Our stock portfolio had given flat returns while stock market 2.74% in April 2017

It feels very bad when your portfolio does not performs equal or outperform the market returns. But then when you realise that almost 60% of your portfolio is still intact in cash, suddenly you start feeling better thinking maybe this is not that bad result and you can turn the table anytime with your remaining cash in your portfolio. Comparing stock market returns daily, weekly or even monthly against market returns does not make sense if you are investing for the long term.

Ground Rules

The most important thing to be successful in the stock investing is the process of your selection of stocks and at what price you are buying that stock. If you are not buying the right stocks or paying higher price for them, in both the scenarios you will get poor returns. What do we mean by quality stocks? It is completely different subject and we will cover that in the separate blog post this week.

We have designed a process that we will follow and apart of that we will follow these two ground rules this financial year. Let me share the ground rules with you:

  • There are two important goals for our investments. First, avoid capital impairment and second to achieve better returns than the market returns.
  • We will rebalance, add or sell any positions on quarterly basis if required.

2017 – 18 portfolio


3rd April 2017 30th April 2017 Performance
Stock Buy price holding cost 28th April Dividend received Current value + Income return
Indiabulls Housing Finance Rs 998 253 Rs 252,494 Rs 1016.95 0 Rs 257,288.35 1.90%
Hind Zinc Rs 291.10 338 Rs 98,391.80 Rs 267.95 0 Rs 90567.10 -7.95%
ONGC Rs 185.20 750 Rs 138,900 Rs 186.55 0 Rs 139,912.50 0.73%
NIFTY 500 7995.05 8214.30 2.74%
Cash Rs 772,964
Total Rs 1,262,749.80 Rs 1,260,731.95 -0.16%


Indiabulls Housing Finance

You might have heard from almost every analyst and brokerage house to invest in the NBFC (Non – Banking Financial companies). The reason is simple. Indians are migrating from their rural areas to the metro cities at its fastest pace. They will need houses to live in, and now days it is very hard to buy house without mortgage.

In this whole cycle where so many different sectors are involved, financing business looks very lucrative. If you can manage to raise big chunk of cash and deploy them at higher rates and then sell them in the market to raise more cash or ease the balance sheet, you exactly know how much money you can make by deploying that little of your capital.

On top of this there is incentives from the government through less taxes if you buy mortgage.

Indiabulls Housing Finance was a star stock last year in our portfolio and we hope it will this year too.

Hindustan Zinc

We do not like to invest in the metal stocks. I have explained my rationale in detail in other post.

If you buy the story that the supply – demand of zinc metal is in favour of its metal price. Which means that zinc prices will climb up this financial year too because of lack of supply compare to its demand. Then this stock looks little cheap and has a room to go up another 20% – 25%.

But then those hefty dividends that we are getting from Hind Zinc will not allow its stock price to climb. If they will continue to pay out those kind of hefty dividends then this stock is trading at very expensive premiums.

We have allocated little capital towards Hind Zinc and will like to see how it performs for another two quarters.


Similar to metal, we do not like oil companies too. The profitability of these companies is entirely based on the performance of underlying commodities market price.

So what do you think will happen to oil price in 2017?

The bull side analysts are expecting oil prices to climb 20% this financial year. The bear side analysts are expecting oil prices to climb only 5%. If we factor in both the scenarios then its stock price is today trading closer to the bear side analysts’ earnings expectations. So there is a room for its stock price to climb up if bulls’ side story turns real.

We have allocated a small capital on this stocks growth story and we will soon find how it unfolds later this year.

We do not have any more intention to allocate our capital to metal and oil companies.

Also a quick reminder that this entire exercise is for the educational purpose and should be not considered as personal advice.