I made like 90% gains and total returns which were highest in the last one year in small cap was approximately 114. But many people will see like a portfolio correction of 30% but others might only see a portfolio correction of 5-4%. Why? Because they might be holding this. Hi everyone, welcome to today's video. So on today's video, I'm going to help you understand five types of stocks that I'm currently holding in my portfolio.
Rather, I would focus my portfolio on these type of five stocks. Last time I had done such a video, it was regarding mutual funds. And I made that video openly like approximately two years back.
And my returns on mutual fund portfolio had been exceptionally good. I mean, this has beaten more than 95% of actively managed mutual funds. And a lot of people benefited from that commentary. So I thought that, okay, this portfolio building videos or these types of portfolio building videos are extremely important, extremely critical for wealth generation. So I'll try to give you a little bit of commentary on that.
So without wasting any time, let me just quickly jump into the topic. And the first type of stock that I'm holding in my portfolio are 5x type of stocks. Now, what are 5x type of stocks? So, for example, if you invest in a stock at 100 rupees and you clearly see it can go to like 500 rupees in the next three to five years.
Now, these are 5x type of stocks. Now, of course, like I mean, 5x is a multi-bagger return, one could argue. And this is what we hope.
But a more practical understanding would be that when we are targeting these multi-bagger type of stocks, we are targeting returns somewhere around 2x to 5x. So this is the more practical approach of understanding these 5x type of stocks. Now, why did I bring up the small cap 250 index story?
Because this is an asset that I had purchased roughly one and a half years back. And if I have to just quickly show you the performance of this asset from from April 3rd, right? And you can see this is like my trade book where I have exited this position. I made like 90% gains and total returns which were highest in the last one year in small cap was approximately 114. Now I am not saying this to boast or anything.
I am just simply telling you that see boss if I actually hold this asset, I purchased this asset somewhere here, right? At point X and if I continue to hold this asset at point Y, can it? And let's assume that my value went from, let's say, 100 rupees to roughly 200 rupees here. Right.
It's 100% enough. Now, can it go to like 400 rupees very soon or in the next one to two years? I don't know.
The risk seems fairly high for a wide variety of reasons. Now, this is not the only area that you need to study this entire rectangle. You need to analyze and backtest the entire history of this.
Right. So let me just quickly do that in one minute. And then I will actually explain some of these stocks that I'm bullish on from a 2x to 5x perspective.
So just helping you decode this history. Basically what has happened is that see, this was the run up phase, this entire rectangle. But there was also a phase of stagnation. So for example, this was the entire stagnation phase, that from 2021 to 2023 there was 0% run up.
So yes, in the year 2023 to 2024, 100% run up. But basically, from 2021 to approximately 3-3.5 years, this 100% run up has been achieved. So the important point I'm trying to make is that even when you're trying to pick 2x to 5x type of multibagger type of stocks, they have to go through a consolidation period, right?
And then you should be able to catch a breakout, right? So this is literally like a very basic point on these multibagger stocks. If you're not doing both these things, then the chances are that you're either buying the stock really expensive. And yeah, that's just not going to become like a 3x, 5x stock anytime soon.
So if I have to talk about one or two such 2x to 5x type of stocks, I will just quickly discuss it. Please don't take it as a recommendation. I would advocate against taking these as recommendations.
I'm just simply sharing very quick frameworks with you. Now, if you check PVR Inox, for example, you will see that, hey, the stock has hardly given any run up in the last four years. So almost the same price.
In fact, from 2019, it is available at the same price. And if you look at the numbers, right. So take a look at the overall results of PVR Inox in the last five years. What has been the performance?
So this was 3000 and now the revenues have doubled. What about profits? So profits have shrunk. Profits are negative, but you need to see the trend, right. Ki haan se massively negative tha and now dhere dhere karke it is turning towards positive.
This is very similar to Zomato type of story that we picked. will be 3x 4x water. Now something similar can happen on PVR Inox.
Now see guys, basically the counter argument that comes is negative company. Why should we buy it? All that stuff. Very valid concerns and it might happen that you might not make money, lose money on it.
That's always a chance in terms of investing. I'm just sharing my perspective on this. But here what you need to notice is that see 2020 2021 phase, this entire phase was very, very bad for what type of businesses. This was the Covid phase and theater me jaake anjaan log ke saath movie dekhna is probably the worst thing that you could have done during Covid.
And as a result, the stock price necessarily corrected. On top of that, what happened? The OTT game came into the picture. OTT aagaya hai, brilliant movies getting released. What not?
Yeah, it just literally killed the movie going market. But the very fact that company is now making 6000 crore of sales, they will be able to figure out profitability. So that is the understanding with which I'm investing. And if the stock goes back to its previous levels, previous profit margins of 189 crores and all that stuff.
How much do you think the stock will run up by? Well, it will at least 4X, 5X. So therefore it fits this mold. Now I don't want to jump into giving more stock recommendations and all that. So this is not the intent of the video.
In fact, I teach things fundamentally in case you guys are interested how to build a portfolio, how to learn stock investing from scratch. Time is a big loss because all of us go to office and all that. So I have a four day workshop in case you guys are interested. This is done over the weekends only. So I'm organizing this in Bangalore.
It's an online plus offline type of an event. It will be wrapped up in four very intense learning days. And the feedback had been excellent.
You can go check it yourself and you will really enjoy the event. More importantly, this is an in person networking event. So you'll meet a lot of like minded people. Grow your community. We'll start a Bangalore chapter for Wisdom Hatch.
So you will get to meet a lot of like minded people and grow your wealth not only through learning new things, but also from collaboration interaction. So definitely do check out the event. The seats get filled very, very fast.
We'll not be able to extend the seats. So anyways, coming back to topic, the point number one is that I'm looking for these type of 4X, 5X stocks. Then comes second category of stocks I own.
These are literally 2X type of stocks. Now, these are not very, very complicated to find. Honestly, anyone can find out these 2X type of stocks.
All you need to do is that you need to understand the concept of sector rotation. So this is like a sample that I have drawn just for illustration. This is not exactly how it plays out, but it will at least teach you the concept of sector rotation. See, as you would have seen yourself, during the time of Covid, this was like 2020-2021 phase. And in this phase, IT stocks did really, really well.
There was a lot of growth there. Then what happened, recently you must have seen that consumer durables gave a very good run up. What happened after IT?
Let me backtrack the story. What happens after IT? Real estate, Infra oriented companies, PSU companies, they did very well and here definitely doubled. For example, here I picked Punjab National Bank, Canara Bank, PNB doubled, there also exited. Small finance bank like Ujjivan small finance bank, booked a lot of profit on this.
Equita small finance bank, booked a lot of profit on this. Here Meta had a lot of profit. Here 150-200% returns we made.
Then recently in last 7-8 months, we have made a lot of consumer durables as a voltas and whirlpool were two of my picks they have given very good run up right voltas double again right so 2x again that became now what has happened right what you have to do in this right it's very simple that just pick something where sector rotation might happen right so where it can happen very simple way that it can happen private banks right why because again the numbers are exceptionally good now like recently the loan which is on giving i will make a separate video on that but in lending is getting eased out A few days ago, lending was getting regulated like crazy. Now, in a few days, you will see that they will make lending very easy. Who will benefit?
NBFC and private banks. So something like Bajaj Finance, which is a very simple company. Something like HDFC Bank, something like Kotech.
Here at least these people will handle Nifty. This is what is going to happen. My estimate is that the market will tank.
But these particular sections will be okay. and they will be handling your Nifty. Of course, you will see Nifty moving down by 10%. But many people will see like a portfolio correction of 30%.
But others might only see a portfolio correction of 5-4%. Right. Why?
Because they might be holding this and this is what is saving their portfolio. So in a way, these are somewhat like 2x type of stocks as of now, according to my analysis. And of course, like if you check the revenue numbers, profit numbers for these private banks also, you will categorically see Revenues have doubled, profits have also doubled or tripled in some cases.
But stock price hasn't moved. Time correction is over in this. Now of course, we can suppress it for a little while but that story cannot go forever.
It makes sense right now to have some position sale. Now the third type of stock that I own in my portfolio are called as swing stocks. Now what are swing stocks?
I have written a post here. This is from my member community and here I had spoken about Tata Elxsi and this was done like four or five days ago and today when I'm shooting this video the stock is up 12% and yesterday it went up by three or four percent so 17% return in four days. It has happened and trust me I'm not moving the stock.
Now why was that the case? Well the reason was that a very big PMS fund manager from India, one of the most famous guys, he sold Tata Elxsi and I wrote on the on my community post that hey I'll be buying it. For example if you take a look right there is no problem with the business right the profits have been constantly increasing the EPS has been constantly growing I could not understand the logic why some famous person will sell Tata Alexi now especially when if you look at its last three year PE it has been consolidating in a range right so here it was consolidating now either it will go up or it will go down it was likely to go up if the company performance is better and you know IT may and Tech services may paisa aane lag jaye.
Abhi aayega kyun? Kyunki makros tell us that if interest rates are getting cut, then IT companies or asset light companies are going to benefit a lot. And that is precisely what happened.
This was like free money sitting on the table. I was surprised that a big fund manager missed this. But anyways, this is not the objective.
I'm simply trying to tell you that there are many opportunities. Right. These are opportunistic stocks. Ke isme pata nahi hai ki kitane manenge.
Right. I mean, will it be like 2x or 3x and all that? It's very hard to predict.
But hey, we can definitely say that this is undervalued. And it will give you a 15% CAGR return. And literally in what like four days, five days, this has given like roughly 20% run up. I said wrong, today itself it has gone up by 15%.
Now the next segment or the next set of stocks that I own in my portfolio and will be owning more are called as SME IPO stocks or unlisted stocks. Now, are these high risk? Yes. Right.
This is high risk. And I'm not encouraging that all of you should be owning this. But here if you do like VC type of investing, VC type of investing, let's assume that your portfolio is hypothetically one crore and you put like 10 to 15 percent in these type of companies. Right. And how many?
Right. At least you own in this 10, 15 lakhs, at least 30 companies, 30 firms. Right.
Now, in a way, some of them will go on to become like 10X stocks. Right. And they exist. I'll show you the list here.
And they exist. I have experienced it personally. Some of them will die, right?
15 will die, right? 15 will go to absolute zero. And some 5-7 stocks will give you average return.
So overall, your return will be very good, right? So this is the type of investing that I am doing and this is called a sentiment investing. I have done a video here.
Please go and check it. I have explained the entire concept of sentiment-based investing. It will give you a better idea, better perspective on how sentiment investing is done. I have started to appreciate this more.
It's not as if fundamental investors win, sentimental investors also win or lose. So it makes sense to study this space properly and what is going on in the market, we have to respect it. The market has its own mind.
It's not as if just because I am saying that this is right, the market makes it right. No, so we have to respect whatever is going on in the market. Fortunately or unfortunately, our markets are driven by sentiments. This is an angle that we have to pick up.
So over time, I will put like roughly 20% portfolio. into these type of stocks. That's my vision. And I will disclose everything on my member community to my core students, etc. In case you want to understand how to do this sensibly, again, that four day workshop is going to be very useful for you.
Now, the last type of assets I hold on my portfolio are called as hedges. Right now, just like call put options, I do a few options from a hedging perspective, but it will be a little complicated, so I'll not get there. But having some kind of international exposure, like US equity, right?
So this is very important. International bonds, right? So this is something that I own.
International real estate. Now all these. Now you will say that this is a useless thing.
Why is this? So I will give you a small example. For example, the FD rates in the Middle East is somewhere around like 5%.
Right. So 5% FD rates. What is after tax FD rate in Middle East? Right. Okay.
5% because our tax is zero. Now what is the appreciation of Dirham compared to INR? Well, it is at least 5% a year.
So what is the total return that you are making? You are making at least 10% return just from bond investing that in one of the safest things that you can do, which is FDs. Now, these type of options, not everyone can execute, but there are certain options. For example, you can have international exposure to US equities. Now, US equities, maybe whenever you put money again, this thing is there that, you know, dollar appreciation compared to INR because INR keeps on getting weakened for a wide variety of reasons.
So that loss is prevented and therefore having these type of hedges is very critical. If you are a slightly high ticket investor. Now when I say high ticket, it would mean that if you have liquid wealth of more than 30 lakh plus 30, 35 lakhs then you should start thinking about these type of hedges. Also, a bunch of people will be correct who will be commenting. Akshat, you know what?
What's the point of buying like US stocks or considering like international real estate or international bonds, this that stuff. portfolio sizes like 10 lakhs. No, it doesn't make sense. Right? First, grow your portfolio to 30 lakhs plus.
Then start thinking about all these options. So anyways, I hope that this gave you an understanding of how I design my portfolio roughly and it's broadly designed. A lot of macroeconomics goes into designing whatever portfolio structure I have.
I teach all these things again on my courses. So in case you guys are interested, you can definitely join. If you're a high ticket investor, definitely I will 100% recommend you to join.
If you have a portfolio size of less than 10 lakhs, First, grow it sensibly by investing in high growth assets and subsequently you can learn more about hedging them. I hope that this video was useful, insightful. If you enjoyed it, do press the like button and I'll see you soon.