Portfolio Composition at the end of October 2014



Here is a new edition of my portfolio composition. The last two months have not been particularly kind to my portfolio performance, as can be seen in the next post. In fact, partly due to the fact that I was travelling, and partly due to procrastination due to my relative poor performance in September, I missed putting up my portfolio at the end of September.

But here I am, with my portfolio at the end of October 2014. As usual, this is not a complete disclosure of my portfolio. This list is only of those scripts which constitute more than 1% of my portfolio. Nevertheless, I am also disclosing in the text below if there were major changes in the rest of the portfolio.

Stock Latest Price Inv. Price Overall Gain % Portfolio %
IDFC (97) 148.25 133.3108609 11.21 10.55%
Oberoi Realty (64) 242.15 238.5116518 1.53 8.96%
eClerx Services (18) 1,347.80 1029.558952 30.91 2.82%
ILandFS (36) 20.2 15.32131761 31.84 2.39%
Larsen (22) 1,597.70 1096.596358 45.7 2.13%
Cummins (4) 720.05 411.2417355 75.09 2.12%
MPS (14) 712.4 128.6641026 453.69 2.12%
Indian Hotels (20) 104.8 73.70118644 42.2 1.88%
Selan Explore (28) 487.9 317.7249493 53.56 1.83%
IRB Infra (18) 254.5 90.26702128 181.94 1.82%
NMDC (28) 168.3 133.9162406 25.68 1.71%
Mayur Uniquoter (11) 430 111.0322327 287.27 1.67%
Balkrishna Ind (11) 756.3 232.4213927 225.4 1.61%
Kaveri Seed (13) 915.45 296.6391304 208.61 1.60%
HPCL (13) 522.15 470.71725 10.93 1.59%
Bharat Forge (9) 801.4 272.25 194.36 1.59%
Shilpa (11) 539.65 370.2180563 45.77 1.49%
Munjal Auto Ind (11) 117.45 33.99787765 245.46 1.43%
PTC India Fin (6) 50.1 14.68682894 241.12 1.36%
Oriental Carbon (9) 382.6 113.2114733 237.95 1.34%
Muthoot Cap (11) 253.2 97.38 160.01 1.33%
Ajanta Pharma (14) 1,887.60 1007.725543 87.31 1.32%
Sesa Sterlite (3) 253.05 150.9941003 67.59 1.31%
Sun Pharma Adv (19) 196.5 123.5597701 59.03 1.30%
EID Parry (13) 218.85 141.47 54.7 1.30%
Poly Medicure (7) 833.15 280.2228601 197.32 1.22%
PI Industries (11) 429.9 171.8891892 150.1 1.21%
Hind Zinc (18) 168.95 121.9935484 38.49 1.20%
RS Software (11) 630.9 204.2701613 208.86 1.19%
Grindwell Norto (7) 526.05 256.5177241 105.07 1.16%
TCS (9) 2,558.20 1953.9 30.93 1.13%
Reliance (7) 979.25 810.3029891 20.85 1.10%
Sobha Developer (14) 430.9 314.4363636 37.04 1.08%
Akzo Nobel (5) 1,299.05 1027.196154 26.47 1.03%
Tata Inv Corp (13) 556.5 404.9865 37.41 1.02%
ICICI Bank (9) 1,614.05 948.6365854 70.14 1.01%

The movement towards consolidation continues. However, this is also tempered by the fact that I have bought new scripts in the last two months. Nevertheless, the number of scripts which have at least a 1% contribution to my portfolio is 37 (compared with 33 at the beginning of September 2014), and together they constiture 71% of my portfolio. As before 32% of the portfolio was invested in the top 8 scripts.

What have I been buying in the last two months? And what did I sell?

Well, I continued to purchase IDFC, Oberoi Realty and IL&FS Investment Managers, averaging down as the stocks fell all of September, and most of October. It requires great guts or folly to keep buying in the face of negative outcomes from a stock price point of view, and sometime in November, I hope to have a post which will talk about these dilemnas.

I also purchased a significant quantity of L&T and TCS, again as they fell. In addition, I added a small quantity of Jaypee Infra, Sobha Developers and DLF, when they fell rather sharply because of a weak real estate environment and negative news flow.

In general, I have also resolved to improve the quality of my portfolio, from a cap goods, finance and realty bias to more quality names with better moats. To this end, I made significant purchases of Indian Hotels (Convertible Debentures) Akzo Nobel (which now is in the list of 1% stocks), United Spirits (which is almost there), and Dr Reddy’s Labs.

In terms of my older themes, I bought significant quantities of Reliance, Bayer CropScience, India Bulls Housing Finance, Gujarat Pipapav Port, and Vardhman Testiles.

What did I sell? Only RS Software at a time when the stock really shot up. At that price of 730 or so, the stock is more expensive than say EClerx, and EClerx has a superior track record of governance, disclosure, earnings, and dividends. I still own significant RS Software, and given my purchase price, I will evaluate my position only after a quarter or two.

Portfolio Composition and changes in August 2014



Here is the list of stocks which constitute 1% or more of my portfolio:

Stock Latest Price Inv. Price Overall Gain % % of Portfolio
Oberoi Realty (52) 255.15 239.2 6.68 9.59%
IDFC (77) 142.35 130.0 9.52 8.14%
eClerx Services (17) 1,345.00 1026.5 31.02 3.23%
ILandFS (31) 20.35 15.0 35.95 2.65%
Selan Explore (28) 562 317.7 76.88 2.45%
Cummins (4) 699.3 411.2 70.05 2.39%
IRB Infra (15) 257.3 81.3 216.29 2.09%
Larsen (16) 1,581.85 1024.8 54.36 2.04%
NMDC (27) 177.85 133.0 33.75 1.99%
Bharat Forge (9) 856.75 272.3 214.69 1.97%
Mayur Uniquoter (11) 434.25 111.0 291.1 1.95%
Kaveri Seed (13) 930 296.6 213.51 1.89%
MPS (14) 545.1 128.7 323.66 1.88%
Balkrishna Ind (11) 752.6 232.3 223.92 1.86%
Shilpa (11) 517 375.1 37.84 1.74%
Sesa Sterlite (3) 279 151.0 84.78 1.67%
RS Software (14) 539.6 206.5 161.29 1.56%
EID Parry (13) 220.6 141.5 55.93 1.52%
Sun Pharma Adv (18) 197.85 121.9 62.27 1.48%
PTC India Fin (6) 44.15 15.0 194.98 1.41%
Hind Zinc (18) 165.1 122.0 35.34 1.36%
Indian Hotels (13) 96.55 59.9 61.06 1.35%
PI Industries (10) 437.6 159.0 175.23 1.35%
Ajanta Pharma (14) 1,604.10 1007.7 59.18 1.30%
Grindwell Norto (7) 490 256.5 91.02 1.25%
Munjal Auto Ind (11) 84.7 34.0 149.17 1.20%
Tata Inv Corp (13) 561.45 405.0 38.63 1.19%
Oriental Carbon (9) 290 113.2 156.17 1.17%
ITC (21) 349.95 307.0 13.99 1.11%
NTPC (6) 141.3 130.2 8.51 1.07%
ICICI Bank (9) 1,548.75 933.8 65.85 1.05%
Sobha Developer (12) 465.5 288.6 61.28 1.03%
Banco Products (2) 142.1 56.2 153.02 1.00%

The stocks representing more than 1% of my portfolio now constitute 68% of my portfolio, and the number of stocks are 33. 32% of the portfolio is represented by the top 8 stocks. I fully intend to concentrate further, so that the top 8 stocks represent 50% of the portfolio.

However, the concentration of scripts has hurt me, since my top stocks, Oberoi Realty, IDFC, Selan Exploration, and IL&FS Investment Managers have significantly underperformed the market in the last couple of months. The only one amongst the top 5 which saw outperformance was eClerx Services. Other top stocks which underperformed included Mayur Uniquoter, IRB Infra, BKT and Sterlite and Shilpa.

The three stocks which saw major outperformance was my old favorite MPS Ltd., and Kaveri Seeds. NMDC and Larsen, while not majorly outperforming in the month, gave me the benefit of buying these stocks on dips in July.Old favorite Cummins continued to do well. Another stock that did well in August was SPARC. PTC India Financial Services and RS Software did remarkably well in August.

What new stocks did I buy? I bought some Exide and some Amara Raja, since both constitute a nice duopoly, I bought HPCL, because there is tremendous value embedded in the company, with or without GOI policy issues, I bought Kitex Garments on a ValuePickr recommendation, Mazda Ltd and Linc Pens on my own reading of the balance sheets and potential. I added to Indian Hotels on a dip after the result. I bought HIL on an India Nivesh Recommendation. Finally, I continued to buy IDFC on dips.

Performance Tracker for August 2014

Here is a graph of my investment performance in August 2014:

 

While I continued by relative performance over the other benchmarks, I am still quite disappointed with my performance in August 2014.

Why is this? Well look at the table of rolling returns below:

Returns My Portfolio Kotak Classic SBI Midcap Nifty
Last Month 6% 5% 7% 3%
Last 3 Months 18% 9% 18% 9%
Last 6 Months 64% 31% 41% 30%
Since Nov,8, 2013 85% 36% 67% 32%

So, while my portfolio still outperformed the large caps, the one month and 3 month performance over the SBI Midcap fund is disappointing.

Why was this so? Partly, I think because IDFC and Oberoi Realty have now a nearly 20% share of my portfolio. And these shares are hardly moving. As a result, the overall portfolio performance is getting muted. While this is disappointing, I still believe strongly in both stocks. And I am using the relative underperformance of these two stocks to buy more.

On a more positive note, the total assets being managed by me have grown to nearly 3 times what it was in November 2013. Part of it is a nearly 80% jump in the NAV. Partly, it is more investment.

Given that I believe we will have a secular bull run for some years if the Modi government performs, I intend to deploy more funds in the market. However, now each stock I intend to purchase is going to have some thing going for it, which is aside from government regulations, and which is unlikely to perform very poorly, if the promised economic agenda does not materialize.

 

 

Portfolio Composition and Changes in July, 2014

Portfolio Composition, July 2014

 

Here is the list of stocks which comprise more than 1% of my portfolio at the end of July 2014.

Stock Latest Price Overall Gain % Percentage of Portfolio
Oberoi Realty (49) 251.9 5.34 10.23%
IDFC (71) 149 15.87 8.57%
eClerx Services (17) 1,284.95 25.17 3.40%
ILandFS (25) 24.85 75.91 3.16%
Selan Explore (28) 585 84.12 2.80%
IRB Infra (15) 249.1 206.21 2.23%
Mayur Uniquoter (11) 430 287.27 2.13%
Balkrishna Ind (11) 769.9 231.37 2.10%
NMDC (26) 169.8 28.28 2.06%
Larsen (14) 1,469.15 45.25 2.03%
Cummins (4) 606.9 49.22 1.93%
Shilpa (11) 514 37.04 1.91%
Sesa Sterlite (3) 282.5 87.09 1.86%
Bharat Forge (9) 722.25 165.29 1.83%
Kaveri Seed (13) 700.15 136.03 1.57%
Ajanta Pharma (14) 1,664.60 65.18 1.49%
EID Parry (13) 190.65 34.76 1.45%
Hind Zinc (17) 162 33.88 1.43%
Sun Pharma Adv (18) 168.2 37.95 1.39%
MPS (14) 348.05 170.51 1.32%
PI Industries (10) 383 140.88 1.30%
RS Software (14) 407 97.08 1.30%
Tata Inv Corp (13) 539.4 33.19 1.26%
Grindwell Norto (7) 420 63.73 1.18%
Indian Hotels (8) 94 75.65 1.18%
Munjal Auto Ind (11) 75.75 122.84 1.18%
NTPC (6) 140.45 7.86 1.17%
Oriental Carbon (9) 264 133.2 1.17%
PTC India Fin (6) 33.15 121.49 1.17%
ILandFS Trans (15) 228.7 70.18 1.17%
ITC (20) 349.6 14.84 1.16%
ICICI Bank (9) 1,474.00 57.85 1.10%
Muthoot Cap (10) 170 80.81 1.07%
Tata Steel (4) 549.9 100.66 1.07%
Sobha Developer (12) 438.8 52.03 1.07%
TCS (7) 2,515.10 42 1.03%
Banco Products (2) 129.5 130.58 1.01%
Reliance (6) 975.4 29 1.01%

What has changed? For one, I have spent all of July 2014, increasing my stake in Oberoi Realty and IDFC. This was as per my earlier stated intention. Now, both stocks comprise around 10% of my portfolio. This is essentially in keeping with my objective to concentrate my portfolio. Sometime this month, I will write about my investment rationale for both stocks.

I sold all of my Clariant Chemicals, simply because it had risen out of sync with possible valuations, and invested the proceeds in eClerx services. Increasing my exposure to eClerx was also my stated intention in earlier posts.

I also increased my exposure to NMDC and Tata Global Beverages, on a dip in prices of both. I increased my holding in Shilpa Medicare and PI Industries (PI following nice results). Finally, poor Larsen and Toubro results for the quarter resulted in sharp dip in prices, which I bought into.

I sold out of Morganite Crucible, more for the sake of not investing in stories without any technological or brand edge. Instead, I dipped my toes into Bayer CropScience, and on the MNC theme, increased my exposure to Grindwell Norton. Finally, there was some buying of PTC Indian Financial Services and IL&FS Investment Managers, both on a relative dip in market prices.

Concentration continues apace. The stocks which comprise at least 1% of my portfolio are now down to 38, and the total percentage of these in my portfolio is now more than 75%.

My eventual aim is to increase the concentration even further, with 25 scrips comprising around 90% of my portfolio.

What stocks gave the best performance in July, 2014 within my portfolio?

IDFC for sure, following the RBI announcement on CRR and SLR requirements on infrastructure loans. IRB Infra, following a decent result, and positive government announcements for the roads sector. IL&FS investment managers, despite becoming ex-dividend.

From the ValuePickr basket, Ajanta, PI, Mayur and Shilpa, all gave great returns in July.

Another great stock last month was Bharat Forge.

Investment Performance in July 2014

After a relatively muted performance in June, July was again more of the same. Part of this was the overall relative poor performance of the markets. As far as my portfolio was concerned, there was outperformance vis a vis the Nifty, and I finally managed to outperform the small cap index too, but compared the SBI Magnum Midcap fund, the performance was not better.

Nevertheless, there was reason enough for satisfaction. My performance might have been even better, had I not lost some money in speculation based short term trading. I am still not able to do this well, and maybe I should just stop doing it. That, or I need to control my psychology better.

Here is the familiar graph of overall fund performance. As you can see, the total assets undermanagement are increasing very rapidly. This is because I am deploying fresh cash, and also because the portfolio is doing well.

 

I have tried to improve upon the graph a bit. I hope this is more intelligible than the earlier version.

Also, as always, a table of rolling returns:

Returns My Portfolio Kotak Classic SBI Midcap Nifty
Last Month 5% 1% 5% 2%
Last 3 Months 42% 14% 24% 15%
Since Nov, 2013 75% 28% 56% 26%

As you can see, since Nov 2013, my portfolio, in terms of the NAV, has increased by 75%. The Nifty, meantime, has increased only by 26%, and the SBI Magnum Midcap fund, by 56%. In a blended sense, between the Kotak Classic Fund and the SBI Midcap Fund (Blended in a ratio of 1:2. similar to the ratio of large caps to small caps in my portfolio), the outperformance in 3 quarters is around 30%.

As always, to understand how the NAV for my portfolio has been arrived at, I would refer you to the following post: Understanding the NAV Calculation

Investment Performance in June 2014

After the blowout outperformance in May 2014, my portfolio performance in June 2014 was somewhat muted, relatively speaking.

Here is a graph of my portfolio performance:

 

Here is a table of returns:

Returns My Portfolio Kotak Classic SBI Midcap Nifty
Last Month 7% 5% 7% 3%
Last 3 Months 35% 17% 20% 18%
Since Nov, 2013 66% 27% 48% 23%

As you can see in the table above, my portfolio outperformed the Nifty by 4% last month. Over the last 8 months, this outperformance has been a whopping 43%. However, it has been the time for Small Caps and Midcaps. And my porfolio consists largely of such small caps and midcaps. Compared to the SBI Midcap Fund, my porfolio performance is not as phenomenal. In the last month, the performance has been in line.  And the BSE Small Cap Index has actually eclipsed my portfolio, though not by more than 0.5% over 8 months.

What went up? Ajanta Pharma and R.S. Software, both stocks accumulated in the last 3 months. Clariant, another favorite of mine. Muthoot Capital Services, Balkrishna Tyres, Bharat Forge, IRB Infra and Mayur Uniquoters. In short, a bunch of Midcap and Small Cap stocks.

Portfolio Composition at the end of June, 2014

I am trying to maintain the discipline of disclosing my portfolio over the weekend after expiry in every month.

Notable purchases during the month include a significant increase in my holdings in IDFC and Oberoi Realty, and an increase in my holdings in Idea Cellular and an initial position in Tata Global Beverages. I also bought a reasonable amount of Sabero Organics as a special situations play. Amongst small caps, I created small positions in Morganite Crucible and Mazda Engineering. I trimmed my holdings in JP Infra and in Alkyl Amines.

I have too diversified a portfolio. Over a period, it will only became like the Nifty Junior. I am therefore trying to increase the concentration in my portfolio, and for the moment, two stocks, IDFC and Oberoi Realty are in my focus. I intend to increase my holdings further. I will give an investment thesis on both next week.

I am also increasing my exposure to Idea Cellular, though at a slower clip than the above two. The reason is simple, telecom stocks have got back pricing power, and the eminent entry of Reliance Jio, to my mind, is an overblown fear. Reliance has not demonstrated that when it comes to engaging the consumer that it is better than competitors. This is true for its previous telecom foray, as it is true for its retail foray. I have little doubt that they will be a serious player in the telecom space, but existing telecom players are not going to roll over and die. Idea’s balance sheet is the best amongst Bharti, RCom and Idea, and it is executing its plan well. This can be a FCF business of high proportions.

Sabero Organics was bought mainly from the point of view of merger with Coromandel International. The merger should not happen within a month or so, and buying Sabero today means buying Coromandel at a 7% or so discount.

Stock Latest Price Inv. Price Overall Gain % % of Portfolio
IDFC 128.35 112.35 14.24 4.05%
ILandFS 23.4 13.81 69.46 3.50%
Selan Explore 594.5 317.72 87.11 3.46%
Oberoi Realty 259.1 204.00 27.01 3.36%
Larsen 1667.3 949.93 75.52 2.48%
Cummins 639.3 406.70 57.19 2.47%
IRB Infra 224.6 81.35 176.09 2.44%
Balkrishna Ind 735.9 232.34 216.74 2.43%
Sesa Sterlite 289.35 150.99 91.63 2.32%
Mayur Uniquoter 374.5 111.03 237.29 2.25%
Clariant 861.05 617.20 39.51 2.12%
NMDC 178.95 121.65 47.1 1.96%
Kaveri Seed 721.2 296.64 143.12 1.96%
EID Parry 209.4 141.47 48.02 1.93%
Bharat Forge 608.25 272.25 123.42 1.87%
Hind Zinc 163.9 121.00 35.45 1.76%
Ajanta Pharma 1522.6 1007.73 51.09 1.65%
Sun Pharma Adv 160.25 121.93 31.43 1.61%
MPS 345.45 128.66 168.49 1.59%
eClerx Services 1159.8 866.27 33.88 1.56%
Indian Hotels 102.3 53.51 91.16 1.56%
Tata Inv Corp 547.15 404.99 35.1 1.55%
NTPC 152.25 130.22 16.92 1.55%
Sobha Developer 511.55 288.64 77.23 1.51%
Munjal Auto Ind 78.5 33.99 130.93 1.48%
Oriental Carbon 269.9 113.21 138.42 1.46%
Syndicate Bank 157.85 69.59 126.83 1.29%
ITC 319.75 304.43 5.03 1.28%
PI Industries 329 144.63 127.48 1.28%
ILandFS Trans 206.8 134.39 53.88 1.28%
Reliance 1012.1 756.12 33.85 1.27%
PTC India Fin 31.55 13.93 126.5 1.27%
ICICI Bank 1384.65 933.81 48.28 1.26%
Tata Steel 518.9 274.05 89.35 1.23%
Grindwell Norto 408.25 231.16 76.61 1.20%
Muthoot Cap 156.75 94.02 66.72 1.20%
Bajaj Electric 336.5 209.83 60.37 1.19%
TCS 2399.55 1771.20 35.48 1.19%
VST Tillers 1766.55 421.86 318.76 1.17%
Banco Products 115.4 56.16 105.48 1.09%
Poly Medicure 503.35 278.36 80.83 1.08%
RS Software 276.4 206.52 33.84 1.07%
Sasken Comm 220.45 180.30 22.27 1.07%

This constitutes 79% of my total portfolio. I am disclosing those stocks which constitute more than 1% of my portfolio. IDFC has gone up from 3.4% to 4.05%, even without any price increase. Oberoi Realty has gone up from 2.4% to 3.4%. I fully intend to have both of these at 10% within the next 2 months.

Portfolio Changes in May

In May, my largest purchase was Ajanta Pharma. Ajanta Pharma has been a favourite of the www.ValuePickr.com forum, because this was one stock which has had remarkable operational performance. I could never purchase Ajanta earlier, even though everyone at ValuePickr has it as one of their top picks. I used to think of it as expensive, so I gave it a miss, in favour of stocks like Avanti Feeds, Kaveri Seeds, PolyMedicure, Mayur Uniquoters, and VST Tillers, also from the ValuePickr stable. But the recent Pharma underperformance in the stock market, and Ajanta’s continued operational outperformance, meant that Ajanta again looked cheap, after its results in May, around a level of 1050. So now, this has the some decent weight in my portfolio. I expect gains to be muted, till Pharma becomes a market darling again. But it is in stocks which are not market darlings where bargains are to be found.

I also added more of RS Software, simply because there is great value in the stock. Currently, again, in line with the IT trend, it is not going anywhere. But I am patient. I also added some EClerx, because of a price drop. This is a company which I like very much, and I will keep adding, as the price keeps falling as the dollar keeps falling. I don’t think the market has even understood that EClerx performance this year will be unaffected by the dollar-rupee equation, since the entire revenue is hedged at higher dollar rates. It is next year, that performance will be adversely affected.

I also added some quantity of Akzo Nobel. I wish I had a chance to invest more, but the price ran up. Makers of Dulux paints, it will be a key beneficiary if the Auto and Housing sectors revive. I think this is a great company, and along with Clariant and Cummins, it will remain the core of my MNC portfolio.

I added some Munjal Showa, Muthoot Capital, Poddar Pigments and Kesar Terminals, all with dramatic gains after I purchased the stocks. All of them represent great value, and as the market runs out of value, I expect that all of them will see a dramatic PE rerating.
What about sells? I finally sold out of MCX, at a small profit. I still think it could potentially give a great return, but the uncertainties in terms of stake divestment and regulatory overhang are simply too high. Not worth it for a relatively risk averse investor, especially when the markets have some many other stocks going up.

I also sold out of Igarashi Motors, with a nearly 100% return. I still think this is a great company, but it is too export dependent, and performance will suffer with the dollar falling. I will return to it some other time.

I also sold some NTPC (bad call, it rose sharply after I sold), and BKT and Cummins. I sold small portions of my total holdings in all 3. NTPC, because in this market, it is not worth holding on to an annuity stock. I intend to get rid of it completely. BKT, because of dollar rupee concerns for a pure exporter, and Cummins-well, selling Cummins was a mistake. The only saving grace is that I sold a small portion of my portfolio holding.

I also sold JB Chemicals (invested in Ajanta instead) and Alkyl Amines Chemicals. Alkyl Amines Chemicals will suffer due to alcohol prices going up in this year. I also sold Balaji Amines because of the same reason. I also sold GMM Pfaudler, because I did not like certain related party transactions they carried out. Maybe it was a mistake to sell.

Investment Performance in May 2014

Here is a graph showing my investment performance in May 2014. This investment performance should be seen in the context of the hedging that I had carried out, to protect myself on the downside in the case that the election results would be unfavourable to the markets. This is despite my being reasonably certain of the results. However, sometimes one believes what one wants to believe, and I think it was prudent to, when faced with an event that could cause a catastrophe in the markets, protect one self on the downside. What I did is that I purchased Mayend out of the money put options, with strike prices 5% to 10% lower than the Nifty and the Bank Nifty on the date of purchase. Why the Bank Nifty? Well, I have mostly small and midcaps in my portfolio, and in the case of an unfavourable result, the likelihood that my stocks would perform worse than the Nifty was a given. On the other hand, the Bank Nifty moves more closely to my portfolio, so I preferred to hedge with the Bank Nifty. I wish it was possible to trade in Midcap Nifty options, but those options are not enabled.

The portfolio performance below includes the cost of the options, which of course, given the sharp market upmove, expired without any value.

Portfolio performance cannot be assessed without understanding the risk the portfolio carries. This was one key takeaway for me from the book by Howard Marks, The Most Important Thing. In this case, the risk that I carried on May 16, 2014 (Election Results Day) was much lower than most other investors, who were not similarly hedged. Hence, if I had a lower performance than my benchmarks, I would not (or should not) have been unhappy.

With the caveat above, I present the graph below with my performance for the month.

As you can see, I had a blowout month. I far outperformed the Nifty, and the Kotak Classic Fund. I did much better than the SBI Magnum Midcap Fund.

This is also understood in the table below:

Returns My Portfolio Kotak Classic SBI Midcap Nifty
Last Month 21% 9% 11% 10%
Last 3 Months 38% 17% 17% 18%
Since Nov, 2013 55% 21% 39% 20%

Since November 2013, I have returned 55% on my portfolio. The SBI Midcap Fund returned 39%, while the Nifty returned 20%. In May alone, I outperformed all 3 of my benchmarks by at least 10%, inspite of my portfolio being hedged.

Reasons to be proud. Whether this result is due to luck in the timing or particular choice of stocks, or some small ability, we will see in the long run.

Investment Performance in April 2014

From this month, I also want to present this graph in a tabular form, to make it easier to understand. This is available below.

April was not such a great month. I only marginally outperformed the NIFTY, and probably underperformed the SBI Midcap fund, but not by much. This also brings the annualized portfolio performance into poor light, down from the over 100% run rate from the previous month.

Some of my top holdings underperformed severely last month. Cummins, Selan, IDFC, Larsen, Oberoi, Mayur, MPS, Sesa Sterlite and NTPC all fell last month, and these constitute 7 of my top holdings. I also exited Just Dial (at a loss), and MCX, though my holdings were rather small. Stocks which performed well last month included PTC India Financial Services (PFS), Clariant and Jaypee Infra.

All in all, a disappointing month. Depending on election results, we will see how the future plays out.

Returns My Portfolio Kotak Classic SBI Midcap Nifty
Last Month 1% 1% 1% 0%
Last 3 Months 23% 9% 13% 12%
Since Nov, 2013 29% 12% 26% 9%