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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. More importantly, they will also be in business in the future. That’s how Colgate landed in my portfolio.
Five 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 index. 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.
But what I didn’t consider was that Alkem can also be removed from the Nifty Next 50 index. This is what happened in August 2021. And it hasn’t returned back in the index since then.
After investing during the initial years, I haven’t made any new investments in Alkem since October 2023 (Figure 1).
While I have completed five years with my investment in SRF, the investments themselves has been very uneven. For example, my investments in FY 2023-24 alone account for more than 60% of my total investments (Figure 1). Hence, I am still early in my investment journey.
Shray Chandra and Deepak Shenoy’s discussion on how we treat gold, land very differently from equities.
Shray Chandra: But when I’m looking at my portfolio, if I’m going to put them all in equity, I’m this super demanding and difficult person saying this doesn’t deserve to be in my portfolio, it’s not doing well, I’ve lost faith in management, this sector is completely screwed.
But if 5% of that money is in gold, and gold doesn’t do well, I’m like, oh, this is fine, it’s meant to be hedge. It’s almost like I treat it completely differently. So when it goes up, I said, see, I was right.
And when it doesn’t do well, I said, yeah, I know, because it’ll do well at the other times. So how does one deal with this sort of like, is this a rational way of thinking about it? Is it just managing emotional expectations or is it like insurance? It won’t do well for many years and some years it will do well.
Deepak Shenoy: That’s a brilliant philosophical thought process difference. And I think real assets have this advantage. You buy land, you have a similar thing.
Land has this advantage that people don’t re-value it. And even if they do re-value it, they say, we’ll wait. People tell me that they want to wait for the metro in Bangalore before they sell their apartment.
I’m like, that’s at least three, four years away where I am. They’re like, huh, it’s okay. I’m like, nobody will tell me.
I will wait three, four years for Nifty to go back up. It’s very rare to find that, right? I have to try really hard to…
Listen, it’s not down too much. It’s only been a year. So just hang on for a few more years and it’ll be fine over the long term, right?
You have to give any investment at least a few years before it gets in. But it’s so much easier to tell that about land or about gold than it is to tell them about stock A or portfolio A or mutual fund Y and so on. So I feel that maybe it has become a second part of nature for us. It says, well, if this mutual fund thing doesn’t work out for me in a year, I’m done. But the land bit, I want to, I don’t mind. That is actually long term.
Shray Chandra: We’re able to bring in our long term thinking properly when it comes to or the diversification thinking when it comes to say assets like land, real assets. We struggle when it comes to financial assets where the job is, you’re supposed to make me rich. What are you doing?
I am only one year shy of completing ten years with my investment in Asian Paints. But don’t let the number of years fool you into thinking that I am a long term investor. More than half of my investment has come in FY 2023-24 (Figure 1). During the initial years—when the company was going strong and I should have been investing aggressively in it—I was looking the other way and trying to diversify. It was only when effect of Grasim’s entry into paint industry started becoming evident and the Asian Paints’ share price corrected, I made aggressive investments.
Pidilite remains a key investment in my equity portfolio. Slowly and steadily I have increased my investment (Figure 1) in it over the last eight years. There’s a temporary pause on new investments as I have other financial commitments, but as soon as they are taken care of I would resume.
Eight years ago, when I first invested in VIP Industries, I had no idea what kind of journey I was starting on. My investment was scattered through these eight years (Figure 1) and it was more of a diversification mechanism rather than investment backed by research. I have bought VIP suitcases and bags. They turned out to be good. So the stock must also be good.
Somewhere in June 2015, I got a call from ICICI Direct that I had been assigned a relationship manager and he wanted to help me with my equity investments. Being naive to the world of equities, I decided to give it a try. I met my relationship manager and he helped me setup my ICICI Direct account.
“Which stock should I buy to start with?” I asked my relationship manager.
“HDFC Bank”
“What? And not ICICI Bank? But you work for ICICI Bank!”
“Because HDFC Bank is better.”
I heeded to his advice and bought my first shares of HDFC Bank. It has been ten years since that.
(more…)My investment in Divi’s Laboratories has been my biggest missed opportunity. Eight years back—still new to equity investing—I was looking for pharma stocks to invest. During that research—not sure if I should call it research, but let’s go with it—I came across Divi’s Laboratories. I made a small investment in it and forgot about it. In the next 3.5 years the stock went up 5 times! (Figure 1) And I did not make a single new investment during that time! (Figure 2) Every time I thought “it can’t go up any further than that”. Boy was I wrong. So, so wrong!
(more…)There is really nothing for me to write about my investment in Dabur. Just like D Mart, the journey has been a painful one. The XIRR (Figure 1) has snaked around the 0% value on the X axis since last six years and as of today it stands at -4.2%. In contrast the Nifty Next 50—of which Dabur is part of—is at an impressive 19.1%. In fact, in the last six years Dabur has unperformed Nifty Next 50 for 5 years.
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