On Hitpicks and the current investing scenario

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This post is from Dr Hitesh Patel, my partner in Hitpicks and in my own investing. We have been collaborating for many years and hopefully complement each other and I have learnt a lot from him over the years. He is the most prolific members on ValuePickr and his thread is the most-read thread on the forum, where he shares his thoughts and helps investors. 

Link to the ValuePickr thread.

Greetings to
all our friends and hope everyone is keeping good health in these trying
times. 

The market
rally which began in 2020 and which took everyone by surprise then has
continued to surprise us even now. Especially when we read the headlines in newspapers
and watch news on television, we feel a total disconnect between the ground
situation and the behaviour of stock markets.  
Even at a personal level this second wave has created havoc and has
directly or indirectly affected one and all. 

But as
investors the basic premise is not to argue with the tape.  The strength and resilience being displayed
by the markets is something that has taken most of us by surprise.   I think I would not like to go too much into
the details of why markets are not falling and in fact going up. 
Ever since
this rally began in 2020, we have seen that a lot of technical patterns that
were visible early during the rally have played out and these types of patterns
still continue to play out.  It indeed
has been a stock picker’s market.  Some
of the sectoral moves have been breathtaking and have created a lot of wealth
for those who have been able to ride them.

Ever since
we started HITPICKS, both Abhishek and I have been on a quick learning
curve.  Launching our services has helped
both of us in improving ourselves as technofunda investors.   From the beginning, our mantra has been to
land big winners and keep riding them while getting stopped out at the earliest
in our losers.   This has helped in riding
some of our winners well beyond our targets which we initially provided at the
time of the recommendation. 
As you must have
seen, we keep raising our stop losses in order to keep riding our winners as
they go higher and at the same time be stopped out if the trend reverses.  This has helped us in riding our winners as
much as we can with the help of trailing stop losses.

Even though
ours is a technofunda advisory, we prefer to pick companies where fundamentals
are very sound.   So any investor who has
missed implementing our stop losses and has been stuck with his/her position in
our recommended stocks does not suffer permanent loss of capital.

Another
strategy we follow is not to flood our subscribers with too many
recommendations in the hope of getting a few right while others may go wrong or
may not move much.   We understand the limitations
our subscribers face in terms of the availability of capital and hence do not want
to have too many open positions at the same time.  

Coming to
the current market scenario and what I feel about it, personally I have always
felt that it helps to focus more on companies and sectors rather than worry too
much about the markets and where they are headed.   This has always helped me in staying away
from futile exercises in forecasting market directions.  I prefer to look at companies and their
fundamentals and chart formations and structures. 
I don’t prefer writing long-winded letters
trying to figure out stuff like reasons for market rallies or falls, details of
macros etc.  Because in my investing
career, I have learnt that Peter Lynch got it absolutely right (as he has got
most things he wrote in his books right) when he quoted about focusing on
companies rather than market directions.
“Nobody can predict interest rates, the future direction of
the economy, or the stock market.  Dismiss all such forecasts and
concentrate on what’s actually happening to the companies in which you’ve
invested.”
The above quote has been the
cornerstone of my investment philosophy. 

We have tried to focus on selecting good
companies with good technical setups and this has worked well till now in a lot
of our recommendations.  Our effort will
continue to be to refine our processes so that we continue to churn out more
and more big winners and minimize our losers. 

If you have any suggestions to make regarding
our HITPICKS advisory, we would welcome them.

Wishing everyone healthier happier times, regards
to one and all.

 

HITPICKS SUMMARY DATA

Num of gaining positions

15

Num of losing positions

8

Max loss

-15.21%

Max gain

80.27%

Average loss

-8.97%

Average gain

25.40%

Min duration
held

7

Max duration
held

200

Average duration
held

71

XIRR %

87.30%

Also Read on FinMedium:  The Momentum mindset | Value Investor India



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Abhishek Basumallick

Abhishek Basumallick

Abhishek Basumallick is the Head of the equity advisory www.intelsense.in for long term wealth creation.
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