Mutual Fund Updates
In 2023, my mutual fund portfolio zoomed by ~40%. This growth was majorly driven by the small cap funds.
As you probably know, I have a sizable portion of money invested in Parag Parikh Flexi cap fund. This fund also garnered ~37% return last year.
So, in short, small cap funds rallied and parag Parikh flexi cap fund gave a stellar return. Altogether, mutual fund portfolio did very well well.
Action on Last Year:
Last year, I invested a good amount of lumpsum in a small cap fund during May-June. It increased my allocation towards the small cap that time. And in the last six months, rally in a small cap further skewed my weightage on the small cap fund more.
Now:
While ending the year 2023, the allocation increased to 41% in the small cap.
I have started trimming my position at the small cap funds, and probably bring close to 25%. I am putting this money on Bank Nifty. Trimming will continue for some time and my position at Bank nifty will be built at the same pace.
Why Bank Nifty? If you see the PB ratio of Bank Nifty over five years, you will get the answer.
P.S. This action fits my risk-reward appetite, may not be suitable for you. Because each one of us is on a different journey. So, no buy or sell recommendation, as usual.
In 2023, my mutual fund portfolio zoomed by ~40%. This growth was majorly driven by the small cap funds.
As you probably know, I have a sizable portion of money invested in Parag Parikh Flexi cap fund. This fund also garnered ~37% return last year.
So, in short, small cap funds rallied and parag Parikh flexi cap fund gave a stellar return. Altogether, mutual fund portfolio did very well well.
Action on Last Year:
Last year, I invested a good amount of lumpsum in a small cap fund during May-June. It increased my allocation towards the small cap that time. And in the last six months, rally in a small cap further skewed my weightage on the small cap fund more.
Now:
While ending the year 2023, the allocation increased to 41% in the small cap.
I have started trimming my position at the small cap funds, and probably bring close to 25%. I am putting this money on Bank Nifty. Trimming will continue for some time and my position at Bank nifty will be built at the same pace.
Why Bank Nifty? If you see the PB ratio of Bank Nifty over five years, you will get the answer.
P.S. This action fits my risk-reward appetite, may not be suitable for you. Because each one of us is on a different journey. So, no buy or sell recommendation, as usual.
Sharekhan_Agri_Inputs_and_Specialty_Chemicals_Review_Muted_Q3,_Recovery.pdf
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Sharekhan_Agri_Inputs_and_Specialty_Chemicals_Review_Muted_Q3,_Recovery.pdf
Sold Asian Paints!
Today, I sold Asian Paints.
Reasons:
1. Asset creation in this industry intensified. This rate is faster than industry growth. Hence, the profitability of the sector will go down.
2. I still believe that Asian Paints will remain the strongest players for at least a decade. However, ROCE of Asian Paints will gradually absorb the shock. And when it happens, PE will continue to de-rate. If the profitability keeps up the pace, this de-rating will keep the stock price in consolidation. This is the bull case.
3. Bear case will include scenarios like, a price war in paint outbreaks rapidly and the margin takes a sharp hit. In this case, profit growth will slow down while PE de-rates even faster. Stock price corrects and swings in a price band for a longer time.
4. Though I love this business, I know that the business does not love me. I see the risk-reward ratio not favouring me. I remained uncertain and took a rational approach to take a sidestep and watch the show. Hence, exited.
Today, I sold Asian Paints.
Reasons:
1. Asset creation in this industry intensified. This rate is faster than industry growth. Hence, the profitability of the sector will go down.
2. I still believe that Asian Paints will remain the strongest players for at least a decade. However, ROCE of Asian Paints will gradually absorb the shock. And when it happens, PE will continue to de-rate. If the profitability keeps up the pace, this de-rating will keep the stock price in consolidation. This is the bull case.
3. Bear case will include scenarios like, a price war in paint outbreaks rapidly and the margin takes a sharp hit. In this case, profit growth will slow down while PE de-rates even faster. Stock price corrects and swings in a price band for a longer time.
4. Though I love this business, I know that the business does not love me. I see the risk-reward ratio not favouring me. I remained uncertain and took a rational approach to take a sidestep and watch the show. Hence, exited.
Was the Selling of AP a blunder?
Anonymous Poll
31%
Of course, Yes
39%
Not sure, will see
30%
Rational decision
I sold Relaxo more than a year now. Does it look like a mistake now?
Anonymous Poll
21%
Yes
62%
No
17%
Short time, so cannot comment
I did not sell Abbott India two years back and still own it. Does it look like a mistake now?
Anonymous Poll
25%
Yes
58%
No
17%
Have to wait and see
RBI cracks down on Kotak Mahindra Bank; bars onboarding new customers through online, mobile banking and issuing new credit cards
https://www.moneycontrol.com/news/business/rbi-bars-kotak-mahindra-bank-from-onboarding-new-customers-through-online-mobile-banking-issue-new-credit-cards-12707215.html
https://www.moneycontrol.com/news/business/rbi-bars-kotak-mahindra-bank-from-onboarding-new-customers-through-online-mobile-banking-issue-new-credit-cards-12707215.html
Paint companies Asian Paints and Berger Paints start slashing prices | Company News - Business Standard
https://www.business-standard.com/companies/news/paint-companies-asian-paints-and-berger-paints-start-slashing-prices-124051701296_1.html
https://www.business-standard.com/companies/news/paint-companies-asian-paints-and-berger-paints-start-slashing-prices-124051701296_1.html
Business-Standard
Paint companies Asian Paints and Berger Paints start slashing prices
Asian Paints Price Cut: Paint companies remain unperturbed with competition heating up
Election Results & Market
If daily ups & downs are bothering you, just check one month's data of Nifty 50.
Nifty 50 is hardly down by 2.5%. Most of your portfolio has not changed much over the last one month.
Volatility is the daily saga. Relax and ignore it like the advertisement on your online streaming.
If daily ups & downs are bothering you, just check one month's data of Nifty 50.
Nifty 50 is hardly down by 2.5%. Most of your portfolio has not changed much over the last one month.
Volatility is the daily saga. Relax and ignore it like the advertisement on your online streaming.
Regret
Equity investing is full of regret. In all cases, equity will offer you the space for regret.
If the stock goes down, the regret cloud forms easily.
If the stock goes up but doesn't go up as per your expectations, regret will overcast you.
If the stock runs up, you will regret why you have not bought more.
The best way to deal with it, is to accept all these feelings. These are the tolls for wealth creation journey.
And ignore one or two stock performances. Portfolio counts. Over the long term.
Equity investing is full of regret. In all cases, equity will offer you the space for regret.
If the stock goes down, the regret cloud forms easily.
If the stock goes up but doesn't go up as per your expectations, regret will overcast you.
If the stock runs up, you will regret why you have not bought more.
The best way to deal with it, is to accept all these feelings. These are the tolls for wealth creation journey.
And ignore one or two stock performances. Portfolio counts. Over the long term.
The Steady Winners
Think about a tree growing in your backyard. Every day, it looks almost the same, and you might not even notice its growth. But over the years, it becomes a mighty tree, offering shade, fruits, and a home for birds.
Similarly, some companies grow slowly and steadily. They don’t have sudden upgrades or earnings surprises, which might seem boring and predictable. However, this predictability means stability. Here’s why they’re powerful:
Reliable growth: Steadily increase their profits, giving you dependable returns.
Less Drama: There’s no roller-coaster of sudden highs and lows, reducing your investment risk.
Better Health: Less chance of getting addicted to check news frequently and help maintain your BP in check.
Long-Term Strength: Over time, their consistent performance leads to significant growth.
Imagine companies like PI Industries, HDFC Bank or Hindustan Unilever. They might not be in the news for explosive gains, but their consistent, reliable performance makes them powerful. (Not any recommendations or advice).
We often get lured by higher return and take risks unnecessary. Understand that you have to survive all the risks to reach the finishing line. Once you miss to tackle risk, you may be blown out of the game. The game is all about surviving here. If you have a longer time, lower Return is also fine. You will create wealth.
P.S. The first rule of Investing - Don't lose money. (Buffet)
Think about a tree growing in your backyard. Every day, it looks almost the same, and you might not even notice its growth. But over the years, it becomes a mighty tree, offering shade, fruits, and a home for birds.
Similarly, some companies grow slowly and steadily. They don’t have sudden upgrades or earnings surprises, which might seem boring and predictable. However, this predictability means stability. Here’s why they’re powerful:
Reliable growth: Steadily increase their profits, giving you dependable returns.
Less Drama: There’s no roller-coaster of sudden highs and lows, reducing your investment risk.
Better Health: Less chance of getting addicted to check news frequently and help maintain your BP in check.
Long-Term Strength: Over time, their consistent performance leads to significant growth.
Imagine companies like PI Industries, HDFC Bank or Hindustan Unilever. They might not be in the news for explosive gains, but their consistent, reliable performance makes them powerful. (Not any recommendations or advice).
We often get lured by higher return and take risks unnecessary. Understand that you have to survive all the risks to reach the finishing line. Once you miss to tackle risk, you may be blown out of the game. The game is all about surviving here. If you have a longer time, lower Return is also fine. You will create wealth.
P.S. The first rule of Investing - Don't lose money. (Buffet)
Good Corrections
Stock market corrections are a vital part of the investment journey. Without this, people will make unreasonable expectations from the market.
If a 2-5% drop makes you uneasy, take a step back and look at the returns over 3 to 6 months. Keeping a broader perspective can help you stay calm and focused on long-term goals.
If you have been investigating for the last 2-3 years, you have made money. Probably, this is the time to take a look and think allocations based on valuation matrices.
P.S. More than activities, rational thinking works better in the stock market.
Stock market corrections are a vital part of the investment journey. Without this, people will make unreasonable expectations from the market.
If a 2-5% drop makes you uneasy, take a step back and look at the returns over 3 to 6 months. Keeping a broader perspective can help you stay calm and focused on long-term goals.
If you have been investigating for the last 2-3 years, you have made money. Probably, this is the time to take a look and think allocations based on valuation matrices.
P.S. More than activities, rational thinking works better in the stock market.