One of the most neglected aspect do-it-yourself investors is performing a realistic assessment of their portfolios. I have adopted a very disciplined approach to make sure I follow my quarterly regime of reviewing the progress. First step was to check out the status. Second step is to understand risk, and third step is to make changes (or execute or re-balance if necessary).
In earlier post, I presented the progress update of TIPBlog portfolio. The next step is to analyze risk in the context of my personal risk profile parameters. The objective of this risk analysis is to make sure that TIP portfolio is not exposed to any particular event, or company, or any other aspect that will affect portfolio performance.
My portfolio management process has a risk management process in which I try to:
- Maintain pre-determined asset class allocation;
- Maintain pre-determined diversification, any sector should not exceed 10%;
- Any single stock should not exceed 7% of the portfolio; and
- Dividends from a single stock should not exceed 5% of total dividend cash flow.
Gujarat Gas Company Ltd. (GUJARATGAS) is India’s largest private sector company in natural gas transmission and distribution. As the name suggests operations are in state of Gujarat. It distributes natural gas to industrial, commercial, and domestic customers. British Gas Group has a majority of the stake of close to 65% stake in the company. Few key aspects that I like about Gujarat Gas are its business model of gas distribution and practically debt free balance sheet.
There are many different styles, approach, and methods of investing. Many individual investors focus on trading (swing, positional, momentum, speculation, technicals etc.), while many others focus of investing (value, growth, blend, etc), and still many others on special situations (opportunistic, arbitrages, etc). In addition, there are quite a few individual investors that attempt at combination of trading and investing. Similar to glass being half full or half empty, I believe every style has its own pros and cons’ depending upon in what context one is looking at it. Individuals have to figure out what works best for them.
Hero Honda Motors Limited (HEROHONDA) is India’s largest 2 wheeler motorcycle manufacturer in India. It has two manufacturing facilities at Dharuhera and Gurgaon in Haryana, which produce over 3 million bikes per year. It is has largest market share in excess of 50% in Indian two wheeler segment.
Tata Investment Corporation Limited (TATAINVEST) operates as an non-banking financial company. Its primary activity is to invest in long-term equity shares and other securities of companies in a range of industries. It is also engaged in management and distribution of mutual funds. 
Pidilite Industries Ltd.
Investing Success Comes from Conviction and Executing Your Ideas
We as individuals focus too much on one or two big time success or multi baggers, but ignore the importance of sustainability and consistency. We fall into the “Chalta hai” trap. Long term success is not built on few multi-baggers. Long term success is built on multiple average successes that are sustainable over time. Continue reading rest of this article…