My accounting number and ratio only fundamental analysis based BSE portfolio

mastermind007

Well-Known Member
#2
I recently came across a combination of accounting numbers and ratios that outperformed my technical analysis assisted investment system. The following is what my portfolio would look like for the next 12 months:

https://docs.google.com/spreadsheets/d/1PWMZQzHsGUq7Ynf-QrPwMF_j444ENasxZ9M3wSAsbjQ/edit?usp=sharing

Please let me know your feedback (especially @Einstein).
Too early to talk anything about portfolio. What were the accounting numbers and ratios that you are talking about?

I personally would stay away from FMCG companies but that is my own personal view.
 
#3
@MasterMind007 I used ROE, sales growth and 2 other accounting numbers/ratios that I'm not yet ready to reveal.

The same investment process/system made 9% from May 2015 to May 2016 and 86% from May 2014 to May 2015.

Edit: I'm not using valuation because companies that were undervalued according to the Graham formula (which is meant to value only bonds) did not produce better resuts from May 2015 to May 2016.
 
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#4
When I added my 'take' on the Graham 'number':

The results were 91.95% instead of 86.49% from May 2014 to May 2015 and 10.28% instead of 9.55% from May 2015 to May 2016.

New BSE Fundamental Value Portfolio for May 2016 to May 2017 on Google Sheets:
https://docs.google.com/spreadsheets/d/1bFhqZXjngdGdzAl1fGSeQ6OLpvknEbkzIZfkQmuTDNw/edit?usp=sharing

Edit:
Utilizing the Graham number in my investment system works for a fund upto INR 1,200 crore but beyond that, the Graham number does not offer benefits.
 
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Einstein

Well-Known Member
#5
Nice portfolio. keep it up. By the way I use 5-8 different ratio on different industries. they work on some, and don't work on others. For example you use ROE as you said. but you cannot use them on financial companies. every ratio have its own advantages and disadvantages. I would always recommend going through annual report to understand the business structure and use ratio to understand its competitiveness. and never rely on single ratio for investment, its just a beginning process.
 
#6
@Einstein, my system cannot accomodate every industry. As you mentioned, financial companies are an issue as well as companies that require a lot of debt to function.

I should compare ratios between companies in the same industry but I'm currently relying on my investment system to keep me away from low performing industries (it might also keep me away from very high performing industries too).
 
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