How many stocks should you buy?

hi everyone welcome to today's video so on today's video I'm going to reveal the answer as to how many stocks do I own so I was just checking my portfolio and I own 64 different stocks 64 now many of you would jump to the conclusion and would say thatat you own like too many stocks 64 is just a big number please watch the video till the very end I will help you understand all the various points with example I I will share the names of a few stocks along the way how am I trading and investing in those stocks listen to this video super important super critical I will also help you understand the investing strategy of Mr Warren Buffett how he has gone about building his portfolio and why he has something called as a concentrated portfolio so we will talk about that we will also talk about Mr ralo's portfolio his portfolio is Diversified portfolio so we will try to understand this different macro perspective of how investors go about developing and Design in their own portfolios using these principles you can develop your own portfolio too super important video please watch it till the very end this is a very very very very important video it will teach you a lot about stock market investing before we jump in very quick few disclaimers number one there are a lot of scammers and spammers on the comment section I've tried blocking them they use Bots impossible for me to do it so please be aware unless I'm speaking something on the video or in my description box please don't go go and believe all those things that's one second many of you ask me that hey aat your insurance video was really good can you please tell us where we can get more information about insurance how to buy health insurance life insurance there is a company called is ditto I have put the link in the description box it is run by my friend pan they give information for free so please go speak with them the link is in the description box you can easily schedule a call and it's completely free super easy for you to understand that I myself buy insurance from them third many of you have asked me that he you created your small case the consumer durable small case has been doing fabulous you want to invest in it how to do it link is in the description box please take a look you can see the returns that these different small cases have been generating so with that said let's get started with the video so first key point that you must understand from this video is the difference between a concentrated portfolio and a diversified portfolio or an over Diversified portfolio so to say now let us understand this point by delving into the portfolio of two major investors or two really big investors both are billionaires so let us first look at Mr Warren Buffett's portfolio right so here is the Warren Buffett's portfolio he runs a company or a hedge fund called as Burkshire hatway and if you take a look at Mr Warren Buffett's portfolio you will see that he owns Apple which is 41% right 41% of his entire billion multi-billion dollars portfolio 41% of it is made up of apple right then you have Bank of America for 14% you have American Express 88.5% Coca-Cola is approximately 7 and a half% so he holds really big position right if you combine these top five stocks it will make up like what it will make up almost a 65% portfolio which is huge right so this is a highly concentrated portfolio Okay this is a super super concentrated portfolio why because he's not owning too many stocks but he is owning few stocks but the proportion of those stocks is very high right so this is called as concentrated style of investing and it has both its risk and rewards which is fairly obvious right for example in Mr Warren Buffett's case if if the Apple stock goes up his entire portfolio will go up massively right if the Apple stock goes down his stock portfolio will come down again massively now this is a high risk High reward type of a game what does that mean for you as a retail investor should you go like super specific should you also go and invest like 41% of your entire money in apple the short answer is no right now why is that why am I saying that you should not be so deeply concentrated right no matter what type of a retail investor you are you should never invest % of your entire money in one single stock please do not do that why why am I saying it it's not as if that Mr Warren Buffet is incorrect here but you need to understand one very important key Point here that Mr Warren Buffet has access to a lot of privileged information if he wants to know more about Apple he can call up Tim Cook he can understand things from him directly you and I even if we own Apple products and if we go to the service station for Apple to get our laptops repaired it will take us a lot of time to even get that stuff done now many of you will jump you will say that hey you what insider trading no no this is not called as insiders trading this is just access to information who is stopping Mr Warren Bu from calling up Tim Cook asking him some probing questions and getting more information out of him he can do that we can't do that right so when these big investors take these type of positions 41% 14% 10% is fine but if when you see like 41% 14 15 20% these numbers are just too high and you should be very very sure that whichever company you have invested in they will give you relevant information and and and they will give you timely information okay this is a very important point I'm not trying to criticize the investing style of Mr Warren Buffett I am I to do it he's a genius right but all I'm simply trying to tell you is very basic common sense that as retail investors I'm talking about retail investors here as retail investors we do not have this type of luxury so please don't blindly emulate Mr Warren Buffett strategy it can be disastrous for you so this style of portfolio design is called as concentrated portfolio design now many investors will tell you that hey you should have concentrated portfolio many will say Diversified portfolio so let us understand what Diversified portfolio are by looking at whose portfolio Mr ralo's portfolio so let us go there and let us see what type of positions he has taken now here is ralo's portfolio and you will see so he has 5.42% holding in what in S&P 500 which is what which is an index it is a type of a mutual fund so to say this is not a single stock there also he has only 5.42% of his holding now if you take a look at individual stocks then Walmart less than 5% less than 5% Proctor and Gamble 4% almost Johnson and Johnson 2.9% Coca-Cola 2.86% so if you go down you will see that hey this person takes like very very small small bets in multiple stocks so this type of portfolio design is called as what it is called as Diversified portfolio style of investing now very important again that it is not as if that Mr R alio is in correct and it is also not that Mr Warren Buffett is incorrect both have their own Styles both have been making insane amount of money in the stock market and they would continue to make insane amount of money in the stock market despite following two very different styles of portfolio design now you would say a that he great discussion but how is it relevant for us we are not billionaires like Mr Warren Buffet and we are not billionaires like Mr R alio we don't care right so tell us a strategy that applies to us so let me share my strategy but before I do that would request you to hit the like button it helps with the YouTube algorithm helps my video get to more people and make them financially educated so please hit the like button do it now okay so now let me get into my portfolio so let me note down some important points my portfolio Okay now how many stocks do I own so I own 64 stocks right so I'm a concentrated or a diversified type of an investor I am a more Diversified type of an investor Diversified type of an investor and I'm also like a macro investor right so I study the macroeconomics and I make make investments from that angle that is the most important angle for me that's one second point I invest for growth right these are some key terms that you need to understand I'll explain it more I do both trading and long-term investing right these are some key points that I was noting down so that I can explain you the rational and logic and definitions of all these things okay so here are important words Diversified I want to build a portfolio which is well Diversified I understand that I do not have the type of privileged information that Mr Warren Buffett has right so it is just Madness for me to invest 40% 30% capital in one single stock I've said it again that I never invest more than 5% usually more than 5% and very rarely I'll go up to like 10% that is the max that I would ever do no matter how strongly do I believe in one single stock so this is the number one rule that I follow number two rule I invest in all types of companies for example I will invest in small cap companies also I'll invest in mid Gap companies also I will invest in large gap companies also right this is the number two thing number three thing that you need to understand about me is that I'm a slightly risky investor right it means that my portfolio allocation will be there in small case and midgap more compared to large capap stock now this is something that I would not advise to you especially when you're starting out in the stock market when I started out in the stock market I used to have more positions in the large gap over time especially given the economic scenario now I have moved more to toward small cap and midcap stocks because that is where major growth would happen why am I doing it because I'm a slightly risky investor right you don't need to do this you have to design and figure out your own portfolio style and strategy please take this discussion from an education point of view not from an investment advice point of view now the final point is that I do both long-term investing so long-term investing means that my time Horizon will be like 10 years on that stock I'm okay not selling it off whatever happens happens with that stock and then I do swing trading also so let me explain these points by giving you relevant examp example very recent examples I have made separate videos on all these topics and if you're a regular viewer you would agree with that okay so let me explain that I hold certain stocks from a long-term perspective so what are these stocks that I'm holding from a long-term perspective so these will be really fundamentally strong stocks for example this would be something like HDFC bank now whenever I see HDFC Bank trading around its 200 day moving average line I will go and buy it even if it is slightly up than that I will buy it I recently took huge positions in HDFC Bank there is an entire video explained on that so when am I looking to sell this off I don't think I'll sell it right so I honestly do not want to sell it I'm trying to aggregate more of HDFC bank at every dip right so when they say that hey buy the dip it means that buy fundamentally strong shares which you are trying to hold from a long-term perspective on dips this is my strategy so whenever HDFC Bank Falls I will buy a little bit more of it then whenever it falls if I have more money I'll buy more of it up to what point it will never go more than 10% of my portfolio ever it will usually stay at around 5% now the same goes for HDFC group right why I have again made a separate video on HDFC group please go and watch it I consider it to becoming one of India's major monopolies so to say especially in finance and ftech space so I'm taking a good 10-year period Horizon on HDFC group from that perspective now unless something major happens I'm not going to sell these stocks right so this according to me is long-term investing that keep buying fundamentally sound stocks on dips now what happens with this long-term strategy is that sometimes you have to be patient right for example I'll give you the example of ITC right ITC now I am a holder in that stock I bought that stock from a long-term perspective again I'm still sitting on profit on ITC it is not a type of a stock that is giving massive returns it is hardly giving any major returns as of now but I'm hopeful that it will give more returns as we go along meanwhile I'll enjoy what I will enjoy dividends right so ITC gives out a lot of dividends I'm enjoying it they give like 6 to 7% dividends anyways so I'm okay parking my money in ITC so this is another stable stock that I will buy right so the bottom line is that when I'm doing long-term investing I'm investing in stable good growth companies that can become monopolies or are monopolies in a certain space now some long-term Investments I make from an opportunistic perspective right opportunistic perspective now this is somewhere between like my swing trade and a long-term trade right so I'm not categorizing it I'll give you an example so back in August if you check my videos you will see that I made a video on bti AEL right I said I analyzed all the fundamentals I told you that hey this is a good stock I'm betting on it I have invested money on it and this was back in August when it was trading somewhere around here like 615 620 levels now it has reached almost 690 levels so I'm already sitting on this profit and it has recently started giving breakout right so is bharti AEL a long-term stock for me I don't know because I don't trust bti AEL to the extent that as HDFC bank or HDFC group so that is something that I'm completely bullish on I'm completely comfortable holding that but bhi AEL I have to wait and monitor now why did I buy it right because when I bought it back in August it was trading at good price all the indicators were pointing out again you can watch the video here all the financials all the business sense was telling us that hey this is likely to give a breakout so I held it had it gone down I would have been okay with it because I was sure that hey bharti AEL will be one of the top two telecom companies and it will definitely go up in price from at 620 630 levels so that is the reason why I was a long-term invester from bti AEL but is it like buy and forget no right with HDFC bank I can do buy and forget but with bti AEL I can't do it I have to monitor its debt I have to see how the Telecom Market is shaping up so this level of analysis has to be done so I hope you got my perspective on long-term investing now let me talk about slightly more exciting stuff which is Swing trading now swing trading basically means that I'm buying a stock with a very clear Target price in mind right for example let me again explain you an example that I gave a call on Hindustan un somewhere around like 2400 levels right 2350 2400 levels a couple of weeks back now it was trading at 23 2400 levels and why did I give that call because all the large cap stocks were moving a few weeks back and the fmcg industry was not moving so I thought that you know what okay let me buy h stock in bulk in bulk I will buy it and then when the prices go up to around 20 600 I will sell it off so then exactly that happened that prices went up to 2600 I sold my position on H and made like 8 9% return I'm sure that all of you would agree with that because I gave that call on the channel also after that what happened it had continued to go up and it is at 2,800 level now you'll say that aat you know what you sold it at like 2600 you did not make the maximum amount of money so see guys no one can predict till what point the stock price will go up or down no one can predict that hey buy it here and you know sell it here right that is the highest point no one can do it no one absolutely no one can do it but what we can do as retail investor is that we can look at the momentum in the stock take a swing trade on it have very clear Target in mind do the rational analysis and make like good money in a very short span of time for example if in 2 weeks if I made 8 10% return on a stock like H which is a fundamentally strong stock what is wrong with that there is absolutely nothing right there is no end to to Greed this could have been like 20% I don't care but I made good returns I put this money fair and that was it so I'm very happy taking these type of Swing trades so I hope you understood the fundamental of swing trade that I had a very clear Target in mind I picked up H and sold it off now you would say a that okay hey you know what okay this sounds really amazing but you already made like a swing trade on H so what other swing trade you can identify in the market right now okay glad you asked and this is where we can have a discussion so another swing trade that I can identify is the kch Mahindra bank now this is a very big bank it has a very big weit in the Nifty Bank index now if you actually take a look at the CK Bank you will see a few key trends so let me do a very quick stock analysis the stock is trading at 1,800 the highest level it has reached is approximately 2,000 level so there is good 10% gain to be made here right now let us look at financials can it actually pan out right if you actually take a look at the revenues the revenues have been going up the net income has increased all good good things are happening in this stock now it is just that the banking stocks are underperforming at the moment so if I want I will take a swing trade on it and guess what I've taken a swing trade on it I have bought kotch Mahindra bank and it is likely to go up again please do it with your own analysis please do not take it as an investment advice this is the swing trade that I'm taking now so we are sitting on 12th September and that is when I'm making this video so the point is that I feel that there are always these great swing trade opportunities in Blue Chip stocks right H was a blue chip stock CCH Mahindra bank is a blue chip stock so even if it happens that I'm wrong right for some reason I'm wrong and next 6 8 10 months the CCH Mahindra Banks come down to, 1600 1500 levels can you not hold it you can hold it right there is absolutely no problem because you know that hey kch Mahindra bank is really good again assuming that there is not something fundamentally berserk that goes into kotch Mahindra bank so the bottom line I'm trying to tell you is that whenever I take these swing trades I do it with safe companies I do not do these swing trading with weird companies I do not do that at all so even you should not do that now I also take swing trades depending on the nature of the stock itself for example let us talk about our favorite Bank type out the name so it is SBI now take a look at the history of SBI right you will see that it trades literally in a range right so if I paint this range it goes something like this that hey if the stock price hits here buy it if it hits here or here just literally sell it that is what you need to keep on doing keep on doing keep on doing there is so much consistent variation in a stock like SBI therefore it is a trading stock for me it is not an investing stock so I hope you understood the fundamental difference between how I invest in stocks right long-term investing and how I trade or swing trade in stocks right swing trade I have very specific targets there are only certain number of companies in which I do it baj Finance was one for which I was doing it last year this year I did it with HL and a few other stocks and I'm now doing it with CCH bank so this is what swing trading is right so whenever I'm holding so whenever I'm saying that hey I own like 64 stocks some stocks are for swing trade some stocks are for long-term trade so I hope this fundamental difference is clear now let me talk about the third and final part of my portfolio which is investing in growth stocks right and how do I choose how to invest in growth stocks so if I'm investing in growth stocks then what I do is that I pick like small cap or midcap companies right not large cap companies these are growth stocks these are very opportunistic buy and sell right so these are stocks for example I gave you the example that I hold a big position in equitas holding right I'd been aggregating this stock for a while right I have bought and sold this stock multiple times right now how do I do it so essentially what I would do is now if I have identified that hey you know what this stock is really good it has decent fundamentals right this is the first step that I would take that hey equitas is holding decent fundamentals I will study this stock further right how do I study this there is an entire video that I have made on equitas holding you can check it here you can understand how I done the analysis for equitas holding so without wasting time there what I would say is that first step is that I'll research the stock second step is that I will start taking small positions right for example if I have to go and invest in like let's say 10 lakh right what I would do is that I will divide this money into four parts right now I would sort of do an averaging on it upward or downward right it doesn't matter if I'm going to invest 10 lakhs stock price can go up or down if nothing fundamental changes in that time period I'm going to invest this but in four parts now you would say a why don't you go and invest all the money in one go because of the fact that I'm trading with small midcap companies it is very important for me to spread out that investment if I'm investing 10 lakhs I'll spread it over a window of 3 to 6 months I will do it in that way reach a big position for example if I have reached a position of 10 lakhs in equitas holding then what I would do is that I will keep monitoring right I will monitor it for let's say another 3 4 months I will look at the performance I might sell some of the stock if it has spiked now why do I do this this is an important step for me especially in midcap and small capap because it gives me courage to hold the stock right if I have made enough money from equitas holding guess what I will always feel that I have not lost money on this so let me hold it for a little while what I'm trying to do in small capap and midcap stock is and this is an investment style you might agree disagree that's your own prerogative I'm not saying follow this only but my style is very simple that what I try to do is that I try to build a cushion right with small cap and midcap stocks because small cap and midcap stocks have massive volatility they can fall and rise like crazy right someday they are up by 10% some day they are down by like 6 7 8% so it is very important for me to make a little bit of money swing trading it for a little while so that if I made that money it gives me the strength to hold fundamentally good stocks for example I feel that equitas holding is a good fundamental stock I will pick it up I will take a few swing trades make a little bit of money that acts as a cushion that in case something goes wrong with equitas bank I have at least secured my position this is how I trade in small cap and midcap stocks this is the way I designed my portfolio just to recap number one I have some stocks for longterm example HDFC bank I would not sell it very rarely I would sell it this is longterm like at least 10 15 20 years down the line I will see what to do with it then swing trade very clear Target in mind that hey h will move from 2400 to 26 sell it off at 26 make money move on to the next swing trade finally I'm investing for growth where small cap large cap here initially I swing trade and then I hold right so this is the strategy that I'm following and therefore I have 64 stocks in my portfolio now you might say a that you know what I have like 1 lakh rupe to invest or 10 lakh rupe to invest so what advice would you have for me as a investor now this is a very complicated question for anyone to answer but I will try to give you some general rules that have helped me now please build your own strategy towards it number one please understand your portfolio size how much money you want to invest over the next 5 six years please keep a track of that very important you need to have an understanding of the capital that you want to invest if you only have 50,000 of capital there is honestly no point in investing more than five six stocks right so at least keep like 10,000 per stock as your budget this is the first general rule that I can give you number two please understand what type of an investor you are if you are a risk averse investor if you want to invest in safe stocks then please go and play Only In fixed deposits gold if you say that okay you know what no not that save just little bit more risky suggest something suggest something so I'll say that okay invest in large cap stocks very important bottom line is that you need to understand and Define your risk right I am an investor who is investing for 15 20% return a year this is what I'm trying to do now please don't say that hey you know what Mr morren Buffet does not make like 15 20% return every year how can you make it please don't get into all those type of arguments I'll explain it on another video how retail investors can do it and have been doing not only me a bunch of other retail investors have been doing that for the last several years if you don't trust me go and check my consumer durables no one was mentioning that and it is up by like 17 18% already link is in the description box please go and check it out number three please do not invest more than 10% of your Capital ever ever on one single stock unless you have some really prominent information from somewhere right so please don't do it as retail investors we work with very limited information we do not have access to very quality information so to say we do reasonable assumption based on the information we have so we are not Mr Warren Buffett we can't invest like him if you are a goldfish don't try to invest like a Shar please do not do it be Diversified this is the third point that I would say fourth and finally what I would say is that please stay invested across different Industries also if for example if you say that he I'm buying AMC stocks then identify two three top players in it and invest in the top two three stocks there if you're investing for growth then invest in growth industries plus growth stocks so what are growth industries so you have identified that okay EV sector might be a growth industry AMC sector might be a growth industry banking sector might be a growth industry so if you're putting money in these industries what are you doing you're inv investing for growth if you are investing for growth in stocks what are you doing you have to go mid Gap and small Gap that is where major growth will happen so I hope you are able to parse together or piece together all these different points I hope you found this discussion to be insightful and clear let me know if you have any questions in the comment box I would love to reply to those again please do not fall for scams there are a lot of spammers please do not believe it unless you see it on my pinned comment which is right at the top do not believe that information or you see it in the description and if it is very important I will mention it in the video itself so I hope you enjoyed the video and I will see you the next time [Music]

Channel: Akshat Shrivastava

Views: 537,756

Keywords: akshat shrivastava, cases over coffee, Warren Buffet, Berkshire Hathway, Ray Dalio, Bridgewater Associates, Stock Market investing, concentrated portfolio, diversified portfolio, Bharti Airtel, ITC, Kotak Mahindra, HDC Bank, HDFC Group, Stocks to invest in, Investing for beginners, How to invest in stock market, Make money in stock market, Stock market fundamental principle, fundamental analysis

Id: iptbESNg_mc

Length: 24min 43sec (1483 seconds)

Published: Mon Sep 13 2021