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To start with the positives

  • I managed to beat the market as well as the BSE midcap, Smallcap and BSE500 returns by a reasonable margin.( Concentrated Portfolio = 28%, Diversified = 25% vs around 9% for Nifty)
  • Portfolio churn among Emerging stocks was quite low as my selection of stocks was good. Cera, Supreme Industries, Kaveri Seeds, Kajaria, Mayur Uniquoters, SCUFL, ING Vysya, Fluidomat and Orient Refractories continued to do well.
  • I did take several tough decisions – including cutting weights of some of my core ideas(based on valuation concerns) as well as exiting some stocks when better options emerged.
  • I did a fair bit of work on smaller stocks & in sectors that I normally avoid(e.g pharma). In particular I figured out(finally after nearly everyone else did!) that Indian pharma had a lot going for it for next several yrs. Added Lupin & IPCA as core positions.
  • While I haven’t chased cyclical’s like everyone else my portfolio remains fairly well positioned to outperform once the economy gets back on track in the next 18 months.
  • I did bail out of stocks when my assumptions about them turned up false. e.g Exide’s q1 sales growth soon tapered down in q2. Back to losing mkt share again.
  • I did carry out a more detailed comparison of available options before buying any new stocks.

Since I don’t want to depress myself at the yr end so only listing the major disappointments 😉

  • I did panic when financials crashed post Subba Rao’s emergency moves. Sold out a big chunk of ING Vysya for no apparent reason(It’s not a wholesale funded bank like Yes Bank). Thankfully better sense prevailed & I bought quite a bit of it back…not all though 😦
  • I waited too long to sell my core holdings when working environment worsened for the medium term(Titan) or better options came to light(HDFC vs Britannia).
  • I took too long to cut financials in a sticky high inflation/interest rate environment. Started the yr at 27% of portfolio & only now cut to more realistic levels at 18%.
  • I continue to sell out/reduce positions in growth stocks too early. Despite experiencing that in bull mkts valuations do run up much more than you can predict. And often co’s hitting a sweet spot do surprise on the positive  with earnings.
  • I didn’t read too many books despite resolving to do so last yr. My to-read list keeps on piling up.
  • I still don’t keep proper records of my investment rationale for both buying into or staying away from companies. This leads to a lot of repetitive work when I have to rethink my positions in light of changed environment.

This yr I hope to become more organized with my investment process and keep trying to maintain the intrepid nature that an independent private investor needs to venture into the world of less researched companies.

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