I am Sid, a graduate from IIT Kharagpur (2012 batch) and IIM Bangalore (2016 batch) having experience in domains ranging from online marketing to manufacturing to financial services, from startups to MNCs. I love reading, travelling, mentoring.
I have travelled 24 countries thus far: Spain, Portugal, France, Italy, Switzerland, Sweden, Norway, Germany, Netherlands, Czech Republic, Monaco, Singapore, Malaysia, Dubai, Sri Lanka, Vietnam and a few others... intending to take it to 100+. That's my life goal, to be financially free as early as possible and travel the world with family and friends. And investing has a key role to play here.
Investment Journey: Phase 1 (2018-20)
My investing journey started in 2018 (study loans partially repaid) with mutual funds. Following the newspapers and past returns, over next 2-3 years, I kept adding money across 8+ different mutual fund schemes (right - 8). Parallelly, I was getting hang of direct investing - on some thesis. Just 20-30k INR, experimenting on quality stocks which were down for no fundamental / long term reason, say Infosys after that whistleblower policy, and likewise.
Phase 2 (2020-21)
Then came the Black Swann event of 2020 and with it, my mutual fund holdings down by 30-40% with no bottom in sight. A phase when I had limited free cash, but a thought - even if these 2-4 years are a mess. My thesis was - likely, likes of HDFC Bank or Reliance will still go on. Eventually we will have a vaccine or some cure. [Now I know, Optimism is the key in investing space] It does not warrant for them to be beaten down by ~40-50%. This is extremely attractive level. With that, whatever limited cash I had, I put it down likes of HDFC Bank and Reliance. Naturally one cannot predict the bottom. And my thesis was ~ these should be back to at least 80% of original levels in 2-3 years, once the situation normalized, and this would mean upside of 60-80%.
I was still a novice, but lacked insights on macro or when to sell. In a space of 3-4 months, such stocks jumped fast to my target and rising. Back then I did not think that all the free money being pumped in US is pumping up liquidity and capital market is the space to be. In a hurry to book the fast 40-60% gains I booked most of those at 40-60% gains. Of course the churning and rotation between stocks ensured the small capital was 2.5-3x in a space of 1.5 years, I did not know when to sell and how to do my own research. Large cap was the space I found comfort.
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One of examples of my biggest regret. Reliance I sold at 1200 with 40% gains. It went on to 2600. Olectra Greentech was 180 before March 2020. I bought at 60. When it hit 180, I sold it even when there were news or order books (now at ~1600-1800)
Phase 3: 2021-2022
That is when I started understanding macro, concepts like ROE, ROCE, and spending more time to understand business model of a company, tailwinds / headwinds, to be able to project what the future could look like. I had major experience in technology and IT Services space, hence I could understand more about it.
But one major flaw still existed. I relied on 'expert views' and tips for making investment calls. Naturally I was late into any cycle. Buying at close to peaks (or kind of temporary peak). Even when I took calls on overvalued chemical space or likes of Divislab or Pathlab (following likes of Sourabh Mukherjea - companies were good but valuations were not). The next 12 months was a phase of underperformance.
Phase 4: 2022-23
I started researching on multiple other space, understanding investments and ROCE,. Started adding on mid-cap and small cap space. Some were jewels. and others were likes of Varanium Cloud, EKI Services, and Brightcom Group - where numbers were too good to be true. Did not know the concept of operators then. Luckily I was able to exit these at minor loss or partial gains - spotting some red flags that did not sit with my conviction.
I was missing on a key parameter - study of management. This changed in September 2023 when I was exposed to the world of SME investing.
Phase 5: 2023 till date
In September 2023, I was lucky to be introduced to 3 seasoned investors by a mutual friend. And started my journey onto the SME space. I had plant visit notes from Sunita Tools - and had some idea on management guidance, and enough options to validate quarterly and half yearly if management was on the track. That was also when I was realizing HDFC bank, which was 10% of my holdings, facing case of over-ownership even if valuation was at historically low levels. I took a leap of faith to transfer my holdings from HDFC Bank to Sunita tools. Was probably the best decision.
Over the course of SME investing - this led to one more aspect - understanding of management and having conviction to invest big positions in a stock. Given in SME, management is probably the most important aspect. And there is not external research report to rely on - hence self-study and validation via network or publicly available info becomes the key. This I feel ahs been the start of something great.
As I kept finding more opportunities, I kept rotating cash from mutual funds and large caps to SME investing. I took the leap only when I was >50% sure, and that confidence came from knowledge of management and proven execution. Whenever there was new info that took confidence below 50%, I exited it completely.
From 0% in SME investing, to 100% of equity portfolio in SMEs by Mar'2024, this requires a leap of faith. From 60 stocks to 12 stocks, that is about conviction. Of course key is whenever we learn anything that disapproves of previous decision, act fast and take the call - not to be attached to any specific stock is the key.
My portfolio doubled from April Start till June start (i a Q). I booked half the gains. The other half have almost been wiped out int he fall from July till now (October). Which is why realized profit and partial profit booking is the key in SME space owing to high volatility.
As I am getting exposed to new info, validation of new facts, identification of new opportunities, rotation mode is on. and then there is a core portfolio where i have 2-3 years target - with certain checkmarks - if those get deviated, time to exit those.
Still figuring out - when to sell vs when to hold. What I know right now is if something changes fundamentally (negative direction) or if there is a more attractive opportunities, and after tax consideration, it makes sense to do the switch - I go for the switch.
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I have made 20-25% progress on my financial freedom target I intend to achieve over next 5-6 years.
That's the long summary
I intend to share my experiences and learning, and build a community where I share ideas and people share their counter arguments and counter-thesis and we learn from each other in the process.
#Milyin #Creation #investment #financialfreedon #investing #makingmoney #money #journey #stockmarket
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