Teji Mandi's investment strategy melds tactical bets with long-term winners. Combined with disciplined rebalancing we ensure adequate risk management with return maximization.
- Industry Consolidation
A competitive advantage is seen for a larger established entity in a specific sector
Example: In the banking sector, large private sector banks will gain significant market share on account of conservative underwriting, aggressive provisioning and strong liability franchise
- Government Policy
A change in government policy could create an opportunity for certain companies and sectors to innovate or expand.
Example: A government ban on electronic products from China would benefit companies in the Indian electronics sector
- Industry Tailwinds
External conditions could be favourable to specific stocks/sectors driving supernormal growth
Example: Due to above-average rainfall last year, the rabi crop was strong this year. Good crop production has led to tractor, fertilizer and agro-chem companies performing well.
- Proven Track Record
Companies with a proven growth track record of profits over the last 1, 3 and 5 years
- Strong Growth Triggers Ahead
A meaningful growth runway should be visible for the companies going forward
- Prudent Capital Allocation
In most cases, companies must display operating ROEs upwards of 15%. Even incremental ROEs should be north of this
- Beaten Down Stocks
Due to certain near term concerns, some high-quality stocks get beaten down disproportionately.Risk/reward ratio in such companies is usually an attractive proposition over the long-term.
We will also sell when the initial hypothesis, with which we bought a stock, has run its due course
- Investment thesis is no longer valid due to
Entry of a large competitor into the sector
The company's capital allocation policy has changed
The company has entered into an unrelated industry
The company has had a major management overhaul
- Substantially better risk/reward opportunity in Companies or Sectors with better growth prospects
Companies with better capital allocation policies
An alternate sector that is seeing significant tailwinds
- Too much noise
There are situations where a specific industry/company is in a negative light
When there is a concern in terms of earnings or a corporate governance issue
There is a change in management or the current competitive scenario.
- Liquidity Management
We hold a percentage of the portfolio in Cash or Liquid ETFs in extreme situations
When the market is overheated (High Volatility)
There is a negative global event/externality beyond our control (Pandemic / Political Events)
What do you think? Do you have any questions regarding our portfolio strategy? Email me at [email protected] with your feedback and questions.