A Bird's eye view to a Bull's eye

[tnsn2345]

Hi tnsn (does it mean - The Never Say Never)

That's a good one :lol:

BUT .. a LONG TERM portfolio view too is necessary and I think YOU should go ahead with that too.

Why ?

Because ...

1. THAT is where the returns come from. The terms Ten-Bagger and Jackpot is from these Long Term investments. eg. B F Utilities from 16 to 2600+, Infy from 1500-3500+, Bata from 90 to 600+, Tital from 800 to 4K+, Bajaj Auto, SBIN and many more ...

2. Lesser risk than the shorter and medium term investments, gives more time to cos to show results and returns ..

and lastly BUT not least ..

3. Ensure health and longevity

IMO these are investment portfolio and not trading portfolio. For investments, I would need to forecast the business growth and the industry. I need to 'buy' the business (some thing like Warren Buffet). In trading I am buying on 'action' and selling on 'reaction', I am trading what is moving and not why it is moving. In investment I need to know the 'why'.

As I had mentioned earlier, that trading income is just like a salary / business income which one gets. And the savings from the 'salary / business income' are invested in assets with a FA view and not necessarily a TA view (IMO).

So if I believe the India growth story for the next 2 decades, then I am better off 'investing' my savings in an Index fund, a diversified large cap equity fund, a midcap fund and some in a small cap fund too. I may have some allocation to some PE funds or even a PMS. If I have access to insider information then I may have some money put it such stocks. So you see effectively I not banking on TA here, it would be mix of FA, gut, bias, etc as far as investment portfolio is concerned.

As a trader (let's say if it is my job/ business) I would follow TA or TA based discretionary system to trade shorter TFs trading portfolios (intraday, 1 day, 1 week, 1 month)

Regards,

p.s. Also to add, there are asset classes where spectacular returns can be generated for holding periods of 10 - 15 - 20 years, such as art (start investing 2 - 5 lacs per upcoming artists in the country, even if one reach a fame in a decade or two, you will recover (losses due to failed artists) and make some super gain on your investments. Overseas, super HNIs invest in 'wine' portfolio, buy exotic old wines and keep in the cellar or living room for 2 / 3 decades and then sell it at a premium. There are limited edition watches, which such people buy for consumption and also for investments.
In the US, postal dept prints special limited edition stamps (they are primarily for investments and the govt knows it, hence they keep on issuing different stamps for different occasions)

Incidently SBI had launched Sachin Gold coins (I guess almost 15 years ago) and they had minted huge quantity but found very few buyers. I don't know what they did with the left out stock.

 

[tnsn2345]

Dear SM,

Ok, still, as you want, I will aslo parallelly post a stock portfolio with 1 month - 2 month trading TF.

This will be a long only portfolio without leveraging. Will need less monitoring.
Regards,

 

[tnsn2345]

Here we go...the TPL (Tnsn2345's Premier League)....Will initiate actual portfolio latest by the next week....till then, request your feedback, inputs. I propose to keep the portfolio updation in a monologue way and without discussion. Discussion can be kept / done on some other thread.

Regards,

 

[tnsn2345]

Friends, I have kept some parameters undisclosed in the earlier post. If someone could take effort to highlight the same, would appreciate the effort and also would help you to exercise your brain cells.

Regards,

 

[anuragmunjal]

Friends, I have kept some parameters undisclosed in the earlier post. If someone could take effort to highlight the same, would appreciate the effort and also would help you to exercise your brain cells.

Regards,

hi Tnsn
your post was an eye opener, though u have been speaking of managing different 'risk' portofolios simultaneously frm a long time, this post makes it clear how to do it..
one thing which I missed in the post was that u have not defined any tme frame fr the above portofolio...I am assuming it is one month..

regards

 

[MurAtt]

ohh ... I though Dravid was a long term portfolio with slow and steady less volatile movers and as we progress downwards to VVS, Sehwag and Pathan .. the volatility and risk increases and time frame decreases.

 

[tnsn2345]

hi Tnsn
your post was an eye opener, though u have been speaking of managing different 'risk' portofolios simultaneously frm a long time, this post makes it clear how to do it..
one thing which I missed in the post was that u have not defined any tme frame fr the above portofolio...I am assuming it is one month..

regards

Ok. So you got the first missing parameter. i.e. the time period of the trading portfolio. Again your assumption of 1 months time is correct.

Now there are two ways to do this 1) To define the time period by which the portfolio would be wound and 2) Also to define number of trades within this time period to try to get to the targeted return.

The second parameter mentioned above may be a surprise to many traders here and I with little hesitation I do not mind revealing this here.

So effectively we are saying that I will reach the targeted return by 'x' number of trades or 1 month, which ever is earlier.

Why have I introduced this parameter - maximum number of trades? The secret is I have limited resources (i.e. trades here) so I have to be very particular in the trades I take. This parameter helps in taking trades which are more probable and keeps you in check of over /impatient trading. So just like we have limited resources in terms of money, time, let us also have restriction on the number of 'attempts' we take to reach the target. We have to manage all our resources judiciously.

Let me define x = 12 for our TPL portfolio.

Regards,

 

[tnsn2345]

ohh ... I though Dravid was a long term portfolio with slow and steady less volatile movers and as we progress downwards to VVS, Sehwag and Pathan .. the volatility and risk increases and time frame decreases.

SM, you have got the second missing parameter right. What is the trading TF of these sub portfolios? While I have mentioned that the outer limit of TPL portfolio is 1 month, you will wonder why different risk in this portfolio or are there different trading TFs for different players mentioned in the 1 month portfolio. Or do I have different such TPLs for higher time holdings. The answer is yes.

So while the above mentioned TPL will be trading on 1 day TF, we will call it TPL- 1D.

And similary we can have :

* TPL- 1W (for trading TF of 1 week) which can have both Futures and Options. It can also be built up with Stocks alone too (not my preference though)

* TPL - 1M (for trading TF of 1 month) wich will have stock (long only - non levered) and could also have options (only for hedging purpose)

* TPL - 1H (for trading TF of 1 hour) which will have Options - Intraday

You may have such or more trading TFs for your entire trading capital (Trading capital is different than the investment capital - which is used for long term investment, which you and me had shared ideas just a few posts earlier)

So for each such TPL you will have Dravids, VVSs, Shewags, Yusufs et al. But yes the Risk : Reward of different TPL will be different.

I would restrict myself here on this forum with TPL - 1D for simplicity.

Regards,

 

[anuragmunjal]

Ok. So you got the first missing parameter. i.e. the time period of the trading portfolio. Again your assumption of 1 months time is correct.

Now there are two ways to do this 1) To define the time period by which the portfolio would be wound and 2) Also to define number of trades within this time period to try to get to the targeted return.

The second parameter mentioned above may be a surprise to many traders here and I with little hesitation I do not mind revealing this here.

So effectively we are saying that I will reach the targeted return by 'x' number of trades or 1 month, which ever is earlier.

Why have I introduced this parameter - maximum number of trades? The secret is I have limited resources (i.e. trades here) so I have to be very particular in the trades I take. This parameter helps in taking trades which are more probable and keeps you in check of over /impatient trading. So just like we have limited resources in terms of money, time, let us also have restriction on the number of 'attempts' we take to reach the target. We have to manage all our resources judiciously.

Let me define x = 12 for our TPL portfolio.

Regards,

Tnsn, what I essentialy gather frm this is that in this particular portofolio, u are willing to risk maximum 48000/- pm month for a maximum possible return of 240000/-. the maximum no. of trades that u do wd be 12. u wd stop trading if u achieve ur target before 12 trades are over or else u wd stop trading wherever the account stands after the culmination of 12 trades.
I suppose the emphasis on having a fixed no. of trades is becos of the fact that ...
a) as u said that the concentration shd be on taking high probability trades.
b) since the major revenue earners are 'Sehwag & Yusuf', after the efflux of 12 trades, the account wd most probably be in negative and it wd be better to cut the loss fr that particular month.

pls correct me if I am wrong..

regards

 

[tnsn2345]

Tnsn, what I essentialy gather frm this is that in this particular portofolio, u are willing to risk maximum 48000/- pm month for a maximum possible return of 240000/-. the maximum no. of trades that u do wd be 12. u wd stop trading if u achieve ur target before 12 trades are over or else u wd stop trading wherever the account stands after the culmination of 12 trades.
I suppose the emphasis on having a fixed no. of trades is becos of the fact that ...
a) as u said that the concentration shd be on taking high probability trades.
b) since the major revenue earners are 'Sehwag & Yusuf', after the efflux of 12 trades, the account wd most probably be in negative and it wd be better to cut the loss fr that particular month.

pls correct me if I am wrong..

regards

Dear Anurag,

First thing you are right that this is a particular portfolio i.e. will trake a 1 day TF. Similarily I will have different TF (1 h, 1 w, 1 month) trading portfolios, but they are out of the discussion here.

Second this relating to 12 trades is incorrect (I guess I was not clear when I stated it earlier). It is not 12 trades cummulative for the entire TPL portfolio. It is 12 'strokes' (read 'trades') per player. So I am taking about is each Dravid, VVS, Sehwag and Yusuf get to play 12 trade individually. And importantly many of these players will play simultaneously, depending on the opportunities and risk foreseen. So manytimes, I will have multiple positions (for different players) at a same time.

I will stop each player after he has played 12 strokes (read 'trades'). So we will have some players off the ground when they have played their role. If their target is achieved before 12 strokes the respective player will be off. So if Dravid reaches 2.5% growth at the end of 8th strike (trade) he is off the ground.

At the end of the TPL portfolio period i.e. 1 month we can evaluate the success on various parameters (will write about it at later stage)

Again this number of 12 is not random, but here I have mentioned just the number, there is maths involved relating to success rate and reward rate. I could have also mentioned 8 but that would demand very high success rate of me. I am now a days targeting the same for consistency.

Regards,