Analyse India Big Value 3.0

What do you get in Big Value 3.0 ?

  • 25-50 investment ideas in a year.
  • 1-4 investment ideas in a month.
  • Focus will be on companies with decent fundamentals and good potential.
  • There will be a few trading bets due to market opportunities based on technicals.
  • A  bit of technical analysis for better timing or catching the trend early or in momentum for picking up good companies at good prices.
  • The normal allocation to one stock would be 2% to start with. So ideally we should have 50 stocks. But in many cases we will allocate more to some stock with max limit of 10-12% to one stock and around will generally be diversifed to a minimum of 20-25 stocks or more.
  • The accumulation of stocks would be done over the next 1 year so one will be investing systematically and increasing allocation to equity in steps.
  • We would be focusing on companies which have good management record, decent dividends or growth so that the drawdown in case of a bad market trend is not huge. Also money would be deployed over a period of 1 year volatility would reduce.
  • In the long run a diversified stock portfolio can beat the benchmark index returns by a big margin. For example in a study we did for a random portfolio of stocks, outperformed the Nifty/Midcap Index returns over a 10 year period. This period had two rounds of bull/bear cycle. But going into good companies can reduce capital loss in the interim.  ( So our returns could also be totally random but we try to make lot of efforts to outperform at lower risks. Do read this post )
  • We do not focus on catching multibaggers or 10 baggers but it is about finding good risk-reward entries in quality stocks. Pleasant surprises are welcome.
  • There are no promised / expected /possible returns or possible loss / expected loss etc but the target is 20-30% annual returns along with beating the benchmarks by a good margin and to control risks more importantly.
  • The motive of this product is to make investors increase their exposure to equities gradually and we will put the full allocation over the next 6-12 months ( starting November 15 th ). The service period is roughly 12-18 months. ( Updates will follow for Big Value 2.0 picks for another 6 months.)
  • We will generally have an update every few weeks and a portfolio review once in 3-6 months.
  • Apart from the stock recommendations and updates on the same every quarter we do send Technical View on the Markets on important times ( like say 7600 ) and other additional research.

What you will not get in Big Value 3.0 ?

  • Short Term Trading Calls
  • Derivatives/Nifty etc.

How much do we charge and how do clients need to go about it?

  • The charges are Rs 24000  ( For 1 year ) .
  • We will continue to research honestly and recommend to the best of our ability and we do not claim or promise super normal returns.
  • This is meant for long term investors who have a horizon of 1-3 years and do not get scared by a 20-40% drop in a good company. ( yes that has happened many a times in our stocks and can happen in the future too )
  • Even traders can deploy some part of their capital into this portfolio with a long term view to build a corpus.
  • Money is to be allocated over a period of 6-12 months so investors will need to be patient and expect conservative returns. Let me repeat this is not for short term trading ideas.
  • As a disclosure we would be investing personally and for clients also into the recommended companies.
  • The communication medium would be via e-mail. Going ahead we would also be creating Members Area on the website/app for Big Value members.

How long is it open for subscription ?

Unlike our other services which are open for subscription this one will be open only till November 30th 2015 or when the limit we have set for no of people is reached.

We had launched Big Value 2.0 in May 2014.

What has been the Past Performance ?

There was a time we used to put performance of our services as well as give trials. But over time we realized there is no point to the fact as past performance is no guarantee of the future but it builds a lot of expectations which may or may not come true. Given our process of being opportunitic and patient a trial also did not make sense as we do not have recommendations every day or every particular week.

The performance of Big Value 1.0 and Big Value 2.0 has been around the lines what we wanted to be but does that confirm it would be for Big Value 3.0. We could turn out to be terrible too or outperform crazily that god only knows. So please understand the risks involved. Equity Portfolios can drop 20-30% easily even in long term uptrends and have fallen 50-60% in times of bear markets. Although we believe currently we are at interesting times where there will be many opportunities in the future.

What we believe is.

Past Performance is not a guarantee of the future but definitely is a great source of learning.

So before we talk about the Big Value 2.0 you can have a look at previous posts on the same - ( Big value 1 pf , Big Value 2.0 learnings and launch )

By gods grace the peformance of Big Value 2.0 has been decent and yet again a lot of learnings to improve in the future.

Some of the important learnings and mistakes. ( Do note a mistake is only learnt in hindsight )

  • Book profits/profits in cases where stocks are turnarounds and the prices take it to expensive valuations. ( HCL Infosys )
  • When facts change I change my mind. In a lot of cases changing sector scenario needs to accepted and book a loss faster. ( Mah Seamless )
  • Do not be ultra defensive. We tend to keep some part of our portfolio in stocks with low downside risks but at the same time limited upsides in the near term ( Godrej Inds, Tata Global, IDFC ) . It tough to understand whether this is the right strategy but keeps the drawdowns of the portfolio lower.
  • One big learning has been to use Technical view on the Broader Markets to get interesting opportunities. We could add some good returns by buying into sharp downfalls in the index and coz of that in some midcaps. ( Recent example being Lloyd Electric , Garware Wall Ropes gave good entry points )
  • Turnarounds can take longer then you expect and much more later for market perception to change on a company. ( We have some companies which do not really seem to be turning around - West Coast Papers , Engineers India )
  • Concentrate more on top ideas. This has been a tough choice given our low risk approach as well as clients may not have same conviction. ( Example Hexaware, KPR Mills and textile sector bet we did not concentrate enough ) . Going ahead in Big Value 3.0 we would try to be more concentrated or rather say - Less diversified.

Another big learning has been the amount of opportunity misses in quality stocks at high multiples or big jump ups in turnaround cos or new technologies. Still believe a lot of so called quality stocks may underperform the expectations.

Big Value 2.0

The returns for Big Value 2.0 as of October 23rd 2015 is

36.8% Cagr

34.5% Absolute

( it would be a couple of % points higher if adjusting for IDFC Bank ) . This is not a return which we promise or what is possible but just what has happened in Big Value 2.0. As again past performance is no guarantee of future but we can guarantee about working honestly and putting efforts best to our ability 🙂

I would suggest you to go through the portfolio in detail and do the math.

We have taken a size of 10 lakhs to be deployed and so 2% allocation would be 20k into one investment idea.

We have not included dividends neither have we included brokerage. ( even though dividends would be way higher this is just of ease of calculation )

For example

buy Hexaware normal allocation at 200.

( this implies one has to buy 2% of portfolio size or 20k or in the above case 100 shares )

1) Unrealized and Realized Gain

2) Transactions Big Value

3) Mprofit Back up File

You can do further detailed analysis of the Big Value 2.0 by loading the backup file on which has a nice free software for less than 50 lakhs portfolio. Would recommend the software otherwise too ( Do note am not being paid for saying so )

For any queries - Call Ankit 09899899989


1 Comment

  1. Nitin
    December 13, 2015

    I want to subscribe. Please suggest how.


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