Goodbye Allahabad Bank

Well, I was not feeling comfortable holding more than 17% of my portfolio in BFSI stocks, especially after they ran up 25% in last 45 days. Finally, I decided to reduce BFSI to below 10%, and exited ALBK completely, while reduce 33% of PNB holding. Due to bad investments in ALBK in the past, I stand at an all time loss of 3.5% in this stock, but yes, since the last purchase, I've had over 12% profit. Goodbye, when you again get dumped to drain, I'll pick you again...

In PNB also, since I was invested upto my limit of 11% per stocks in portfolio (BHEL is an exception...), and I sense it has also run up beyond my calculated IV, too fast in last 45 days, its prudent to reduce some exposure. Now my total BFSI exposure is 8.2% and only stock being PNB, which I still believe, my current average cost is around 710 (after a net loss to date of about 15% of my current holding.

Since I reduced about 14% invested amount by these actions, I also reallocated some money, and completed purchase in BHARTIARTL to 11%. Yes, I bought it a little expensive, but given the fact that it's making a very strong base around 260 levels, and my conservative IV calculation only gives a 10% lower price, I'm comfortable in buying a good business with healthy prospects at a slightly higher price than my IV. This is a classic example where my conviction in business future prospect is stronger than my confidence in correctness of IV calculation.

Additionally, now that I've 9 stocks, I also have room to add a new stock, and out of my watchlist, MAZDA is one business which I like. There has been some good discussion on SN forum, and its been few weeks that we've waited to assimilate the discussion, and my gut feel says - go ahead. Strong business fundamental, undervalued by a conservative IV calculation method, healthy record of cash flow generation, decent dividend yield, and no debt. Just the right kind of company you'd want to buy in. Yes, Ideally I'd like to buy below Rs 87, but again, giving benefit of doubt in IV calculation, since its only about 12% higher, and started buying in small amounts. As it falls, I've surplus cash from sale of banking stocks to gradually build up exposure in MAZDA. Thanks Sanjeev Ji for analyzing this good stock.

Finally, here's my new portfolio allocation, by stocks:

And this is by sector. Yes, my exposure in Capital goods sector is above 30%, primarily due to good run up in BHEL and the fact that BHEL alone stands at 17% in my portfolio. But I strongly believe in the business prospects, and in long term, both BHEL and CROMPGREAV will deliver - they're healthy businesses, run by able management, and there's a huge potential for both these companies to grow further given the large power infrastructure need in India. Yes, there's competition, but these are good brands which enjoy reputation of quality products, and eventually, quality wins in such mammoth investment spaces.