SKS/IDFC or SBI?
One important part of portfolio management is to have self confidence. What I mean is if you have a good company in your portfolio, do not think it is a bad share :). ‘Ghar ki murgi daal barabar’ becomes a reality even while you are handling a portfolio.
If say I have 1000 shares of SBI bought at say Rs. 140 …and now the share is worth Rs. 3000, I should rejoice. That I do. However whenever somebody comes to tell me IDFC is a good buy, because infrastructure funding is booming, I look at SBI, smile and go ahead with life without buying IDFC.
When somebody tells me SKS is a good buy because microfinance is booming, I look at 12000 branches of SBI, smile and go ahead in life without buying IDFC.
If Infrastructure is really so hot, or micro-finance is so hot, would SBI not be there in the business? Immaterial of what is the Net Interest Margin of SKS of IDFC may not be bad, but SBI can pump Rs. 10k crores into each business and not be worried! The scale is just too much!
Similarly when people tell me ‘xyz fertilizers’ is a good buy, Coromandel International looks back at me from my portfolio – and then I see I had bought it at an effective price of Rs. 7 (pre split, post split it would be Rs. 3.5) and pass xyz fertilizers.
Some times the best shares could already be there in your portfolio. If you have the best already, stop looking at every share and wondering..why it is not there in your portfolio. You may not need it.
Atul
hi
is the post incomplete
Venshu
No Atul the post is not incomplete. It is our interpretation of this post which makes us ask for more which actually makes us think that this post is incomplete!
Muthu
If SBI is enough for everything then why there is a successful HDFC? SBI can pump in thousands of crores for housing finance too. You are looking only at the size and forget something about core competency.
IDFC is next HDFC in making. The number of staff in IDFC is only around 600 and not running into tens of thousands or lakhs as SBI. But they know their business and are growing really well. Since you are a chartered accountant, take a look at the financials of IDFC for the last 5 years and look at the pace at which they are growing.
So many small regional banks are able to thrive in the rural pockets and are extremely profitable with good NIM and very less NPAs despite SBI’s strong presence in these areas.
Size alone doesn’t matter. You smile at IDFC and go ahead with life with SBI. A stock doesn’t care who owns it.
sukumaran
thank God your portfolio is managed by V’s team and not by somebody else..and you have the equanimity to know whom to listen to…ha ha ha…