Day Trading Stocks & Futures

[Romeo1998]

thats right and yes may be its ok to keep as chances of above 16100 is less. But I would not wait for another 3 days for the extra 15 rs.

btw you are placing both side orders manually ?

i checks just now, still 25 points premium is there to be taken n chances of closing below 16100 is very high, so i will waits till expiry
16300PE profit = 497-163 = 334, 16100PE loss = 322-79 = 243, so overall i gets currently 334-243 = 91 pts from the 116 points 25 pts is still remained, n i not leaves 1 point also
no, order is not manually, i uses full automation, but still there is many loopholes, so i watches system from 9 to 3

 

[mohan.sic]

i checks just now, still 25 points premium is there to be taken n chances of closing below 16100 is very high, so i will waits till expiry
16300PE profit = 497-163 = 334, 16100PE loss = 322-79 = 243, so overall i gets currently 334-243 = 91 pts from the 116 points 25 pts is still remained, n i not leaves 1 point also
no, order is not manually, i uses full automation, but still there is many loopholes, so i watches system from 9 to 3

how is this automated I mean any broker software or external ?

 

[mohan.sic]

Hi @Smart_trade Sir,
Here is an update based on your feedback:
1. In our calculation we have now considered Bonus, Splits, and Reinvestment of dividends(post 30% tax). 10,000 invested monthly with 15% increase in instalments YoY.
2. Now we are comparing apple with an apple. i.e. Large&Midcap mutual funds vs Large&Midcap stocks mixed vs NiftBees
3. To make the results more realistic, we have not considered few extra ordinary performer like BajFin, Dmart, etc. Also have considered 1 extreme loose like YesBank considering that in real world i would have made mistake of investing in it. All these is done to make results more realistic/normalized.

My original question remains as is:
If the calculations are correct, we see that returns are just little bit more in stocks on average basis, then why would one take all the pain of stock hunting, and not the mutual fund way. I am sure there is something i might be missing, Please throw some light on this matter.

View attachment 47819
Note: Details of above matrix/calculation can be found in below google docs.
https://docs.google.com/spreadsheets/d/19p1mrWKkncZK06QTxItxrviEK9bIbJ1xa1T9mymEf8M/edit?usp=sharing

Stocks under test were:
ASIAN PAINTS
PIDILITE
TITAN
TCS
BAJAUTO
RELAXO
RELIANCE
MARUTI
WIPRO
TECHM
SUNPHARMA
ICICI
AXIS
DLF
NESTLE
BRITANNIA
DABUR
Cipla
Havells
Marico
Berger paint
PageInd

@travi Sir, NiftyBees data is also now compared in above sheet. Would love to know your opinion as well.

But what you did was not a comparison between selected stock hunting and mutual fund.
That's a well diversified portfolio of 21 stocks. So it is between your portfolio and mutual fund portfolio and yours did comparatively well.

May be the idea of stock hunting vs mutual funds/index comes - when you limit it to very few stocks which you hunt based on research/advise and Time the entry and exit. In that case your returns will be comparatively very high than mutual funds OR equal to mutual funds OR much less than mutual funds. But in your approach obviously you will not see the returns deviate much ( either way ) from mutual funds.

 

[Krishan86]

Now the figures add up....stocks are giving 29.3 % more than mutual funds.The large cap stocks on average will give 18-20 % CAGR and largecap MFs will give 14-15 %. ( in extremely rare cases of midcap/smallcap stocks like Persistant Systems or Tata Elxsi one gets superlative returns but that comes with high volatility too...)It is very difficult to hit over 20-22 % in established largecap stocks on average( meaning some will exceed 20-22 % and some will not reach that lelel) so on average 18-20 CAGR % is a good return in large cap stocks. Anything over 16-18 % on long duration of 10-20 years consistantly will make investor very rich once the capital increases and starts rolling.

Nothing wrong in investing in Mutual funds as it eliminates work of stock picking.If one can digest the volatility,small and midcap mutual funds can even give more than 22-23 or more % CAGR but that comes with increased volatility.

Index funds and Index ETFs give 12-14 % CAGR if lumpsum amount is invested.

The way to get superlative returns is when the stock goes into a period of increased profits/free cash flows...here the stock price gets lifted due to increase in earnings and also increase in P/E multiples due to stock getting noticed by institutions/large investors.(Example :Relaxo,Titan)

You will see that few stocks like Asian Paints,Pidilite,Titan,Britania,Havels have given returns which is about 60-65 % higher than the MF returns and that makes the stock selection worth all the troubles.

Thank you ST Sir!
Allow me sometime to do more data analysis on questions like:
1. Drawdown in Large cap stocks on an average vs NiftyBees vs Large cap Mutual funds.
2. Midcap Mutual fund returns vs Large cap stocks return.
3. Midcap Mutual fund drawdown vs Large cap stocks drawdown.

Will get back with some more data. Thank you for your guidance.

 

[Smart_trade]

Thank you ST Sir!
Allow me sometime to do more data analysis on questions like:
1. Drawdown in Large cap stocks on an average vs NiftyBees vs Large cap Mutual funds.
2. Midcap Mutual fund returns vs Large cap stocks return.
3. Midcap Mutual fund drawdown vs Large cap stocks drawdown.

Will get back with some more data. Thank you for your guidance.

You may also include small cap funds like Nippon Reliance Small cap Fund,SBI Small cap fund,Axis small cap fund etc.

 

[primitivetrader]

You may also include small cap funds like Nippon Reliance Small cap Fund,SBI Small cap fund,Axis small cap fund etc.

is it a good idea to buy small-cap (in current market downtrend) MF for long term investment (not SIP) ?

 

[travi]

Thank you ST Sir!
Allow me sometime to do more data analysis on questions like:
1. Drawdown in Large cap stocks on an average vs NiftyBees vs Large cap Mutual funds.
2. Midcap Mutual fund returns vs Large cap stocks return.
3. Midcap Mutual fund drawdown vs Large cap stocks drawdown.

Will get back with some more data. Thank you for your guidance.

Same you can mix as i posted earlier with vary ratio in BEES too.
Niftybees, Juniorbees and if you want to skew then bankbees too
You can cover midcaps that way in some ratio like 70:30 / 75:25 etc

 

[Krishan86]

Ok, glad to see some really insightful comments from seniors. Thank you for all those feedback/comments. Please keep them coming. Will take all of them in consideration in my next post.

Also, let me rephrase my objectives of this exercise:
1. Being a conservative investor i want less drawdown possible.
2. I am going to invest big chunk of my savings, hence i want to diversify among ~20 stocks from various sectors.
3. Idea is to create (kind of) custom mutual fund which does not give too much drawdown in bear market, but substantially beats Nifty and Midsize mutual funds in long run. If the result of this exercise says we can build such portfolio of stocks, then great, will go ahead with that. Else will continue with mutual funds.
4. Investment period will be ~10 years or so.
5. Dividends will be reinvested 100% (post tax).

 

[Smart_trade]

is it a good idea to buy small-cap (in current market downtrend) MF for long term investment (not SIP) ?

Yes, good small cap funds ( you can see Nippon Reliance small cap fund returnsgive much more returns than large cap funds but they have larger volatility so buy small quantities in stages...

 

[travi]

Yes, good small cap funds ( you can see Nippon Reliance small cap fund returnsgive much more returns than large cap funds but they have larger volatility so buy small quantities in stages...

Good time for ELSS shopping as well.

See this new kid on the block, best among peers.
ICICI Prudential Long Term Wealth Enhancement Fund | Equity Funds| Mutual Funds (icicipruamc.com)

Any idea of their investing philosophy ?
Looks young, around 4yrs