A bouquet of 5 shares

[clive]

I want to try something as a simple long term trading strategy.

Have read dozens of articles of how it is not possible to time the markets ( and also dozens more saying the opposite of course). They say the best possible investment strategy is to invest a regular amount per month like a SIP. What I don't like is the fact that most of these articles recommend SIPing in a mutual fund. Which to me does not make sense...

A mutual fund manager is trying to time the market himself.. So basically we are simply paying him fees to do something that we have decided is not the strategy to follow!!

So what I want to do is select a basket of X number of stocks.. say 5. And invest a certain amount of money in each of them every month... These stocks would have to be varied in industry as well as size..

For example I would have 1 FMCG stock, a couple of large caps, 2 mid caps and maybe even one small cap i believe has the potenial for massive growth.

If YOU were to choose a basket of stocks to invest in for the long term.. What would your basket contain? ( A small explanation of why you choose what you did would be helpful for the forum)

clive

P.S. I'm off to research my own basket and i'll put my answer here too..

 

[shorttermer]

hey,

my basket would be :-

1. Marico - FMCG
Consistent growth - strength in weak markets, always paying a fair price. management seems focussed. market leader in product categories, and seems to hard-B*** out competition. growing in every sector making new sectors and consolidating well... a buffet kind of stock i dont mind owning till im dead.

2. Amtek Auto - Auto Ancilliary
Decent fundamentals. Sector has greath growth potential... the fact that the promoters bought back shares inspires confidence. seem to on an inorganic growth part, and will hopefully become a med-large cap soon.

3. ITC - Diversified
I'm biased to this stock. Ive interacted with many strata of management in both ITC and L&T, and you see a whole difference in calibre of management. ITC is on the warpath as far as growth and they're growing in every which way. i think it will be the biggest wealth creator in the next 10 yrs, among the Sensex cos.

4. Suzlon Energy - Power
Great order book, great prospects. Wind has turned out to be the most viable and cost-effective substitute for fossil fuels and though it is a bit of a gamble, i would park a lot of money in this baby

5. RIL - Oil & Gas
I dont know how they do it, but this is consistent stock appreciation. Mukubaba has gotten ridden off Anilbaba, i think for the better, and with it the loss-possible Infocomm. Their retail ventures is going to add a lot of value to the stock - ala Pantaloon, and knowing reliance style will go for the competition's jugular big time

thats mine... please feel free to criticize or correct if reqd.

btw - i am currently wanting to build a portfolio with these stock... just waiting for a major correction or crash... but no installments for me.

regards,

shorttermer

 

[clive]

Nice basket shorttermer...

Suzlon and RIL are two stocks I'd like to have too..

Since you did make the point about waiting for a correction.. I'm putting a lil bit of market timing in my SIP policy too.. What I plan is to have my cash ready by the first day of the month - but I will only invest somewhere between the 1st and 15th day of the month - on a day when the prices of my stocks fall a bit due to overall bear market all around. If such a scenario does not take place by the 15th, I buy on that day whatever the price.

A little simplistic I know.. but who knows.. sometimes the simple things work!

 

[shorttermer]

hi clive,

sounds good, because in long-term, the prices bought factor in less, in relation to the long-term appreciation. but still i am going to use more long-term specific TA for my purchases.

best of luck clive,

regds,

shorttermer

ps - any seniors pls contribute to this thread, it should be interesting

 

[sks]

your portfolio is good..still i believe that u should remove suzlon..this share is already appreciated...still, i do not doubt the growth of this company..it is a company of good fundamentals....name of the game is "invest" and not "trade".....instead you can opt for India Cements or Gujarat Ambuja.. i personally believe that cement will do good this year..u can also opt for sugar..

sks

 

[SAN]

Dear Clive
U may pick any 5 its all u'rs. But here's the pussy to FINANCIAL BONDAGE with DALAL STREET.

***U've got a basket fine.U are in an Orchard of Apples all U've got'a do is enter it in the correct time [Just after the correction I mean].Take 5 of u'r choice young ones of course. Wait for some time.U see one or some or all turning ripeing
case 1: eat it. wait for the next season [correction] do the same as
before.
case 2: eat it. throw the seeds back into the orchard. u see them grow.mature and fruit [splits dividends etc.] .go back to *** and then come back to case 2.
case 3: Let thy apples rot to oblivion.

 

[rangarajan]

Dear SKS,
I note you are from Dwaraka & my request is absolutely irrelevant to this thread.
I am interested in undertaking a pilgrimage to Pancha Dwarakas.Could u pl tell me from where to start,stay(Veg),mode of transport,distance,time to cover,best period to visit & other small things.I am located at Chennai.To avoid inconvenience to other members from encroaching their space,kindly email to me at [email protected]

 

[shorttermer]

Hi San,

Yeah, thats a great trading strategy, but we're talking about lo-o-o-ng term investments. but i loved the metaphorical putting of it... .

about suzlon i agree its valued factoring in too much growth, but:-

1. ill wait for and if there is deep market correction (which i hope)
2. im looking at a 10+ year perspective, for that i dont think they have factored the growth possible,

but in principle i agree its gone very far in terms of price to current value.

shorttermer

ps- saint, other seniors pls give us you 5 picks.

 

[karthikmarar]

Shorttrermer

Some of my thoughts after reading the posts here

+10 years perspective ! for shorttermernice In my opinion 10 years is too long a period. Let us take for example HPCL. In 1995 the share was issued at a price of 335 per share. At that time it was considered a hot long term investment. By the year 2000 the share value almost dropped to 100. Then it rallied to 540. Now languishing around 300.
Consider two situations. Mr.X bought the share at 335 with a 10 year perspective and today he will be at a loss considering the current price and the interest cost. If Mr.Y had bought the shares at 335 with an eye to maximize the profit. He would have sold the share during correction in the late 1990s. He would have bought the share about the say 150 when the share was recovering from the low of 100. He could have sold again in the correction from 540, let us say at 500. Then he could have bought them again at the current lows of 300. Assuming that he was reinvesting the same money he would be owning at least 5 time the shares he owned in 1995. If he was very smart he would have made use of every high and every correction and he would be owning much more. Simple .. isnt it?

In my opinion letting you money just sleeping in one stock for 10 years is not a smart thing. Maximize by making use every bull market and correction. You will be much richer. Through this forum we are all trying to become smart Investors. isn't it.Also if you check the history.. many of the hot stocks of the 90s have become inconsequential now. Food for thought..eh..

Also the regular monthly investment in a particular stock is also not very smart either.
A better strategy would be to add on corrections during the bull market. Go cash on bear runs.

Actually I find this SIP business a little dicey. A sales gimmick by Mutual fund Managers? But then it is a different topic altogether.

Petronet LNG would one of my picks for longer term investment. Considering the energy scenario Gas may be considered a future fuel. I expect this to be a multi-bagger. One can consider GAIL or ONGC, But I would bet on Petronet as it is available at affordable prices and the growth potential is great. ( by the way it is the best money maker for me this year). Of course I am all for ITC. Considering the boost for infrastructure for next few years one can consider IDFC. I would consider NTPC also.

Regards

Karthik

 

[cdrao123]

nice topic to discuss.I believe that the 5 scrips chosen should belong to different sectors and with growth potential.So my selection would be
1-ITC 2-HLL 3-Pfizer 4-Bajaj auto 5-rel energy.
If one were to choose from smaller prize range,then it would be-1-PTC
2-Petronet Lng 3-LG bros 4-IDFC 5-FDC.
Detailed performance /results can be studied from bseindia.com
cdrao123