What I got right and what I got wrong in 2013…..
For me the year 2013 was a dramatic trading year. Very different from my normal years – paid much more brokerage in 2013 than I did in 2012. No not cribbing about my broker’s earnings – he did EXTREMELY well unlike many of his colleagues who closed down. It was really a terrible year for the brokerage industry. 3 big brokers called me saying ‘If we do training will our brokerage income go up?’ – and I did not have an answer.
My trading this year was helped by 4-5 rounds of buying and selling of Bharti Airtel and Reliance Industries. Currently I still hold an investment position in Reliance (as of 01 Jan, 2014), a very very small portion of Bharti but no trading position.
I guess I was also very lucky when I sold Coromandel International and EiD Parry at very good valuations. Not that I was pessimistic about these companies, but in a weak market, I did not find any reason to be holding on to a position which I knew I could buy into later. Lucky because I bought lot of shares of Liberty – and the merger of Liberty into Coro gave me a very very good arbitrage opportunity. Fair enough to say when Coro was sold at 325 I had no clue that I will be able to replace it by buying it at about 110 (Liberty!).
EiD parry I sold because the government is s….g up the sugar industry and that is not good. Also when Cargill plant ran into fuel problems, etc. the interest burden took a toll on its EPS. So a short term strategy was to sell Eid and sit on cash till it fell. Thank God, it obliged, and I have bought it back.
In the middle of the year enthused by a falling rupee I picked up a lot of auto ancillaries – Pricol, Sona, and of course the best of them all Tata Dvr and Ashok Leyland. Ashok Leyland and Sona I got lucky – I bought at almost at the lowest recorded price and decent quantities. Ashok Leyland and Tata Dvr have of course done well, but Sona has more than doubled in 4 months. In fact closed a part of the position in Sona. Nice to take some money off the table in a rising market. Also nice positions in blue chips like Carborundum Universal (auto dependent did u know?), Timken, etc. helped.
Also did well with trading positions in cement – Ramco Cements, not so much in KCP, India cements (bought when thanks to BCCI vs Srini fight people thought cement will go out fashion!!!), Kajaria Ceramics (trading and investing), and the FMCG boom helping Essel Propack…
Still the most unbelievable money making deals were in Hindalco and Tata Steel!! At prices of 90 and 210 they were screaming buys. Simply screaming. Come on, way below book you could not have gone too wrong. Bought it for the long term but a very quick rise meant I sold off. Old portfolio positions on both continue.
Of course some trading in BFSI – I will not name the companies, but currently hold a position in some banks, went short and covered in one NBFC (happy to buy 5 year puts on this stupid company), and went long on Cholamandalam Finance apart from trading heavily in Chola.
Mistakes?
– One big blunder was buying Hindustan Oil at a high price. Did buy some at 30 too, but my big position was at 90+…and that hurts. I wish I had closed some part of the position. My mistake was missing out one very important news item about the company.
-In some counters not doing nice quantities.
-In counters like Cummins, Siemens, etc. NOT SELLING AGGRESSIVELY for covering – did very small quantities, could have done better.
– Holding on to one banking stock which is not moving – especially since it was a trading position.
– Having bought some psu shares for dividend yield. NTPC has been beaten down further. No clue why I thought when Cummins comes down, NTPC will be spared. Partially covered this mistake by shorting Coal India, but not aggressively enough, in terms of quantity.
-trusting old house managements. Need to review on 2-3 houses – standards seem to be slipping and that is scary.
– very aggressive bet on one group, COMPLETELY dependent on ONE MAN. If he dies, 14% of my equity portfolio takes a hit 🙂 Hope God gives him a long life. No. I will not name him.
…well, well over all a very good year.
Out and Out ‘gambling’ that I did was Deccan Gold and 3i Infotech. No great fundamentals to go by, but held long positions and exited at excellent profits. No longer holding a position in 3i Infotech, but still hold a decent size portfolio in Deccan…..
A few transactions ensured that I beat the sensex and of course the Tech – Tcs, Tech Mahindra, …and a few smaller ones helped. And the fact that the original portfolio contains Fmcg (read Pfizer, colgate,nestle, PnG, gillette, hul, ) helped.
pattu
When I read this, my first impression: ‘short-term capital gains nightmare’
May I ask how you keep track? Does your broker do this?
To me this post is the perfect answer to equity mutual funds or ‘direct equity’?
I choose the former. No nose for business.
Is it practical for a direct stock investor to only ‘invest’ and not ‘trade’?
shivam
Be kind enough and reveal ur broker
subra
Pattu – if u do ur trades through an E broker u still get quarterly statements for planning your advance tax, do u not? I get it from my broker – I have one broker. Obviously his software does it for me.
I am largely an investor but in directionless years it makes sense to trade – and 2013 was surely directionless.
Shivam my broker is big and well known, NO, he is not looking for new business – at least not the model which I use. Tremendous human interaction and technology for calculation.
pattu
Thank you. As is obvious, I know nothing about this.
J
Whats the return of portfolio from 1st Jan 2013 to 31st Dec 2013 ?? If consider only these items…and not shares which are held since more than a year…
subra
J no not on a public platform, but yes, far far superior to a buy n hold for a portfolio and far, far ahead of a tax adjusted return from any debt instrument.
shivam
Still I can try
Mira D
Thanks for sharing this.Very honest.
What is the proportion of your portfolio in terms of trade/ long term?
bharat shah
very nicely narrated.
from me to answer ‘ To me this post is the perfect answer to equity mutual funds or ‘direct equity’?’ by Shri Pattu.before year or so, i came across, wealth creation study by one well known broker, and found a good no. of companies gave fantastic return (price cagr over five yrs.) than the all non sectoral indices,even better than best of diversified eq. mf. I thought , it is better to invest in selected equity ,rather than diversified equity mfs. and such efforts could be easy for analysts like Shri Pattu , and i echoed in my comments on Shri Pattu’s blog. during the time i came across one (indian) equity portfolio by one international winner analyst of a (different) indian brokerage.it was of 20 co. equity shares (incidentally 75% of them from the wealth creation study, i mentioned)and designed/analyzed for 2 yrs holding as of now.i am following it along with my real diversified equity share portfolio. more than 6 months passed since then , and i found no. of companies are well known , and gave decent return, the overall return is a little less than my eq. portfolio.
during the time, new wealth creation study by the same brokerage published recently, and found that some 100 companies gave better cagr (price) averaging 17% better than sensex cagr 4% during 5yrs completed on march, 2013. during the period the best diversified large cap equity mf gave cagr @12.74% , less than 78 companies of the wealth creation report. however , i found that pms of the same brokerage has given less than that during the period. of course the said mf and pms gave far better than the sensex cagr of 4%.
so my learning is that for aam investor like me to be better with good diversified mfs than trying for direct equity or pms. my further logic is that some advisory companies have their mutual funds. and they will logically try to do better with those mutual funds with their research , so better be with them.
Krish
I am not sure why this hesitancy in India. No one want to discuss the portfolio size or willing to reveal. I am wary someone’s announcement that he/she got returns on one stock 50% and on other stock plunged by 25%. I don’t think it is worth discussing 50% returns on investment amount of 2K. However subra’s case might be different with a portfolio size running into 8-9 digits.
Why only balance sheet for corporates and they could be extended to individuals as well. The holistic returns on all portfolios combined should matter to anyone. Many americans are very upfront on this and I don’t see such transparency in India.