Building Portfolio 2023

Are you ready for next Bull market cycle?

Dear Investors,

Are you ready for next Bull market cycle? We anticipate next bull cycle will resume by end of 2023/24. Every bear market is followed by a bull market and individual investor must prepare their portfolio for it. It has been noticed based on historic market data, that first two years of bull cycle investors made huge profits.

We will be investing in high quality growth stocks. Our aim would be to build this portfolio with at least 20-30 companies. By year end we trim the portfolio down to under 20 companies based on our winners and hold them for at least 3-5 years or longer.

We carefully choose companies based on following criteria:

Led by founders and revolutionizing lives by disrupting technology.
First into the market and leaders in their domain with heavy moat.
Growing at scale and have at least $10 billion market cap*
Growing basic earnings per share, profit margin, revenue and sales quarter after quarter and year over year.

Rules to follow:

  1. Book 20% of profits, when you feel very good about your portfolio. It's the sign that you achieved what you planned and it's time to raise some cash.
  2. Keep adding money to your brokerage account monthly, but only the money that you don't plan to use in 1-2 years. Dollar cost averaging is the best long term strategy.
  3. Never take loan or use margin money for long term investing. If you use margin then be smart about it and book profits or cut losses early.
  4. Remember that market always come back, so would your gains.
  5. Correction happens it's a sign of healthy market.
  6. 30% of market corrections are rare and happens only once or twice in a decade. Generally 5%-10% correction happens twice a year
  7. Holding on to strong, great and visionary companies is the key to long term investing.
  8. Never panic sell, apply 3-day rule. That means wait for at-least 3 days before selling your long term holdings.
  9. Sometime best strategy would be just to not look at your brokerage account for a while. Let it fix itself, because you have confidence in the stocks you invested in.
  10. Perform year-end re-balancing, feed your winners and get rid of companies that has stopped executing.

Portfolio 2023 Composition:

  1. Core stocks (80%) - Core stocks are the building blocks of this portfolio, these are the stocks we have highest conviction. In this category we will own high growth tech companies and large cap stocks. These companies have proven business models and growing at scale. And must be at least $25B of market cap.
  2. Explore stocks (20%) - These companies can be under $25B, they could be can be micro, small or mid cap. Such companies are trying to grow at scale and still establishing their businesses, but currently undervalued. These are the companies with highest risk associated with them, but usually it's this category we find our multi-baggers, if we hold the stock for long term.

Note: We focus on high growth stocks, Growth investing is substantially risky but highly rewarding We also hold dividend paying stocks in our portfolio

-Alpha Staff

Subscribe to Alpha Investor

Don’t miss out on the latest issues. Sign up now to get access to the library of members-only issues.