August 21, 2009

Performance

There is one key point missing in this blog – My portfolio details and performance. The omission is by design and there are several reasons behind it.

I have written in the past on my reluctance on sharing my portfolio in detail, especially the performance. I have disclosed my portfolio in the past (see here) and it has more or less remain unchanged since then.

There are several reasons for not sharing my performance. The key reason for not sharing the performance, is that a public display would put pressure on me and would in turn impact my investing decisions. Investing is tough enough and I don’t want to make it any more tough for me.

The second reason for not displaying the performance is that I want the readers to follow my posts based on the strength of the ideas I present and not the performance of my portfolio. The soundness of idea – sensible and rational value investing – does not change based on whether I perform well or badly as an investor. There are some investors who are far superior to me in performance and practise a similar approach. The performance of these investors is a reflection of their superior skills.

In addition to the above reason, I can choose to put any numbers as there is no independent audit of these numbers. I do not want to create a situation where the readers are always wondering whether the numbers on the blog are real or imagonary.

As you can see in the sidebar, I also publish my posts on moneyvidya.com. This association is non financial and i was contacted by the moneyvidya team in past to be a member of their core blogger team. I have posted my stock ideas on the website in the past few months and thought of sharing a snapshot of the portfolio performance.













A few caveats before you read too much into it.

- The above stocks do not represent my portfolio. They represent a few of my ideas which I decided to post on the website.
- The above is an equal wieghted portfolio of the picks which is not the case in my personal portfolio.
- The portfolio performance may not be a true reflection of my personal portflio in future as I do not have idea of how to take a stock off this model portfolio when I decide to sell it (maybe the moneyvidya team will clarify that for me)

So why publish this portfolio
A few key points stand out.

This dummy ( pun intended :) ) portfolio has been in the top 10% for the last 10 months ( I don’t know how that is calculated though by the moneyvidya team). This in a way shows the validity of picking good stocks and holding on to them.

This dummy portfolio has beaten the index by around 20% during this period. This period is too short to reach a conclusion, but is interesting as typical value investors generally under perform bull market and out perform bear markets.

Finally, not matter what I try to claim, there is a certain amount of bragging involved too. The reason why the last few months have been more satisfying, is that I have been able to follow my convictions, ignore the doomsday predicitions and commit my personal capital to my ideas. That is more satisfying than the gains themselves. I expect this approach to work in the long term irrespective of short term market fluctuations.

7 comments:

mkd said...

Hi Rohit,

Fair enough!

Regarding your portfolio,

Novartis - Earlier you had decided to exit due to management even though intrinsic value was not reached. Do you think it would make sense to hold assuming that management would try to make another open offer (higher than 450) to get upto 90% and delist?

Merck - I think they recently had a buy-back offer at 435. However stock is hovering around 390 probably keeping in mind the acceptance ratio. Would you still stick to Merck given the Novartis experience?

Thanks as always for your insights.

mkd

Rohit Chauhan said...

Hi mkd
regarding novartis, i have reduced my holding by 50% and still holding the rest. i may hold till i find a good idea to replace it ..but i dont plan to hold till the management decides to delist. i dont have an idea when the management will do so.

i am planning to read the emerck AR in detail soon and make up my mind on the company. the company is still undervalued, though very likely the experience may be similar to novartis. again, with emerck the plan is to hold till i find a good idea to replace it.

in case of novartis, inspite of all the irritation, my eventual returns have good, if not spectacular which has a good learning for me that business quality helps in reducing the impact of a bad management. ofcourse better option is to find a good business and good management

regards
rohit

karthik said...

HI Rohit,

Are there any Mutual funds in India which follows value investing or in the words of Bakshi " Zebras ready to graze outside the herd".

I would like a Mutual fund in my portfolio which does not act like an index fund ..

Gautam Kshatriya said...

Rohit,

Congratulations on your impressive track record. Hope to see you continuing to post stock picks on MoneyVidya.com.

Warm Regards,

Gautam Kshatriya
CEO MoneyVidya.com

Rohit Chauhan said...

Hi gautam
thanks ..though i have not been able to figure how to take off stocks once they have reached a point of sale ..

hi karthik
i would really doubt there are mutual funds that stand out ..it is too risky for the fund manager. that said , there are some decent mutual funds (atleast among all the ones out there). i have written about mutual funds in past ..you should be able to find them under the category of mutual funds

rgds
rohit

income.portfolio said...

Rohit,

There is a perceived notion that moneyvidya.com site is oriented toward traders and speculative stock picks. The long term value focused investors do not have any role to pay here. However, I believe it provides an excellent platform for all types of investors to be rated among the peers on a community basis. Yes, it would help to have a feature that allows removal of stocks at a future date. Although, I think that needs to be bounded by some aspect otherwise there will be a tendency of not closing winning position to keep ratings/returns higher.

Congratulations on the performance. It does show that ideas discussed on your blog are highly rated by an independent platform. It gives an independent rating to your ideas. Everybody touts their own horns, but there are very few to demonstrate it like you did.

Best Wishes,
TIP Guy

Rohit Chauhan said...

Hi TIP guy
gautam and his team has a good thing going

at the same time there are certain elements of the platform which does not gel with a long term approach - and i dont refer to the ranking

a. once a stock reaches full value, one would sell it. that is absent on the platform
b. portfolio wieghts - for most of us each idea is not equal wieghted. that is missing in the portfolio.

at the same time, portfolio performance and tracking is a complex subject and it is diffcult to build a logic which works for everyone