No, this is not a post…just a FB type of a comment.

When a public issue of L&T Finance was announced  many of the employees of the L&T group called me. Many of them were thrilled that they would be getting some ‘fixed quota’.

I am not sure if I could have got some shares too at Rs. 52 if  I had pressed the right buttons on my phone. Even the merchant banking fraternity was not terribly excited, but were sure that the issue would go through.

A few people asked me ‘Should I apply’ – I played the typical ‘how does it matter’ card saying ‘It is a part of a big Engineering company…blah blah…’

Then the tougher question: “Are you applying”

This was a more direct question. I said NO.

So the obvious  “Why?” and I said “The best shares in the business are ALREADY in my portfolio, why should I buy the also rans?”

Most of them gasped. Frankly when I had Hdfc and Cholamandalam in my long term wealth creators I did not see any reason to pick up other finance shares. I have played long in these shares – but have NEVER hesitated to sell and buy back at much lower prices. However this game I play on a small portion of my portfolio.

Most of the gaspers said ‘But Hdfc is already high, Chola best is already over….blah blah….’ Now some time later.. I am happy with my choice. Has LnT Finance done well in the markets? My view? Yes of course – it has gone up say double of what was being offered. In fact I got a chance to buy it at a price lower than what it was offered to me at in the IPO. However I have made much, much more money in my finance portfolio – do have a look – Cholamandalam, Hdfc, Hdfc warrants (sold recently), Hdfc bank, and Kotak bank. So sometimes when you have the best shares already in your portfolio, it makes no sense to get some shares of a similar genre JUST BECAUSE IT IS BEING OFFERED IN AN IPO. Nothing comes cheap, right?

Similarly when somebody offers me fertiliser shares I retort – I have Coromandel International and Tata Chemicals…

Recently when the government came with some really lousy (harmful to the soil in the long run) fertiliser policy, I sold Coro. Do I think Coro or Tata Chem should NOT be there in my portfolio? For heavens sake NO. I must have sold about 25%….and have ACTUALLY bought EID Parry (which holds 65% of coro fert!), and have stuck to the older EID parry already lying with me.

Tata Chemicals I did not even see the price fluctuation – it is a part of my dad’s portfolio – and continues to remain there for a few decades. One bad policy / good policy does not make any great change in my view.

So if somebody tells you..’Fertilisers is a dull boring industry, ask them to see the CAGR of Coro Fert over the past 10 years’. And fertilisers (like all commodities) give you fantastic trading opportunities too.

And if somebody asks you to buy a share in an industry where you already have the leader in your portfolio, just chill. So adding a TaMo DVR and Ashok Leyland – remember one is a global car player and the other is an Indian truck manufacturer – are 2 different businesses altogether!

If you own the best – LMW – I bought it when it was in 3 digits long ago enjoyed the bonus and split – but that did not stop me from buying it recently at 3900 and maybe adding more at 5400..it has been as per my cash availability. Its like food, eat whenever you are hungry, but train the stomach to be happy with whatever healthy food it gets!