Pre-Registrations Have Closed.
* There is no such school in real life 🙂
You might feel that if our prime motive is capital protection, then why are we entering stock markets? You are right. Stock markets are risky places where chances of losses increase in direct proportion to chances of achieving higher returns. There are n number of other safe investment instruments like bonds, PPF, NSC, Bank Deposits, Recurring Deposits, gold, etc. But we must be aware of their limitations too. Historically, these asset classes have failed to beat equities in the long run. So though we hate losing money and want to stick with rock solid and safe instruments, the fact remains that we cant ignore equities.
So, if you are in sync with what we just said OR if you consider yourself to be an average investor, incapable of giving a lot of time to stock analysis, it makes sense to only go for proven businesses in stock markets. These are companies which have been there and done that. They are businesses which are capable of weathering economic, political, sectoral storms. These are large businesses. These are large cap companies.
We always had an attraction for large cap stocks available at cheap prices. So when Morgan Stanley came out with a list of large Indian businesses with market cap greater than $10 Billion, we couldn’t help getting attracted towards it. 🙂
The guys at Morgan Stanley have taken these 23 ten billion dollar companies and ranked them on following parameters –
- Strong 5 year trailing ROE and earnings growth
- High forward change in ROE and earnings
- Depth & breadth of consensus earnings revision
We don’t know the exact details of the rating/ranking mechanism, so we can’t comment on the same. This list is a work of Morgan Stanley. You should not take this post as an endorsement by Stable Investor about these stocks or Morgan Stanley’s approach. Do have a look at this list. And if you do invest your money in any of these stocks, that would be at your own risk. 🙂
|India’s Top 23 Large Cap Stocks|
Disclosure: We do hold some of these stocks in our personal portfolios.
|Nifty Stocks: One Year Returns (Dec 2011 – Dec 2012)|
- Large Caps
- Dividend Stocks
- Mid Caps
- Growth Stocks
“Investors should reduce the frequency with which they check how well their investments are doing. Closely following daily fluctuations is a losing proposition, because the pain of the frequent small losses exceeds the pleasure of the equally frequent small gains. Once a quarter is enough, and may be more than enough for individual investors. In addition to improving the emotional quality of life, the deliberate avoidance of exposure to short-term outcomes improves the quality of both decisions and outcomes. The typical short-term reaction to bad news is increased loss aversion. Investors who get aggregated feedback receive such news much less often and are likely to be less risk averse and to end up richer. You are also less prone to useless churning of your portfolio if you don’t know how every stock in it is doing every day (or every week or even every month). A commitment not to change ones position for several periods improves financial performance.”
|Note – Stocks removed or added to Nifty 50 do not feature in the table|
- A few of these names, which are a part of an average investor’s portfolio like Tata Motors, HUL , ITC, Maruti, HDFC & ICICI have given close to 50% return in last 10 months!!
- But there have been others like Bharti, PNB & BHEL, which have given negative returns too.
If you haven’t read our earlier posts on this issue (which changed our hearts), we recommend you do so. It will give you an idea about how and why we zeroed upon this approach.
So without further delays, we present to you the details of our new portfolio in form of FAQs.
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This would form 50-60% of the portfolio.
This would form 20-25% of the portfolio.
This would form 15-20% of the portfolio.
This would form 10-15% of the portfolio.
This would form 0-5% of the portfolio.
When would you buy stocks for DMP?
Though it’s a tough task to time the markets, the fact remains that one should invest when there is over pessimism in market. In one of our earlier posts, we tried to decipher whyaverage investors like us should be concerned about entry price of stocks. Here also, we share a few guidelines to help us make buying decisions, a little quantitatively.
When would you sell stocks in DMP?
In the event of temporary downward movement in a stock’s price, would we be happy to buy more shares?
Is there just one Dead Monk’s Portfolio or multiple versions?
Do you maintain a buy list of stocks at all times?
How do I track Dead Monk’s Portfolio?
Do you have anything else to share?
What is this Dead Monk’s Disclaimer?
Did you like what you just read?