Diwali 2024 Portfolio

Happy Diwali, Investors!

This is the 5th version of my Diwali portfolio, which I started publishing in 2020. A couple of things have happened over the years, when I had a look at the past 4 versions –

• Concentrated portfolios give better outcomes

• Chasing quality over seasonal themes/trends

• It has become increasingly difficult to find undervalued-ness

• Realised that Risk and Uncertainty are two different things
  
  The result of last year`s portfolio (Diwali 2023)–
  one-year return of 18% Vs 22% of Nifty, underperformed Nifty by 4%.

While Goldiam and Max India gave good outcomes, Repro and RBA were bought at higher valuations, clearly tanked and brought the overall portfolio down. Had they not been included or bought at better valuations, the portfolio would probably have given a stellar return of 60-70%.
Learning – buying at Fair or Reasonable valuations is a must, whatever is the Business!

For IDFC and Gateway Distripark, the core businesses are intact and growing, but the market has not rewarded them with better returns. Learning: Chase Value/ Thesis and no returns!

Both the REITs have done pretty well, were not expecting price appreciation but a 6-7% Div Yield. They gave the Dividends plus the 17% and 27% price appreciation- true Value Investments!

One thing is for sure, none of the ideas from the 2023 portfolio are to be dropped and we can continue to hold them for another year for sure.

Moving to Diwali 2024, this year`s theme is Special Situations – as I could not find any Growth Story at Reasonable Valuations, so I decided to go for hidden gems where some optionality can be played. Simply put, where there is a possibility of Value Unlocking through stake sale by owners.
e.g. – In 2023-24, I got lucky with Nuvama getting spun off from Edelweiss and made a 2.5X from the listing and a solid 7000X !! (considering 14 shares were gifted against 1 share of Edelweiss)

I expect similar stories to happen again in Edelweiss, Sundaram Finance Holdings and Zuari Industries.
Samhi Hotels, although I started buying at 200 levels, two months before Shankar Nath`s post on it, it has become even more attractive below 190 now, and one more acquisition.
Indian Oil, has been included from a safe side 10% Div yield plus better margins perspective (looking at the the India- Russia cheaper Crude angle) – should give an easy 2X, or a steady 10% Dividend or both.

In summary, if all the cylinders fire at the same time, at a portfolio level we should get a 2.5X and worst case a 20-25% return, very essential in turbulent times like the last few months and a bleak 2025 ahead. Big rider – if we enter Bear Market then nothing is guaranteed, including this or other portfolios. Essential for the new & post-Covid, market enthusiast like some of you 😛

Have a Safe, Healthy and Prosperous Year ahead !!

P.S. – for people who like Safe Havens, try Silver this time and not Gold 🙂



DISCLAIMER: I AM NOT A SEBI REGISTERED ADVISOR OR A FINANCIAL ADVISER.
ALL THE VIEWS ARE FOR EDUCATIONAL PURPOSES. I MAY OR MAY HAVE INVESTED IN THESE STOCKS. PLEASE DO YOUR DUE DILIGENCE YOURSELF.