We have skin in the game. We only recommend what we invest in ourselves.
We give end-to-end guidance: What to buy, how much to buy (percentage of overall portfolio allocation), when to sell
Regular monitoring of investments, but infrequent action
Error reduction through process-oriented structured approach
Do NOT try to time the market
Emphasis on overall portfolio and not only on individual stocks
We DO NOT have any get-rich-quick scheme. We DO NOT have any multibagger scheme. We have a slow, steady and boring equity investing scheme!!
We believe wealth is generated by participating in the growth of a business. Identifying such businesses that can generate above-average returns is what we do.
The greatest wealth creation is possible when one invests in a business which can compound its earnings at high rates for a very long period without the need for too much additional capital. We invest with a long-term horizon. Long-term investment does not mean we invest and then forget about it. Investing is like planting a tree. Just as after planting the seeds, regular care in terms of watering and weeding is required for the best results, similarly, after investing constant monitoring is needed to increase or decrease allocation and to decide to sell when the need arises.
Psychology plays an important role in investing. Two people having identified the same stock at the same time can have a vastly different outcomes due their personal psychology (fear and greed). Our endeavour is to always protect the investor from himself. We give huge importance to behavioral biases in investing. To reduce our psychological biases, we follow detailed checklists to judge a business before investing in a stock. The checklist contains such factors as quantitative, qualitative, valuation, promoter behaviour and reasons for past mistakes.
There will be times when the markets will go through exuberance or depression. To be rational during such times of extreme emotional turmoil is what eventually results in good long term returns.
We try to keep things simple while investing and not try to go for complicated businesses, which we do not understand. In this we follow Warren Buffett when he said, “Never invest in a business you cannot understand.”
Good investing is supposed to be boring. That is why we try to buy and hold for extended periods when the underlying business economics is favourable. To us, if we can find a few excellent opportunities a year, it is sufficient to create significant wealth. We do not try to time the market. We have never been successful at it and don't really know of anyone who has been able to time the market consistently. We would much rather be invested in good businesses than try to jump from one trade to another.
Portfolio construction is an art and we believe an optimum portfolio should have between 10-20 stocks. We explain our portfolio construction method and where each stock recommendation fits into the portfolio to our members. We have no biases of market capitalization or industry. We simply buy what we understand and like and avoid what we don't understand.
Research-based Recommendations: All the stocks are backed by in-depth and actionable research. We do detailed study of the industry, business before recommending it to you.
Portfolio Construction: Our emphasis is not only on finding new investible ideas. We give equal thought on where it fits into our overall portfolio. We have an eye out for individual stock weights and sectoral weights in the overall portfolio. Our approach of core and tactical stocks help in marrying diversification with opportunism.
Risk Management: We focus on limiting our losses. When we are wrong or when fundamentals turn against us, we readily admit we are wrong and we reverse our course. We do not seek new theories that will justify our original decision. We do not let errors fester and consume our attention. We sell and move on.
Long Term Focus: We believe in long-term compounding and design our portfolio to mirror our views.
Multicap universe. Greater than 96% of listed market cap.
Select upto 30 strong stocks for every period.
Stocks in very strong trends continue to be in portfolio & reach maximum allocation of ~10% at cost.
Relatively weaker stocks have small allocation and exit quickly.
System designed to get less or no stocks at all in severe bear markets. Capital moves to liquid fund.
Number of stocks expected to be between 15 to 25 at any given time. Adequate diversification to protect from severe crashes in specific stocks.
Backtest returns >30% over a decade including bear markets.
Over a rolling 3 to 5 year period system edge to outperform Nifty 500 by +10% or more.
The focus in Hitpicks is on identifying short-to-medium term trends in stocks using Technofunda concepts.
The core is technical analysis with an overlay of fundamentals where we look only at fundamentally strong companies for technical chart patterns and breakouts. Transactions will be frequent. This is basically meant for those who have a short-to-medium term time horizon. It requires a hands-on approach to the market.
All communication will be on email only. There will be no whatsapp / telegram/ sms communication. All emails will be sent after market hours. Only in exceptional circumstances communication may be sent during market hours.
It is a long-only strategy. All the ideas recommended would be BUY recommendations but if and when we spot an opportunity of a breakdown/reversal in any stock we would bring it to your notice only as a possibility and not as a recommendation.
The companies recommended will be companies with decent fundamentals and high liquidity.
The time frame for the given trade will be clearly mentioned along with the recommendation. e.g short term means few days to few weeks, medium-term means few weeks to few months and long term for a few months to more than that.
Ideal allocation to Technofunda trading in the overall portfolio should not exceed 30-40% of total portfolio value. One can gradually begin with smaller sums and get enough confidence to bet higher amounts gradually.
We would endeavour to recommend stocks as and when we come across good trade setups and because of that there will be no fixed frequency of recommendations.
A minimum of 12 recommendations would be provided but the number is likely to be exceeded provided markets remain good.
We would clearly mention the course of action which includes buy/accumulate in a price range, stop loss and targets in each recommendation. Whenever targets are achieved or sometimes slightly before that happens, it would be advisable to book atleast partial if not full profits.
Along with technical set up, a brief write up about the fundamentals and possible triggers would be provided with the recommendation.
The recommendations are for delivery based trading on the given time frames, but if someone wants to buy in futures or options, he/she can do so at his/her own risk.
Investors/traders do not need to trade each and every recommendation made. They can pick and choose according to their comfort levels based on conviction and time frame mindset.
One of the biggest challenges when you start investing is where to start. There are 2500+ mutual fund schemes, hundreds of exchange-traded funds (ETFs) and over 5000 stocks. There are categories - largecap, midcap, smallcap, flexicap, multicap … you get the drift. If you want to add other asset classes, the buffet expands - gold, silver, foreign equities and bonds. The options are just way too many.
Act as the starting point and bedrock of creating a robust portfolio
Have exposure across asset classes and countries to have broad diversification
Keep things simple
Here is where we come in. We have created a simple all-in-one basket that gives you exposure to the following:
Equity - Indian and Global
Commodities - Gold, Silver
Debt - Bonds, Liquid
Sectoral funds
Multicap
Multistrategy (Momentum, Alpha, Value etc.)
There will be no direct stocks. All investments will be through ETFs (exchange-traded funds only).
We will revisit the portfolio monthly, but we expect changes to be quarterly or half-yearly.
Diversification within equities
Multiple asset classes
Investing in foreign assets
Great mechanism to start an initial SIP portfolio.
As with all equity-oriented portfolios, this also carries the risk of uncertain returns and losses.
At times, ETFs may be illiquid and buying and selling may not be possible in large volumes.
Not all asset classes are available as ETFs. Only those with fairly liquid ETFs will be part of our universe of investment.
Although the portfolio is widely diversified, increasingly asset classes are behaving in a much more correlated manner, that is, they go up and down in sync. This can result in drawdowns and losses when markets go down.
In trending bull markets, a diversified portfolio will underperform equities.
A diversified portfolio will underperform its best constituent asset class. For example, if gold has done the best in the last 1 year, the overall portfolio will do worse than gold.
We diversify across multiple ETFs. The weights of ETFs are determined by our quantitative process based on overall market conditions.
Email us at equity@intelsense.in
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