Restoring Traders/Investors Faith into Investing

Einstein

Well-Known Member
when the market was rising without any correction for the last 9 months, no one ever bothered to ask why the market was rising. If you look at the last few months, Nifty was the lowest on 26 Dec 2016, at 7908 and over the period of next 9 months, the Nifty rallied to hit a high of 10,178.95, implying a return of 28.71%. No one bothered to ask why the market was going up.
Not only the Nifty and the Sensex, most of the indices have given excellent returns. Metal, Oil & Gas, Realty, Consumer Durables Indices have recorded more than 30% returns in the last one year (after accounting for today and last week’s fall). Check the SME IPO index - a staggering 360% returns.

Now, coming back to why the stock market is falling? There are quite a few reasons. Corporate earnings and GDP growth, fiscal deficit target of 3.2% being missed incase of an economic stimulus, geo-political tensions across the globe.
  • As economic Survey has also pointed out, a number of indicators like GDP, IIP, credit offtake, investment, capacity utilization, etc., point to a deceleration in real activity since first quarter of FY2017. Farm loan waivers expected to cut economic demand up to 0.7% of GDP
  • Industrial economy is yet to pick up – the Gross Value Added (GVA) growth in manufacturing came in at mere 1.2% in Q1FY2018 as compared to 10.7% in Q1FY2017. 74% of manufacturing GVA was accounted for by the corporate sector, which has posted very poor performance in Q1FY2018
  • Banking industry credit growth hovers around 6%, at decades low level and, bad assets remain at record levels (9.6% for the banking system) and they are expected to taper off by March 2018
  • A sample of over 1,000 companies’ results (excluding banks & finance companies) indicate 9.7% y-o-y growth in net sales, but 1.7% y-o-y decline in net profits in Q1 FY 2018. Only hopes on forward corporate earning remain alive: Since 2013 the Sensex earnings moved up mere 3% cumulatively (from Rs.1,322 in 2013 to Rs.1,360 now)
  • Today’s latest news is that the crop production of Rice, Pulses etc are going to be lower than expected and will impact prices. Only Sugarcane production is good for this year, better than last year production.
  • The Prime Minister is going to announce a Rs. 17000 cr outlay spend for rural electrification today, to boost the economy.
But these are all TITBITS for a stock market, that is on an overdrive. It is important that, after this serious rally for the last so many months, retail investors take a deep breath, cool their adrenaline rush and start thinking rationally about serious investing now.
Make no mistake that this is still a BULL Market Run, which is going through a much needed correction, to assess where it is going to head in the future. The short term outlook maybe confusing with analysts and fund managers expecting 9700 - 9800 levels on the Nifty, but the long term bull run remains intact.
Unless there are serious geo-political tensions escalating into a war like scenario, the govt. will surely look at improving the macro economic indicators by giving a boost to the economy. Rating agencies have expressed their view that, even if the govt. misses the fiscal deficit target of 3.2% to improve growth in India, they will not be too bothered about changing the ratings of India.
So, the ball is in the Govt’s court, to take necessary steps to boost the economy and stop taking any measures or reforms, that can impede the long term growth story of India and make the markets go into free-fall spiral, back to 7000 -8000 levels.
 

Einstein

Well-Known Member
How big was your incurred loss in the Indian stock market? What is the main reason for that loss?


Kalrav Shah
, Stock markets
Answered 8h ago



How about Notional loss of 54 lacs - 61.2% portfolio down?
This is the screenshot of Zerodha account:

Main reason for this loss is not applying basic principles of investment:
  1. Not picking up fundamentally strong stocks.
  2. No risk management strategy.
  3. No time diversification. For example if I have to invest 50,000 in a company, I would buy shares in 4–5 intervals. I would first invest 10–15 k and see how’s that price is moving. Based on a behaviour of that stock, I would invest remaining amount.
  4. No stop loss.
  5. Speculation: Gambling in poor scripts like PC jewellers. Catching the falling knife.
  6. No proper asset allocation.
  7. Investing a huge amount in a penny stock like lycos.
  8. Not keeping cash on hand to average out good stocks/ buy new.
This is a portfolio of a person known to me. This isn’t my portfolio. I just wanted to make you understand a point that: if you are not investing with proper knowledge in stock market, then it’s pure gambling which rarely gives you positive results.
A smart investor would have turned 88 lacs in to more than 1 crore easily and then, he could have kept the cycle going on. What an opportunity cost!
First invest in learning then only invest your money in stock market.
 

Einstein

Well-Known Member
Dear investors,

After sharing investment results from quite some time, I have created a better way for individuals to track and review my investments, which are purely based on value-investing teachings of ben graham and warren buffett. Instead of posting them every few weeks, I have created a link, which I am posting here for the traders to compare their profit/loss which they made while trading in Nifty, with the portfolio created for long term gains.

Portfolio 2013 gain 511% till date, however is down 18% this year mainly because of 40% dip in caplin point, which actually is the biggest winner in this portfolio. Average gain from individual stocks stands between 300-400% and because of improving fundamentals, some of these stocks are still attractive. However be warned some are expensive. But I bought it as a growth + value fund so I will not make change in it and will see how it performances. 11 lakh invested would have been 68 lakh.

Link: https://docs.google.com/spreadsheets/d/1RYyp8b2uMAiPC-Io8GO_JmFYuVHqq3EXa2hr0QXNZWc/edit?usp=sharing

Portfolio 2014 was created in january 2014, this was more stable portfolio to be on safer side. And it did very well, during recent correction, portfolio was down by just 3.4% (since january till october). And it gain an impressive 200% till date. 13 lakh invested could have been 38 lakh today.

Link: https://docs.google.com/spreadsheets/d/1b6I3xQ9iz1PyuSE6YgVqkwuGi841SXuO1WBfmFZ8OKU/edit?usp=sharing

Portfolio 2018 This might be the last portfolio I will share but this is again a good portfolio or both cheap stocks and good small cap stocks with good business models. This year small cap stocks were the biggest looser wiping an average 25-35% from most of the small cap mutual funds. However our stands at -11%, this is 4 months old portfolio as of today. And has absorbed crash in small cap pretty well. 16.7 lakh turned into 14.8 lakh. but it have good potential.

Link: https://docs.google.com/spreadsheets/d/1MbUOrZM8PYTPY6cdasKf9sRNZ_UXwQsuxvgqcWhqvV8/edit?usp=sharing

My actual investments are at 843.6%, down from top 1102% at its peak. However past performance is not guarantee for future results. And because of outside factors it may go down further, but I believe in this country and have no doubt our jugaad economy will be one of the best in upcoming decade so I will keep investing.

Sincerely aapka apna,
Einstein. A.k.a Deepak Kumar.
 

Relish

Well-Known Member
Very good Sir.
Sir Can you suggest 5 stocks which we can buy in Sip mode every month for next 5yrs... investment 5000 per month. Risk moderate level.
 
Invest in Index fund for 10Years+ and think of it as your retirement fund. you'll automatically beat 90% of the fund managers out there.
You mean SIP in index fund, like NiftyBEES ??
 

Einstein

Well-Known Member
Hi TP,

Index funds are available in two types, ETFs (exchange traded funds) and open ended index funds (the typical mutual funds that we buy).
Index ETFs have to be bought through brokers on the stock exchange, so you need to have a demat account to trade in them. The costs would be marginally lower than open ended index funds, giving you slightly better returns. However, you cannot do a SIP (fixed amount every month) in ETFs, because you have to buy whole units only and as NAVs will change every month, you will buy in different values every month. In the case of ETFs, it can also happen that the market price is different from NAV, sometimes lower than NAV, which you will not see in open ended funds. Lastly, at the moment ETFs do not have much liquidity, hence buying and selling them in decent quantities can take some days, plus you cannot predict the average price you would pay or get.

Index funds of the open ended category do not require demat accounts. They can be bought in typical SIPs (fixed rupee amounts), as these funds allow fractional units to be transacted. You transact at NAV, there is no different market price as you may see in ETFs. So irrespective of the quantity of units, you will pay or get a uniform price for your investment.

Currently open ended funds may be better due to liquidity and price stability.Below are few..

The Best Index Funds for 2018
Index funds, as the name suggests, invest in an index. These funds purchase all the stocks in the same proportion as in a particular index. The scheme will perform in tandem with the index it is tracking, save for a small difference known as tracking error.
the performance of the index. Here’s the best index fund available in :
ICICI Prudential Nifty Next 50 Index Fund
This is an Index Mutual Fund launched in June 25, 2010. It is a fund with high risk and have given a return of 12.65 % since its launch.
Returns per annum over the years from this fund are:
Duration
Returns
1 year
17.64 %
3 years
12.87 %
5 years
19.41 %
  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 157 Cr.
  • Age is nearly 7 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty Next 50 TRI since its launch.
  • The top portfolio holdings of the fund include Titan Company Ltd., JSW Steel Ltd., Bajaj Finserv Ltd., Motherson Sumi Systems Ltd., Britannia Industries Ltd., Godrej Consumer Products Ltd., CBLO (CCIL) etc.
  • The holdings are balanced across various sectors with maximum weightage given to Consumer Goods ( 27.5 % ) followed by Financial Services ( 17.9 % ).
The objective of the fund is to invest in companies whose securities are included in Nifty Junior Index and to endeavor to achieve the returns of the above index as closely as possible, though subject to tracking error. The fund intends to track only 90-95 % of the Index i.e. it will always keep cash balance between 5-10 % of the Net Assets to meet the redemptions and other liquidity requirements. However, as and when the liquidity in the Index improves the fund intends to track up to 100 % of the Index.
UTI Nifty Fund
This is a Index Mutual Fund launched in February 14, 2000. It is a fund with moderately high risk and have given a return of 10.98 % since its launch.
Returns per annum over the years from this fund are:
Duration
Returns
1 year
14.59 %
3 years
5.64 %
5 years
12.35 %
  • This fund has been rated as a 5 star fund by Groww.
  • AUM of close to ₹ 716 Cr.
  • Age is nearly 17 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty 50 Total Return since its launch.
  • The top portfolio holdings of the fund include Reliance Industries Ltd., HDFC, Tata Consultancy Services Ltd., ITC Ltd., ICICI, Infosys, Kotak Mahindra Bank Ltd., Maruti Suzuki India Ltd., Larsen & Toubro Ltd.etc.

    The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 36.5 % ) followed by Energy ( 14.7 % )
  • Minimum SIP = ₹ 500
  • Equity share = 99.3 % , Debt share = 0 % and Cash = 0.7 %.
  • Large Cap share = 100 % , Mid Cap share = 0 % and Small Cap share = 0 %
  • UTI NIF is an open-ended passive fund with the objective to invest in securities of companies comprising of the Nifty 50 in the same weight age as they have in Nifty 50. The fund strives to minimize performance difference with Nifty 50 by keeping the tracking error to the minimum.
HDFC Index Fund – Nifty Plan
This is a Index Mutual Fund launched in July 17, 2002. It is a fund with moderately high risk and have given a return of 18.17 % since its launch.
Returns per annum over the years from this fund are:
Duration
Returns
1 year
14.37 %
3 years
5.58 %
5 years
12.48 %
  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹ 312 Cr.
  • Age is nearly 15 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark Nifty 50 since its launch.
  • The top portfolio holdings of the fund include Reliance Industries Ltd., HDFC, Tata Consultancy Services Ltd., ITC Ltd., ICICI, Infosys, Kotak Mahindra Bank Ltd., Maruti Suzuki India Ltd., Larsen & Toubro Ltd.etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 36.4 % ) followed by Energy ( 14.7 % )
  • Minimum SIP = ₹ 500
  • Equity share = 85.9 % , Debt share = 0 % and Cash = 14.1%.
  • Large Cap share = 100 % , Mid Cap share = 0 % and Small Cap share = 0 %
The objective of this Plan is to generate returns that are commensurate with the performance of the NIFTY, subject to tracking errors.
HDFC Index Fund – Sensex Plus Plan
This is a Index Mutual Fund launched in April 03, 2008. It is a fund with moderately high risk and have given a return of 16.60 % since its launch.
Returns per annum over the years from this fund are:
Duration
Returns
1 year
44.19 %
3 years
21.21 %
5 years
25.14 %
  • This fund has been rated as a 4 star fund by Groww.
  • AUM of close to ₹ 117 Cr.
  • Age is nearly 10 years. So its performance can be easily judged.
  • Has consistently outperformed its benchmark S&P BSE Sensex since its launch.
  • The top portfolio holdings of the fund include Reliance Industries Ltd., HDFC, Tata Consultancy Services Ltd., ITC Ltd., ICICI, Infosys, Kotak Mahindra Bank Ltd., Maruti Suzuki India Ltd., Larsen & Toubro Ltd.etc.
  • The holdings are balanced across various sectors with maximum weightage given to Financial Services ( 34.1 % ) followed by Energy ( 14.2 % )
  • Minimum SIP = ₹ 500
  • Equity share = 100 % , Debt share = 0 % and Cash = 0 %.
  • Large Cap share = 90.1 % , Mid Cap share = 9 % and Small Cap share = 0.9 %
  • The scheme aims to invest 80 to 90% of its assets in the companies that form the Sensex and between 10 and 20% of the assets in the companies which are not included in the Sensex.
 
Last edited:
Dear investors,

After sharing investment results from quite some time, I have created a better way for individuals to track and review my investments, which are purely based on value-investing teachings of ben graham and warren buffett. Instead of posting them every few weeks, I have created a link, which I am posting here for the traders to compare their profit/loss which they made while trading in Nifty, with the portfolio created for long term gains.

Portfolio 2013 gain 511% till date, however is down 18% this year mainly because of 40% dip in caplin point, which actually is the biggest winner in this portfolio. Average gain from individual stocks stands between 300-400% and because of improving fundamentals, some of these stocks are still attractive. However be warned some are expensive. But I bought it as a growth + value fund so I will not make change in it and will see how it performances. 11 lakh invested would have been 68 lakh.

Link: https://docs.google.com/spreadsheets/d/1RYyp8b2uMAiPC-Io8GO_JmFYuVHqq3EXa2hr0QXNZWc/edit?usp=sharing

Portfolio 2014 was created in january 2014, this was more stable portfolio to be on safer side. And it did very well, during recent correction, portfolio was down by just 3.4% (since january till october). And it gain an impressive 200% till date. 13 lakh invested could have been 38 lakh today.

Link: https://docs.google.com/spreadsheets/d/1b6I3xQ9iz1PyuSE6YgVqkwuGi841SXuO1WBfmFZ8OKU/edit?usp=sharing

Portfolio 2018 This might be the last portfolio I will share but this is again a good portfolio or both cheap stocks and good small cap stocks with good business models. This year small cap stocks were the biggest looser wiping an average 25-35% from most of the small cap mutual funds. However our stands at -11%, this is 4 months old portfolio as of today. And has absorbed crash in small cap pretty well. 16.7 lakh turned into 14.8 lakh. but it have good potential.

Link: https://docs.google.com/spreadsheets/d/1MbUOrZM8PYTPY6cdasKf9sRNZ_UXwQsuxvgqcWhqvV8/edit?usp=sharing

My actual investments are at 843.6%, down from top 1102% at its peak. However past performance is not guarantee for future results. And because of outside factors it may go down further, but I believe in this country and have no doubt our jugaad economy will be one of the best in upcoming decade so I will keep investing.

Sincerely aapka apna,
Einstein. A.k.a Deepak Kumar.

Can you share us best videos, books or course details reference to Learn fundamental analysis?
 

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