STATIC PORTFOLIO CONSTRUCTION

STATIC PORTFOLIO CONSTRUCTION -:

We offer static and passive investment portfolio construction strategy wherein we follow buy and hold strategy and go in sleeping mode for 75% of our core holdings. The rest 25% are either cash call and some stock ideas to catch the new trends, new stocks and new sectors which become flavor in different time periods. Our investment approach is very simple, in a world full of complex data. We filter stocks on the below filters and believe that we don’t need many ideas to make money. We need to bet on a few great ideas and bet big on those ideas to make money. We always look to find the next Bajaj Finance, next HDFC Bank, and we don’t claim to have spotted these stocks in very early phases but we spotted them wherein our investments have yielded 5x-10x returns in these stocks as heavy investments in early stages can be deceptive as high growth companies die down many times causing a huge dent in overall portfolio.

  1. Select companies with a large market size /opportunity with growth in the sector itself above the nominal GDP growth.
  2. Finding companies which are gaining market share from competitors, global peers due to global factors, domestically due to shifting in unorganized to organized and others
  3. Ethical and dynamic management which has done well across market cycles who take care of minority shareholders
  4. Companies which can generate returns above their weighted avg. cost of capital for the longer period of time by keeping competition away.
  5. Good Operating margins, High ROE, Good Operating Cash Flow Generations, Short Working Capital cycle, Low Leverage so that companies don’t dilute for future growth and don’t take external debt and become cash generating machines.
  6. Identifying true market leaders who can perform consistently across market cycles with a strong brand name, good distributions network, superior access to technology. A true winner doesn’t look for the only P&L side but focuses more on the balance sheet strength and cash flows.
  7. Timings in stock markets are of utmost importance as we don’t want to overpay for growth as we have a mantra “Growth at a reasonable price.”
  8. Last but not the last, good earnings profile with accelerating sales growth and earnings growth consistently and growth visibility for next 8-12 quarters.