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nav_1996 Senior Member Joined: 08/Sep/2006 Online Status: Offline Posts: 803	Topic: Nav portfolio Checkup Posted: 19/Sep/2006 at 11:10pm
	My portfolio: Infosys 38.9% 3i Infotech 4.5% Atlas Copco 2.3% Balmar Lawrie Invest 0.9% Balaji Tele 2.7% Geometric 2.5 IDBI 17.4% IDFC 0.5% Marico 4.0% Ranbaxy 2.1% Smith Klime Consumer 2.1% Sundaram Finance 1.4% Tata Elxsi 4.2% TCS 7.8% Bharati Shipyard 1.2% Sundaram Select Midcap Fund 3.8% Tempelton India Equity Fund 3.9% Edited by nav_1996 - 12/Feb/2010 at 7:15pm
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 19/Sep/2006 at 11:12am
	Although the portfolio is spread in over 15 stocks it is really very concentrated. The top three stocks Infosys, IDBI and TCS make up for almost 65% of the total portfolio by value while the bottom 9 stocks that is 60% by number make up for only 15% of the portfolio. That means that even if we get a five bagger in any of these companies it would not make much of a difference to the overall portfolio whereas if we have a market decline and these stocks manage to stay put they would not make much of a difference to the overall portfolio either. A large cap like Ranbaxy has about 2% of the portfolio now Ranbaxy can at best double in a year so it should be at the top or else any small cap bet could be included at the bottom so that if the bet goes right the portfolio moves fast. In approximate weightage Technology makes about 58% of the portfolio; Banking 20%;Infrastructure about 7%; media 3% consumer about 3% Pharmaceutical 2%. The sheer weightage makes it look like a sector fund. No wonder you are from the software industry and having worked at Infy your portfolio speaks the same language. Now I am not trying to be judgmental as to whether this is good or bad all I am trying to say that these very small exposures may not justify their inclusion because the portfolio will move on the lines of what the larger ones do. The top 3 Infy, IDBI, TCS. Broadly the portfolio seems to be playing the technology sector theme and with IDBI makes up that makes up about 75% of the portfolio. Having worked in Infy if this excess weightage makes you feel comfortable then it would be OK as Infy as a stock should yield more then 30% per anum for the next 3 years so that is an anchor at the portfolio. I would suggest a reallocation from Infy IDBI and TCS into other stocks or liquidating the fewer than 4% stocks and putting that money into the others so that we get a kind of a balance. Otherwise the choices of companies are excellent just the weightage seem to disturb the lay out a bit. Would request other forum members to contribute any idea to this portfolio. Edited by basant - 20/Sep/2006 at 10:34pm
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nav_1996 Senior Member Joined: 08/Sep/2006 Online Status: Offline Posts: 803	Posted: 20/Sep/2006 at 3:45pm
	Thanks for your inputs Basant. I do have plans for sector diversification. But as you mentioned I end up investing in areas which I understand best.
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 20/Sep/2006 at 4:21pm
	Nothing wrong with that. In fact that is what we should doing. Normally a dentist buys shoes companies while engineer is more interested in Pharmaceuticals and a doctor would hold a software company. But if one can understand a sector/company why not put everything there rather then diversify into things that he does not understand for the sake of diversifying. But in case the US slowdown starts to happen the software sector will be derated (PE's would come down). That is a threat.
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reetesh Senior Member Joined: 01/Sep/2006 Location: India Online Status: Offline Posts: 793	Posted: 20/Sep/2006 at 5:35pm
	But in case the US slowdown starts to happen the software sector will be derated (PE's would come down). That is a threat In light of this threat, you can look at buy Mphasis Bfl, subsidiary of EDS ($19.5 billion parent). Business will not be a problem here even a 5% of its work outsourced to Mphasis will take this company into different orbit. Threat here is of de-listing and around 50% of EDS`s revenue comes from US govt. that work might face some resistance coming to India. My advice would be hold onto INFY and swithc your TCS to this or something else, because no point in keeping 2 lagre cap. stocks from same sector.
	When going gets tough, that’s when tough (people) gets going.
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basant Admin Group Joined: 01/Jan/2006 Location: India Online Status: Offline Posts: 18403	Posted: 20/Sep/2006 at 6:21pm
	Our tech members on the forum could tell us more but Mphasis BFL looks a doubler in two years to me!
	'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in
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nav_1996 Senior Member Joined: 08/Sep/2006 Online Status: Offline Posts: 803	Posted: 20/Sep/2006 at 7:45pm
	Basant my arguement is that even TCS can double in 2 years from here so why mPhasis. Look at their performance in last 5 years. Infact BPO has been their saving grace. EDS has poor record of running their own india centers. Compare that with IBM. Also work from EDS will be low end. mPhasis was sold because they were loosing the game and EDS acquired them as they were also loosing in this game. Can two loosing teams make a winning team. I will not bet on them as they are safer bets around. Also work from EDS will have lower margins. My analysis: If you want to stick to IT services play Infy, TCS. Look at others only for niche area e.g. BPO, Europe focus, Telecom, Finance, Engineering. Always take comapny's ability to attaract and retain talent when you analyze service industry. This will explain you why so many business houses did not succeed in IT though they were glaring at a huge opportunity passing them by. They may have different excuses now. An employee will also like to work with large organisations, decent salaries and good working environment. They may choose to work for smaller comapnies only if salary is substantially higher, growth prospects are far better or company works in some niche areas which fascinates them. I welcome other views.
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reetesh Senior Member Joined: 01/Sep/2006 Location: India Online Status: Offline Posts: 793	Posted: 20/Sep/2006 at 9:56pm
	When you say TCS can double in two years then I don`t think it is advisable to look at PRICE (only) you also need to look at MARKET CAP also. TCS at Rs.2000 will have 200000 cr. aprox. market cap. that to inlight of slowing US economy as Mr. Basant discussed. But this very personal thing and I will refrain myself from posting any views on this thread..
	When going gets tough, that’s when tough (people) gets going.
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