The subscription service for “Follow My Portfolio” involves the following features:
- Update by email about all the future transactions (buy as well as sell) in my portfolio at the end of the day of the transaction (after market closing hours) during the period of the subscription. The email update would contain the details of the stock bought/sold and the price at which the transaction was done.
- Access to the premium section “My Portfolio” containing updated details of my portfolio and all the buy/sell transactions since the start of this service (July 30, 2016) until date, during the subscription period.
- “Follow My Portfolio” service is an information service and not an advisory service. In it we intimate subscribers about our portfolio allocation and transactions. We are not able to provide portfolio advisory, portfolio allocation and creation, stock selection, stock buying targets, selling targets etc as part of “Follow My Portfolio” Service.
My stock portfolio has its origins in August 2011, when I invested my initial savings from my first job after MBA (2009-11). I have been able to invest in some of the fundamentally good stocks at the initial stage of their growth phase, which were later on discovered by research/brokerage houses and witnessed investments from institutional investors.
The recognition of stocks by key market players have helped to generate significant gains for the portfolio as the underlying stocks got rerated and increased in value. A few such examples are: Ambika Cotton Mills Limited, Vinati Organics Limited, Mayur Uniquoters Limited etc.
I started investing in Ambika Cotton Mills Limited in September 2014, when it was trading at very low valuation levels. The stock was later on identified by the well-known value investor Prof. Sanjay Bakshi, who invested in it through his fund “ValueQuest India Moat Fund Ltd” in March 2015.
Similarly, other stocks like Vinati Organics Limited and Mayur Uniquoters witnessed increased FII buying and thereby generated good returns by increase in share price. The increased FII buying led to the P/E ratio of Mayur Uniquoters increasing from 6.6 to above 30 and P/E ratio of Vinati Organics increasing from 7.7 to above 20. This increase in valuations led to significant increase in the contribution of these stocks in the portfolio returns.
Updates on portfolio performance as on March 31, 2018:
- I started building the portfolio on August 8, 2011, on joining my first job after MBA (2009-11). Since then, the portfolio has generated an annualized return (CAGR) of 47.59% against CAGR of Sensex of 10.48%
- During FY2018, the portfolio has generated returns of 12.66% against an increase in BSE Sensex of 11.34%.
- During FY2018, We had a total of 51 transactions in the portfolio. All of these transactions were buy transactions and we did not sell any stock during FY2018.
The below table contains the yearly performance history of the portfolio:
This premium service has been commenced as an information source for the investors who wish to know about the stocks that I am buying currently or the stocks that I have sold recently.
However, there are certain key points of this service:
- The key essence to focus is that “Follow My Portfolio” service is an information service and not an advisory service. In it we intimate subscribers about our portfolio allocation and transactions. We are not able to provide portfolio advisory, portfolio allocation and creation, stock selection, stock buying targets, selling targets etc as part of “Follow My Portfolio” Service.
- The intimation to investors would always be after closing of the market hours on the day on which I have done any buy/sell transaction.
- There is no provision of any research report/recommendation note to be published/made available to investors as this service is to provide a glimpse to the investors into my personal portfolio management and related actions. For more details, please read the answers to the frequently asked question (FAQs).
- This service has been designed to act as an information source to subscribers about the composition of my portfolio and the stocks that I am buying/selling currently. This is purely an information source and services like advising individual clients on portfolio allocation etc. is not a part of this service.
- I would not be able to provide responses to questions about specific stocks in the portfolio and specific buy/sell decisions.
- This service does not include intimating the subscribers in advance about the buy/sell decisions that I would take about specific stocks.
- Important Disclosure: We disclose the details of the portfolio of my family (my wife and I). My wife, due to her association with Newgen Software Technologies Limited (Newgen) has been allotted shares under their employee stock options plan (ESOPs). Our holding and transactions in the shares of Newgen are covered under the insider trading guidelines of SEBI, Newgen as well as other company policies of Newgen Software Technologies Limited. Due to restrictions applicable under the above mentioned insider trading and other policies, we find ourselves unable to do the dissemination of our holding and transactions in the shares of Newgen Software Technologies Limited. Therefore, we would continue to disclose our equity portfolio composition, transactions and portfolio performance updates, consisting of my & my wife’s portfolio excluding the position in the shares of Newgen Software Technologies Limited. At any point of time, subscribers should note that we may have positions in the shares of Newgen Software Technologies Limited.
Please read the frequently asked questions and their responses: Click Here
Please read the key instructions to the subscribers of this service: Click Here
The information about composition of the portfolio to be available in the following format:
|Name of the Company||% age of portfolio (current price)||Market Price (₹)||Average Cost Price (₹)||First Buy Date||Latest Buy Date||Lowest Buy Price (₹)||Highest Buy Price (₹)|
The details of all the buy/sell transactions since the start of this service (July 30, 2016) until date in my portfolio to be available in the following format:
|Date||Name of the Company||Buy/Sell||Share Price (₹)|
Whenever I will do any buy/sell transaction in my portfolio, an email notification would be sent to subscribers at the end of the day, which would contain the information in the following format:
Date | Name of the Company | Buy/Sell | Price (₹)
Key instructions to subscribers:
- This is a subscription service. The access to premium features of this service would lapse after subscription period gets over unless the renewal is done.
- Once this premium service is availed, then there is no provision of any refund of the fee or the cancellation of the service during the period of subscription.
- Please take note that “Follow My Portfolio” service is an information service and not a investment/portfolio advisory service.
- Please add our email ID: firstname.lastname@example.org in your email contacts so that our email are not filtered by Gmail/other email providers as promotions/social/spam.
- Some investors have reported that Gmail sends our transaction update emails into “Promotions” section of the inbox. If this is the case with you, then we request you to drag our email and drop it on “Primary” tab. Gmail will ask whether you wish to get all our future emails in Primary section, then please click “Yes”. Henceforth, all our emails would be delivered to inbox in “Primary” section.
For all the details about this service, we recommend that you read the following article: Follow My Portfolio with Latest Buy/Sell Transactions Updates (Premium Service)
Frequently Asked Questions (FAQs)
Q. Why no research report/investment note is being provided as part of the premium service?
The condition of no research report/investment note has been put after considerable thought. This service has been deliberately kept only like a window giving a glimpse of my portfolio transactions
An investor would appreciate that the major difference between an institutional investor/portfolio manager and an individual investor is that the individual investor is not answerable to anyone but herself for her trades. On the other hand, a portfolio manager is questioned every quarter about the turnout of her investment thesis and her performance. Such continuous scrutiny brings out defensive behavior, which in turn leads to defensive investments. As is said, if you lose money in IBM (Reliance in Indian parlance), then you are not questioned, IBM is questioned.
Being an individual investor managing her personal portfolio provides the investor with the freedom to ignore all the pressures & scrutiny and act solely based on her own conviction. If I see my own portfolio management in the past, I initially bought Manappuram at ₹52 and held it and bought more all the way down till ₹10. It’s the result of staying true to my own conviction that today I am able to control my emotions and get the benefit when it has moved up to ₹80. Had I been answerable to people by delineating a fixed hypothesis of holding a position, then it would have brought in defensiveness and I don’t know whether I would have been able to manage my portfolio the way I did.
An investor may read about more such examples of my experiences with different stocks in the following article: Trading Diary of a Value Investor.
An investor following fundamental analysis would notice that once she starts studying financial numbers about any company, then she is doing something that all the well informed investors (say about 5% of all the market participants), are doing as the same set of financials and ratio are available to everyone. What investors think beyond financial numbers, is something which differentiates them. This factor of “something beyond numbers” leads to investing being an art and not science.
The art factors constitute multiple things: emotional stability, gut feel and many times a plain hunch. These subjective factors are very difficult to quantify in terms of framed hypothesis for holding stocks and much less be tracked on a regular basis. But these are the very factors, which finally matter in equity investing.
Many times, without meeting the management of a company, we have our own reasons to trust that they constitute good, shareholder friendly management. Some of these reasons are objective but many are subjective & diffuse. I believe that until the time I do not put out these diffuse reasons in front of everyone for judgment, I am able to act true to my conviction and bring originality in my equity investing approach. The moment I start getting the feeling that I am being judged on my reasons, then the originality would go away.
I want the subscribers to get access to my original equity investing decisions. The investors may or may not act on updates of my portfolio transactions. That is always an investor’s prerogative.
In the process to maintain the true freedom of action without getting influenced by deep seated human desire of being proven right every time one says something, I have decided not to give any reasons for my portfolio actions. In the process, it is felt by some investors that the service seems incomplete, then I accept this feedback, but would reiterate that the service has been designed in this way deliberately and after due thought process.
Q. Are you registered with SEBI?
Yes, I am registered with SEBI as an Investment Adviser under SEBI (Investment Advisers) Regulations, 2013.
Q. Does this service include portfolio management services or guidance about portfolio creation i.e. suggesting what percentage of capital should be allocated to different stocks?
This service has been designed to act as an information source to subscribers about the composition of my portfolio and the stocks that I am buying/selling currently. This is purely an information source and any further personalized services like advising individual clients on portfolio allocation etc. is not a part of this service.
Financial planning and portfolio creation services require in-person interactions with clients to understand their financial position and income & expense details, risk taking attitude & ability, which we do not provide currently. However, if in future, we start one to one personalized services like portfolio management services, then that would be a separate service and we would update about the same on the website.
Q. What are the regulatory guidelines to control conflict of interest for this service?
This premium service is envisaged only to be an information source to the investors who wish to know about the stocks that I am holding/buying currently or the stocks that I have sold recently. Any form of research report/investment note, opinion about stocks etc. has been specifically excluded from the scope of this service. This service is not an advisory service to clients.
However, we are following the requirement stipulated by SEBI in the SEBI (Investment Advisers) Regulations, 2013:
“An investment advisor shall not enter into transactions on its own account which is contrary to its advice given to clients for a period of fifteen days from the day of such advice.
Provided that during the period of such fifteen days, if the investment adviser is of the opinion that the situation has changed, then it may enter into such a transaction on its own account after giving such revised assessment to the client at least 24 hours in advance of entering into such transaction.”
Therefore, if I decide to reverse my position of buy or sell in any stock of my portfolio, from the position taken by me within previous 15 days, then before entering into such reverse position, I would send an email notification to all the subscribers at least 24 hours before I enter into such transaction in my portfolio.
Q. How many stocks do you have in your portfolio currently (at July 30, 2016)?
I currently have 5 stocks in my portfolio. I prefer to keep on investing money in the existing stocks in my portfolio until all of them have appreciated more than my preferred buying valuation range. I have experienced that on an average I have needed to find one new stock each year to be added to the portfolio.
Q. How long are you holding the stocks in your portfolio?
The longest held stock in the portfolio is from 5 years and the shortest held stock is from about 9 months (at July 30, 2016).
Q: How often do you churn your portfolio in a year i.e. making new purchases or selling off some existing investments?
My experience shows that on an average I add one new stock in my portfolio in a year. This is the pattern since last 3-4 years. However, the number of buy transactions are frequent. Similarly, I have experienced that I had to sell one company from my portfolio in each year due to various reasons.
Q. What if we subscribe to this service and there is no addition to your portfolio in the next one year? I am asking this since the stocks in your existing portfolio may not be good picks for us at the current price point, so the only way to profit / benefit for us would new stock additions. I know it is hard to find a right pick, but can you give us an idea so as to how many stocks we can expect to be picked in the next one year horizon?
My experience until now reflects that out of the 5-6 stocks that I usually have in my portfolio, about 2-3 of them are usually within the buying range/keep hovering around the buying range. As during the year, stock prices fluctuate a lot (for most stocks 52 week high is almost double of the 52 week low), the buying opportunities keep getting generated in these stocks during the year. Following my portfolio and transaction updates would let the investors know, which stocks of my portfolio are within my buying range at any point of time.
As mentioned by me in various articles on this website, I prefer exhausting the buying opportunities in existing stocks before I look forward to adding new stocks in the portfolio, therefore, most of the investments during the year go into these 2-3 stocks that are near buying range. Only when none of the portfolio stocks are near buying range or only when any mouthwatering better bargain is available outside the portfolio, then I add a new stock in the portfolio. If this is not the case, then I might not choose to add any new stock in the portfolio. My experience until now shows that I have needed to add about a new stock each year, however it may or may not hold true for future. I might add more new stocks in next one year or might not add any new stocks, depending upon how the valuation levels are.
Q: How many buy/sell transactions do you do in your portfolio in a year? In other words, how many email updates of future transactions should we expect to receive?
I invest whenever I have money to spare. Earlier, when salary was only source of income, then it was usually one buy transaction after salary credit in the month coupled with intermittent buys whenever I got spare money mid of the month, like dividends etc. Now with premium features of blog starting to contribute, the buy transactions would be frequent. May be once every week depending upon valuation level of target stocks.
Sell transactions are relatively few. May be one sale once in a year.
Q: When you buy additional stocks of any company, which is already a part of your portfolio, then the current market price of the stock can be different from your average cost price.
- If the current market price of the stock is higher than your average cost price, then what do you think before buying additional stocks? Do you buy it because, you think that despite buying at a higher price, your average cost price will still be lower than the current market price? Or you buy because you think that the stock is a good buy at current market price?
- If the current market price of the stock is lower than your average cost price, then what is your thought process before making the buy decision? Do you buy additional stocks only to bring your average cost down without looking at fundamentals? Or you buy additional stocks because you believe that the company’s fundamentals are intact and it is becoming attractive to buy more stocks at current market price?
While buying additional stocks of any company, which is already a part of our portfolio, we look at the current market price and see whether the company is an attractive investment opportunity at the current price. We do not give any thought to our average cost price while making additional purchases.
If the current stock price is higher than our average cost price but the company is still an attractive buy at current price, then we would buy it stocks. If the current price is lower than our average cost price (i.e. our investment is running in a loss), but we believe that the fundamentals of the company are intact and it is an attractive buy in the current situation, then we buy additional stocks of the company at lower prices.
In any situation, our focus is on the fundamentals of the company and its valuations at the current market price. We do not give any thought to our average cost price in our investment decisions.
Q. How much return do you expect to make from your portfolio/stock next year/in future? What is the target price that you have in mind for any stock in your portfolio?
We do not keep any return expectations! This is due to following reasons:
- stock have the habit of not responding even to good business performance for years altogether and
- when good stocks rise on recognition by the markets, then there is no limit to what extent they may rise.
So, we choose to invest in stocks, which we feel are fundamentally good and stay with them without any return expectations.
Q. Will you always exit one stock yearly due to various reasons?
The answer to the FAQ above mentions that “Sell transactions are relatively few. May be one sale once in a year.”
This sales frequency is something that I have observed in my portfolio in the past. It is simply a co-incidence. It is not a rule that under all circumstances I need to sell one stock every year.
If the stocks are performing well, then I may not sell any stock for many years and if the fundamentals of more than one stock change, then I may sell more than one stock in a year. The sell frequency depends on what situations the future presents.
Q. A sell decision of a stock may be due to either the deteriorating fundamental position of the company or due to personal financial needs of the investor. How would the subscribers come to know whether the sell decision is due to personal reasons or related to deteriorating fundamentals of the company?
Usually, whenever the fundamentals of any company deteriorate, then the entire stock position is sold off whereas if an investor needs to take out some money from the portfolio for personal needs, then only the partial position which suffices the monetary requirement is liquidated.
However, I would intimate the subscribers whenever the sale is because of personal reasons, which are not related to fundamentals of the underlying company.
Q. Would you be sharing your complete portfolio and transactions or partial?
Important Disclosure: We disclose the details of the portfolio of my family (my wife and I). My wife, due to her association with Newgen Software Technologies Limited (Newgen) has been allotted shares under their employee stock options plan (ESOPs). Our holding and transactions in the shares of Newgen are covered under the insider trading guidelines of SEBI, Newgen as well as other company policies of Newgen Software Technologies Limited. Due to restrictions applicable under the above mentioned insider trading and other policies, we find ourselves unable to do the dissemination of our holding and transactions in the shares of Newgen Software Technologies Limited. Therefore, we would continue to disclose our equity portfolio composition, transactions and portfolio performance updates, consisting of my & my wife’s portfolio excluding the position in the shares of Newgen Software Technologies Limited. At any point of time, subscribers should note that we may have positions in the shares of Newgen Software Technologies Limited.
Details of the stocks in the portfolio as per the disclosed format, are shared with the subscribers. Absolute amounts of portfolio/stock holdings in INR are not disclosed. Percentage holding of each stock in the portfolio at market prices is disclosed.
Transactions are regularly updated on the portfolio page as per the format shared. Moreover, as part of this service, details of every new transaction would be shared with subscribers at the end of the day. Details of a buy transaction done today (August 1, 2016), have been shared with subscribers by email today at about 8:00 PM.
All the best for your investing journey!
Dr Vijay Malik
P.S. Please note that the information received through this premium service is for sole use of the subscriber and is not to be shared with anyone else.