naveegator.in

Category: Equity

  • Buy and hold

    When I first started investing in equities, I decided to follow buy and hold strategy. I will buy quality companies and hold them for long term. There will be periodic reviews and some exceptions, but more or less very limited selling. Rather, slowly build position in quality companies. 

    Thanks to Birla, this strategy is now being put to the test.

    Birla first targeted Asian Paints with the launch of Birla Opus Paints. The mere announcement of their entry into the paints business—and their subsequent doubling of investment—sent Asian Paints’ stock price tumbling. And with it, my returns in Asian Paints. Asian Paints is part of my buy and hold portfolio, a decision which was made looking in the rear view mirror. Not the best way to make investing decisions.

    And today, Birla announced that they will be entering wires and cables business, directly competing with Havells and Polycab—two stock I own. Both, Havells and Polycab, have been consistent outperformers against Nifty indices, though my investment in them was relatively small. But it still stings that this news wiped off 6% and 18% of their market caps, respectively. I stayed put with Polycab even amid reports of a ₹200 crore tax evasion. But Birla’s latest move unnerves me.

    I thought buy and hold will be simple. But it is now that I realise—in buy and hold, taking no action is also an action in itself. And more often than not, you will be taking no action.

  • Five years as shareholder of D Mart

    Captain Raymond Holt—from the American television series Brooklyn Nine-Nine—describing what he has written for the speech to give at the funeral for Captain Seth Dozerman. Captain Holt is in fact describing his current emotional state after being assigned to the PR department where he spent weeks debating the name of the department’s mascot, which is a pigeon. And the reason I went ahead and put so much irrelevant information in this caption is that I have little to say about my journey with D Mart, except for—PAAAAAAAINNNNNN!

    When I first invested in D-Mart, it had already surged over 600% from its issue price of ₹295. A dream run of nearly three years. I believed this dream run would last forever. While I was right for the first two years, in 2022 the dream run ended. And with it came a great deal of—in the words of Captain Raymond Holt—PAAAAAAAINNNNNN!

    You see, when you buy in at the higher end of valuations—had I understood valuations back then, I wouldn’t be writing this—the slightest bit of bad news can trigger sharp declines. That’s exactly what happened in 2022. And since then, it seems the bad news just hasn’t stopped coming.

    My XIRR went from a positive 70% to a negative 10% in 5 months—Dec’21 to May’22. While global economic factors played a role, a significant part of this drastic decline was my decision to buy the dip.

    Post 2022, the returns—most of the time—have been hovering below zero. There was brief moment from Apr’24 to Sep’24, when the XIRR went to 20%, but it quickly fell of the cliff due to FII sell off and threat from quick commerce.

    My investment in D Mart is very young, with 80% of it made in the last three years. So I have a long way to go. Whether it leads to rewards or lessons—only time will tell. For now, I only have lessons.

  • Seven years as shareholder of Colgate-Palmolive (India) Limited

    • Investment through the years
    • Returns and Dividends
    • Profit Percent
    • XIRR

    FY 2017-18

    In the early days of my equity investment journey, I was looking for companies to invest in by focusing on those whose products I used. These companies—for me—were familiar, established, and likely to have been in business for a while. That’s how Colgate landed in my portfolio. The initial investment was not significant as I was dipping my toe in the water. 

    FY 2018-19

    I did not make any investments in Colgate this year. But I did receive dividends  on the small investment that I made in the previous year. The dividends—at cost—were impressive, at least impressive than the puny dividends from other companies which never crossed 0.5%.

    FY 2019-20

    If I wanted to earn more dividends, I had to invest more—that was my logic. So, I increased my investment in Colgate, and it paid off. At one point, my XIRR was soaring above 30%. But then, disaster struck—Covid.

    FY 2020-21

    The Covid lockdown caused markets to spiral downward. I—thankfully—was able to keep my job. This enabled me to continue my investment journey in Colgate. The recovery was pretty quick, and by the year-end the returns were decent, though they underperformed all major indices.

    FY 2021-22

    The underperformance from the previous year continued and by the year-end my XIRR was in single digits. I was getting fixed deposit returns. Moreover, I did not make any new investments. 

    FY 2022-23

    The underperformance from the previous year again continued and by the end of the year my XIRR went down further. I wasn’t even beating fixed deposit returns this time around. Despite this, I still had some faith in Colgate and decided to make additional investments.

    FY 2023-24

    This was the resurgence year for Colgate—and for my patience in the stock. The stock moved up and so did my returns. My investment went from XIRR of 4% to 20% by year-end. I was beating most indices and matching some. 

    FY 2024-25 (on going)

    The resurgence from the previous year continued. And for a fleeting moment my investment in Colgate was beating all the major indices. I was looking at an impressive 27% XIRR. And then FII sell off happened. 

    Remember that scene from Munna Bhai M.B.B.S. where Sunil Dutt finds out that Sanjay Dutt is not a doctor.

    Bas Parvati bas! Umar beet jaati hai izzat kamane main. Aur tere bete ne…

    बस पार्वती बस! उमर बीत जाती है इज़्ज़त कमाने मैं। और तेरे बेटे ने…

    Those were my emotions. The decline was so sharp that—when plotted for profit percent—it appeared as a straight line.

    And that’s how my journey has been so far. Hoping to stay invested for one more year and write again about this next year.

  • Four years as shareholder of Alkem Laboratories

    Four years ago, I made the decision to invest in Alkem solely based on its inclusion in the Nifty Next 50 index. It was in September 2020 that Alkem was included in the Nifty Next 50 index1. Without conducting any further research, I relied on the belief that companies included in Nifty Next 50 index are generally considered to be well-established and stable. And, there is a high chance of them moving to Nifty 50 index.

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  • Four years as shareholder of SRF

    I started invest in SRF four years back, but it is only in the 2023-24 fiscal year that I have significantly increased my investment in SRF. My investment is still very young.

    During the initial days my investment in SRF was comfortably beating Nifty Next 50 Index. But as I decided to increase my investment and SRF’s share price going sideways, I am now getting handsomely beaten by Nefty Next 50 index. But I am in this for the long haul. Let’s see how long I can go!

    Investment through the years

    Returns

    Profit

    XIRR

    Related reading:

  • Seven years as shareholder of ITC

    When I first invested in ITC, I was just testing the waters of equity investing. Over time, I realized that ITC is a rather polarizing stock. On one side, there are the die-hard fans who swear by it, and on the other, there are the critics who never miss a chance to poke fun at it. And, to be honest, some of those jokes are pretty clever. Don’t believe me? Just Google ‘ITC meme’ and get ready for a good laugh.

    In the early years, my investments in ITC were quite small. It wasn’t until the stock began performing well that I significantly increased my investment. Looking back, I realize I should have done the opposite!

    The dividends remain strong, though they’ve dipped slightly compared to the initial years. Currently, I’m outperforming the Nifty 50’s XIRR by just 1%.

    ITC’s announcement of demerging its hotels business hasn’t had any noticeable impact yet, either positive or negative. We’ll have to wait and see what happens when the demerger actually takes place.

    Investment through the years

    Returns

    Profit

    XIRR

    Related reading:

  • Six years as shareholder of Havells

    Investment through the years

    Returns

    Profit

    XIRR

    Related reading:

  • Historical stock composition of Nifty 50 and Nifty Next 50

    I was trying to understand the historical stock composition of indices like Nifty50. I tried searching the data on the internet but couldn’t find anything. After posting my query on multiple forums, I got a direction from my query on Money StackExchange.

    NSE provides the historical stock composition on Nifty 50 and Nifty Next 50 indices on Nifty Indices by selecting “Archive of Daily/Monthly Reports → Market Capitalisation, Weightage, Beta for Nifty 50 and Nifty Next 50”. However, the data is shared month-wise and not consolidated. I wrote some quick and dirty utilities to scrape off data and consolidated it in a Google Sheet.

    In the ‘Nifty 50’ and ‘Nifty Next 50’ worksheets, you can see when a stock entered and exited the index (e.g., Axis Bank joined the Nifty 50 in March 2009). The ‘Nifty 50 Data’ and ‘Nifty Next 50 Data’ worksheets contain the raw data downloaded from the website.

    NSE Index Data Google Sheet

  • Seven years as shareholder of VIP Industries

    Seven years ago, when I first invested in VIP Industries, I had no idea what kind of journey I was embarking on. Although VIP Industries represents less than 2% of my direct equity portfolio— even less when considering mutual funds—it has taught me valuable lessons about investing.

    First, volatility. We’ve all heard countless times that stocks are volatile, but nothing prepared me for how true that would be with VIP Industries during the Covid pandemic. In just one month, my investment went from a 170% profit to a 20% loss.

    Second, beginner’s luck versus long-term reality. When you start investing, you often experience beginner’s luck, where your investments outperform your expectations. VIP Industries was no exception, delivering impressive returns for the first two and a half years. Even the post-Covid recovery was remarkable, with an XIRR of 40%. But then, reality sets in—a reality where the former Managing Director leaves for a primary competitor, causing a shift in the industry.

    Investment through the years

    Returns

    Profit percent

    XIRR

    Related reading:

  • Seven years as shareholder of Pidilite Industries

    Pidilite remains a key investment in my portfolio. However, after nearly six years of outperforming the index, my luck ran out in October 2023. Both the Nifty Next 50 and Nifty 500 surpassed my returns from Pidilite. Although Pidilite’s XIRR of 18.4% is impressive, it pales in comparison to the Nifty Next 50’s 30.1% XIRR. Additionally, the dividends yield at cost remain meager at less than one percent.

    Investment through the years

    Returns

    Profit

    XIRR

    Related reading: