Sunday, September 18, 2011

MAKING OF FUNDAMENTAL PORTFOLIO

Respected reader,
As you knew every third Sunday of month I choose a fundamental strong stock which trade at very low valuation due to bad conditions of company and particular sector.
Rules of this portfolio making is
1. Invest only 4500 in a single stock.
2. Minimum holding at least 1 year because after one year profits are tax free.
3. Buy only one stock at a month.
4. Do not be average out if stock fall after buying just hold because our loss is only notional loss at paper only. Because we already buy stock at lower price where it may be test our patience but all companies all belong to BSE group A with strong fundamentals. (Shri atul ji ask me that can we average out MTNL REL COM VIDEOCON etc so my answer is NO, just buy new entry of this month)
4. After one year we can free to sell a stock but never sell in loss read shopkeeper approach in this link for deep understanding this point
and you knew discipline is always win in stock market, I think you remember my last 6 month buying is MTNL, REL COM, DB REALTY, VIDEOCON,INDIA BULLS REAL EASTATE, HDIL each of these stocks run 5-15 % after my buying but as per rules I do not book profit because 1 year is not complete.

  
Our past investment has a net notional loss of 4628.90 as per details below (read this detail carefully to understand my concept)


STOCK
PRICEQUANTITYINVESTMENT
MTNL41.81094556.2
RELIANCE COMUNICATIONS107.4424510.8
DB REALTY81.85564583.6
VIDEOCON INDUSTRIES177.2264607.2
INDIA BULLS REAL EASTE120.3384571.4
HDIL100454500
TOTAL INVESTMENT27329.2




STOCK
PRICEQUANTITYMARKET VALUE
MTNL34.81093793.2
RELIANCE COMUNICATIONS81.9423439.8
DB REALTY57.85563239.6
VIDEOCON INDUSTRIES175.3264557.8
INDIA BULLS REAL EASTE83.5383173
HDIL109.1454909.5
TODAY MARKET VALUE23112.9


OUR TOTAL NOTIONAL LOSS IS 4216.30

THIS MONTH TOP UNDER VALUED STOCKS OF GROUP A

Company NameLast Price% ChgBook ValuePBV RatioYear
Reliance Comm81.9-3.02244.660.33Mar '10
DB Realty57.85-2.36137.820.42Mar '11
HDIL109.14.8225.970.48Mar '11
Piramal Health348.15-5.15699.630.5Mar '11
Indiabulls Real83.452.27159.20.52Mar '10
IFCI34.9-1.4164.240.54Mar '11
Videocon Indust175.3-1.02310.890.56Dec '10
Shipping Corp86.651.23136.050.64Mar '10
GE Shipping251.92.65361.420.7Mar '11
IndiaBPower14.7-0.0719.380.76Mar '10

So this month PIRAMAL HEALTH CARE @ 348 is a new entry for buying and as my formula I buy 13 stock of PIRAMAL HEALTH CARE .
·       Please do not be greedy and buy a huge quantity and then blame me.
·       This article is not an buying advice ask your financial adviser before follow my concepts.

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