute return not CAGR return, as my concentrated portfolio is less than a year old & I yet to see a prolonged Bear market with this concentrated portfolio)...
I feel for individual investor its better to take bet on particular sector & then pick market leaders from that sector, instead of buying stocks from across the sectors, which will bring down overall return in longer period of time...
Its matter of choice as peter lynch had ~150 stocks in his portfolio still he could able to achieve such a good return over period of time, but I feel even with such large portfolio size also he put money on particular sectors, instead of buying across sectors...
So in nutshell, its doest matter hoe many stocks you have in your portfolio, but how many sectors you cover with that portfolio & if you wanted to have ONLY say 3-4 sectors with 10 stocks then I would say, we should limit to 3-4 stocks while choosing market leaders from respective sectors & leaving 2 & 3 player (until unless leader is loosing mkt share i.e. Exide industry)...
my 2 cents..
Edited by ash7979 - 30/Apr/2012 at 9:48am
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Fear can hold you prisoner. Hope can set you free....
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kmp_saij
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Joined: 19/Feb/2010
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Posted: 30/Apr/2012 at 11:03am |
Originally posted by ash7979
Why I was interested to know your CAGR return with 20-25 stocks because I wanted to know whether one can achieve a decent 20-25% plus CAGR return with such a diversified portfolio...as I myself couldn't able to achieve such a return with my diversified portfolio in past & now my portfolio has single digit stocks ~7-8 & now I can see effect of concentration, I could achieve 30% plus return as of now (its absolute return not CAGR return, as my concentrated portfolio is less than a year old & I yet to see a prolonged Bear market with this concentrated portfolio)...
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But you can not attribute increase in returns only to concentration, with time your skill is improved and so your judgement so some part of returns migh have come from your skills/right judgments.
In my 20-25 stocks portfolio, capital allocation is not evenly distributed. So even though I claim it to be diversified it is concentrated in nature as 70-80% is allocated to 10-12 stocks only. so in effect it is like core/satellite portfolio strategy. So my portfolio is apparently diversified but concentrated behind the scene.
What I was trying to convey was as I am not very experienced and immature and so I am in experimentaion phase. So I need more no of stocks to learn more things about stocks market. Even though I will have small exposure to some stock I will be inclined to track it and sector it operates in it and over time I will learn some meaningful lessons.
Edited by kmp_saij - 30/Apr/2012 at 11:05am
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Own whatever’s feared, shun whatever’s beloved.
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kmp_saij
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Posted: 30/Apr/2012 at 11:15am |
Originally posted by prudentinvestor
I am using a NAV based portfolio performance measure over FY2011-FY2015, and if my portfolio is unable to beat the indices and diversified mfs over the span, will shift to mfs Let's see.
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I think individual investors with inclination to learn will beat all sensex/leading MFs over 5-10 yrs. Environtment will favor individuals as they have numerous advanatages over MFs and information on companies is readly accessible on Internet. But I am not predicting death of MF industry as there will always people (having less time or less inclined to learn) who need help of money managers.
Let us hope for best outcome & prepare for worst outcome
Edited by kmp_saij - 30/Apr/2012 at 11:17am
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Own whatever’s feared, shun whatever’s beloved.
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basant
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Posted: 08/May/2012 at 6:00pm |
| There was a fantastic opportunity so I approached my investors and told them I wanted to increase that amount. I ended up putting 75% of the fund in that investment and it worked out well. And I’m sure I will do it again. Don’t use leverage, and sit on cash if there are no good investment opportunities. - Warren Buffett |
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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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sumitraepic
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Posted: 10/Nov/2015 at 4:04pm |
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Before investment in the market, we have to check market strategy and all the fundamental and technical news, so that we can easily invest in the market.
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