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  • Four years as shareholder of Marico

    Four years ago after my thorough research I decided to invest in Marico (I realised embarrassingly late that Marico manufactures Parachute which I have been using for decades). This is how it has performed for me.

    Return

    The first year of my investment’s worth was flat with no gains; the second time I bought Marico after one year, it was at the same levels as the first time. But the next three years the share price has been steadily improving (except the COVID pandemic crash).

    Profit

    XIRR

    Post COVID pandemic crash, the share price has recovered and is at 15% XIRR. I am hoping it continues with that rate for coming years and provide me with inflation beating returns.

    NOTE: XIRR for initial months varies wildly and is not useful for any analysis. But once the investments complete minimum of 1 year, XIRR gives me a much better picture. So I calculate ‘XIRR (>1 year)’ which calculates XIRR only for the investments which have completed minimum of one year while ‘XIRR’ continues to calculate for all the investments irrespective of how much time has been completed. There are some periods where ‘XIRR’ and ‘XIRR (>1 year)’ calculate to the same amount as for that time all my investments had completed minimum of 1 year.

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  • You need to cut yourself some slack

    A wonderful article by Shane Parrish on why slack is so important. It’s so important there is a book about it–Slack: Getting Past Burnout, Busywork, and the Myth of Total Efficiency.

    …imagine one of those puzzle games consisting of eight numbered tiles in a box, with one empty space so you can slide them around one at a time. The objective is to shuffle the tiles into numerical order. That empty space is the equivalent of slack. If you remove it, the game is technically more efficient, but “something else is lost. Without the open space, there is no further possibility of moving tiles at all. The layout is optimal as it is, but if time proves otherwise, there is no way to change it.”

    Having a little bit of wiggle room allows us to respond to changing circumstances, to experiment, and to do things that might not work.

    Slack consists of excess resources. It might be time, money, people on a job, or even expectations. Slack is vital because it prevents us from getting locked into our current state, unable to respond or adapt because we just don’t have the capacity.

    Efficiency is the Enemy

    And at the end.

    Amos Tversky said the secret to doing good research is to always be a little underemployed; you waste years by not being able to waste hours. Those wasted hours are necessary to figure out if you’re headed in the right direction.

    Efficiency is the Enemy

    Wow!

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  • Three years as shareholder of Nerolac

    Three years ago after my thorough research I decided to invest in Nerolac. My research was so thorough that it was only on trying to buy the share I realised it is not Nerolac, its Kansai Nerolac. I have invested only thrice over these three years. Below is how the returns have been for me.

    Return

    Profit

    XIRR

    NOTE: XIRR for initial months varies wildly and is not useful for any analysis. But once the investments complete minimum of 1 year, XIRR gives me a much better picture. So I calculate ‘XIRR (>1 year)’ which calculates XIRR only for the investments which have completed minimum of one year while ‘XIRR’ continues to calculate for all the investments irrespective of how much time has been completed. There are some periods where ‘XIRR’ and ‘XIRR (>1 year)’ calculate to the same amount as for that time all my investments had completed minimum of 1 year.

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  • When to sell stocks?

    Probably the most practical set of examples on when to sell stocks from your portfolio by R Venkataraman writing for Economic Times.

    I have many stocks, which I am holding for years. I don’t look to optimise every stock, and I don’t think it is worth the time and effort. I am not a professional fund manager, and retail investors should ideally not waste time trying to optimise a portfolio. There will be duds and some stars and vice versa. The key is to emerge fine on an overall portfolio basis.

    I have sold shares when I need money to do something in the real world, which in my case, was real estate. If you don’t need to break the portfolio, please don’t.

    I have sold shares when I needed to sell X to buy Y. At that time, I evaluated all stocks, and picked the ones to sell, which in my opinion, would not do as well as the new entrant. I am not an active churner; this exercise happens rarely.

    I have sold shares when stocks were giving returns beyond my imagination, which happened this year. This is a new feeling for me because most stocks in my portfolio usually move slowly. This year, some of my stocks have risen vertically. So I have booked profits. I use a mental model, which is not very scientific. So don’t waste time trying to poke holes in it.

    Develop your own rule of thumb that makes you happy. I tell myself, sell 50% of the stocks, so that remaining stocks are free. This I learnt from my friend HM, who used an acronym SHAD – sell half at double – and let the rest run.

    Selling stocks? To do it or not to do is indeed a big question

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  • What’s in a name?

    It’s often said that the stock market’s main oxygen comes from sentiments and the share price has hit the roof for a company that has the word ‘Oxygen’ in its name despite its business having nothing to do with the life-saving gas — something in high demand due to the Covid-19 pandemic.

    The share price of Bombay Oxygen Investments Ltd hit its upper circuit limit ₹ 24,574.85 apiece at the BSE on Monday, with the maximum permissible gain of 5 per cent due to the stock being under surveillance. The same is the case with some other little-known stocks with ‘gas’ or ‘oxygen’ in their new or old names and all of them are being probed for any possible foul play.

    What’s in a name? A lot for stock market, if it’s ‘Oxygen’ in Covid-era!

    I mean… I can’t even… Kaun hain ye log? Kahan se aate gain ye log?

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  • Four years as shareholder of Motherson Sumi System Limited

    Four years ago I didn’t know what Motherson Sumi System Limited was and what it did. The only reason I invested in it was that 100+ other mutual funds had invested in it. If so many mutual funds have invested in it, then the company must be good. That was the only research I did. 

    After learning about some thing called as “dollar cost averaging”, I invested more amount when the price fell. After the price fell even more I stopped investing as I learned something called as “don’t try to catch a falling knife”. 

    It has been a roller coaster ride on this one. In the crash of Mar-Jun 2020 the worth of my investment was just 30%. And in the subsequent months it recovered and returned to positive value after almost 3 years. 

    Return

    Profit

    XIRR

    NOTE: XIRR for initial months varies wildly and is not useful for any analysis. But once the investments complete minimum of 1 year, XIRR gives me a much better picture. So I calculate ‘XIRR (>1 year)’ which calculates XIRR only for the investments which have completed minimum of one year while ‘XIRR’ continues to calculate for all the investments irrespective of how much time has been completed. There are some periods where ‘XIRR’ and ‘XIRR (>1 year)’ calculate to the same amount as for that time all my investments had completed more minimum of 1 year.

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  • Embrace the Grind

    An article worthy of putting on a refrigerator magnet so that I can read it every day.

    I often have people newer to the tech industry ask me for secrets to success. There aren’t many, really, but this secret — being willing to do something so terrifically tedious that it appears to be magic — works in tech too.

    We’re an industry obsessed with automation, with streamlining, with efficiency. One of the foundational texts of our engineering culture, Larry Wall’s virtues of the programmer, includes laziness:

    Laziness: The quality that makes you go to great effort to reduce overall energy expenditure. It makes you write labor-saving programs that other people will find useful and document what you wrote so you don’t have to answer so many questions about it.

    I don’t disagree: being able to offload repetitive tasks to a program is one of the best things about knowing how to code. However, sometimes problems can’t be solved by automation. If you’re willing to embrace the grind you’ll look like a magician.

    Embrace the Grind

    Read on for some amazing examples.

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  • Three years with Motilal Oswal Long Term Equity Fund

    Three years ago I went on a quest to save taxes by investing in something other than PPF. I invested in three ELSS funds and soon realised that it was too many. I have already blogged about my experience with DSP Tax Saver and L&T Tax Advantage. Here I will talk about Motilal Oswal Long Term Equity Fund, where I invested only for one year via monthly SIP.

    One significant activity during my SIP was that – this fund had invested in Manpasand Beverages and in May 2018, the auditor for Manpasand Beverages resigned sending the stock price into a free fall. I remember Motilal Oswal Fund sending an email explaining the situation.

    SIP Return

    I think, I think, the underperformance that started from Oct 2018 was a direct result of Manpasand Beverages fiasco.

    Profit

    XIRR

    I plan to sell off my entire holding in this fund by next year when all my units have completed 3 years and hope by that time the XIRR will have improved from current level of 12%.

    NOTE: XIRR for initial months varies wildly and is not useful for any analysis. But once the investments complete minimum of 1 year, XIRR gives me a much better picture. So I calculate ‘XIRR (>1 year)’ which calculates XIRR only for the investments which have completed minimum of one year while ‘XIRR’ continues to calculate for all the investments irrespective of how much time has been completed. There are some periods where ‘XIRR’ and ‘XIRR (>1 year)’ calculate to the same amount as for that time all my investments had completed more minimum of 1 year.

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  • 3 years as shareholder of Supreme Industries

    3 years ago I invested in Supreme Industries after my thorough research (I bought a plastic chair made by Supreme Industries and I liked it). After that I invested just two more times in the stock. Below is how the stock has performed for me over these 3 years.

    Return

    For first two years, the returns were pretty average. It was only during the uptick post Jun 2020, the stock has risen sharply and delivered good returns.

    Profit

    XIRR

    XIRR for initial months varies wildly and is not useful for any analysis. But once the investments complete minimum of 1 year, XIRR gives me a much better picture. So I calculate ‘XIRR (>1 year)’ which calculates XIRR only for the investments which have completed minimum of one year while ‘XIRR’ continues to calculate for all the investments irrespective of how much time has been completed. There are some periods where ‘XIRR’ and ‘XIRR (>1 year)’ calculate to the same amount as for that time all my investments had completed more minimum of 1 year.

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  • 4 years as shareholder of Greenply Industries

    4 years ago I invested in Greenply Industries after my thorough research (and I can’t remember what that research was). Over these 4 years I invested only two times. The result were underwhelming until Greenply spun off the medium density fibreboard (MDF) business into Greenpanel Industries and gave me Greenpanel shares in the ratio 1:1. Last one year of rise is all thanks to Greenpanel’s share price rally.

    Return

    The sharp uptick in Oct 2019 is due to me getting Greenpanel shares in 1:1 ratio.

    Profit

    After Jun 2018, I was able to see the worth of my investment in green only after Jan 2021.

    XIRR

    I think there is some problem with my XIRR formula, seems like if the worth of my investment goes down below a certain mark the XIRR simply calculates to zero.

    Update 5-Apr-2021: I was able to figure out the problem with my XIRR and fix it.

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