Market Star - Financial Success For You

Portfolio

We understand that different investors have different investment needs and timeframes. Therefore, we maintain a few model portofolios. To generate returns, we move between holding stocks/ETFs (Exchange Traded Funds) and holding cash -- based on our analysis of market direction.

Each portfolio is based on careful selection of a few constituent companies that we can hold for long-term investment and also buy/sell at periodic intervals. Our goal is to keep each portfolio simple and easy to manage, and therefore, each portfolio can have a maximum of 10 constituents, made possible by the use of ETFs (Exchange Traded Funds). We prefer to have about 5 constituents in most cases.

We currently have the following portfolios for subscription:

1. MarketStar India Investment Portfolio

This is our most comprehensive portfolio that covers the entire Indian industry with a combination of ETFs and a few select stocks, which together provide investment into the top 100 Indian companies by market cap, and covers all major industries, with special emphasis on achieving attractive valuation for the portofolio, by aiming for P/E of 10 (based on 12 month forward earning estimate), which creates a good upside room for price appreciation when valuations of frontline companies become expensive and investors seek quality companies with lower P/E multiples. This is a relatively low risk portfolio because it covers the entire market, and it is best suited for all investors wanting to invest in India.

2. MarketStar India Energy Portfolio

The 8-10% GDP growth of India being projected for the next 5 years will need a lot of energy to make it possible. Our energy portfolio comprises select companies that will play a key role in making India's growth happen. By energy, we mean Oil & Gas, Coal, Power Generation/Transmission/Distribution, Renewable Energy, and Power systems. By subscribing to this portfolio, you can build ownership to the most essential input behind India's GDP growth in the coming years. This sector has to deliver if India has to move forward. In that sense, this sector promises strong earnings with lower risks. The portfolio includes high growth energy stocks outside the Index. If you can invest with a 4 to 5 year timeframe, we believe that the MarketStar India Energy Portfolio will outperform the market Index by a big margin.

3. MarketStar India Real Estate Portfolio

The Indian Real Estate industry contributes to between 5-10% of the GDP directly and indirectly, and is therefore a vital part of the Indian economy. Due to the economic downturn of 2008-2009, many Indian real estate companies have excess inventory with them, and some have properties acquired at much higher prices than today's market prices. However, the real estate prices are improving across the country and we expect 2010-2011 to consume a sizeable part of the current inventory, and thereby paving the way for good demand-supply competition in 2011-2012, which will be positive for the sector. By 2013, commericial real estate demand is also likely to reach new highs, adding further upside to real estate sector earnings. Therefore, today in H1 2010, the stocks of many Indian real estate companies are available at attractive prices and real estate investors with 4 to 5 year timeframe can benefit by subscribing to this portfolio. The portfolio includes profitable real estate stocks outside the Index.If you can invest with 4 to 5 year timeframe, we believe that the MarketStar India Real Estate Portfolio will outperform the market Index by a big margin.

4. MarketStar Asia Powerhouse Portfolio

This portfolio gives investment exposure to top companies in both India, Hong Kong and China (through Hang Seng Index of Hong Kong). The Hang Seng Index comprises some major growth companies operating in the far-east in the areas of Energy, Technology and Real Estate. Many companies of the Hang Seng Index are expanding in mainland China and therefore, this portfolio gives you investment plus diversification into two of the most attractive investment destinations at a global level. This portfolio has an extra weight on (a) Indian Banking industry and (b) high-demand commodities in Asia-Pacific region like iron ore, coking coal, steel -- both of which we believe will see major growth in both earnings and market cap in the next 5 years, and this extra weight should help the portfolio perform better than the market.

Following are sample trading charts of two stocks from our model portfolio.

Performance Summary:

In the first case, 52% return was made possible over a 5 month period, while the underlying stock price increased by only 3.5%. In this case, a buy-and-hold strategy would not have delivered much returns, but trading has delivered good returns.
In the second case, 273% return was made possible over a 10 month period, while the underlying stock price increased by 147%. In this case, a buy-and-hold strategy would have delivered good returns, but trading has amplified the returns.

Key points to note from the above charts:

By actively tracking the market and moving between stock and cash, it is possible to generate better return than a buy-and-hold strategy. In addition, we trade with has pre-defined exit points on both upside and downside, based on both technical and fundamental factors, which helps in avoiding extreme losses that can occur by holding on stock like in the year 2008.
Trading is not frequent, otherwise the long-term picture is lost, and brokerage costs can rapidly eat into the earnings. We have tried different frequencies of trading and the above charts include our learning on that aspect as well. We have no vested interest in making you trade often.

Please note the returns in the above charts are just sample trades and any specific returns are neither implied nor promised in any way from our Investment Advisory services.

If you are interested in benefiting from our work, there are two options:

(1) Subscribe to any of the above portfolios, and receive weekly updates on what we plan to do with our portfolios (Hold or Buy or Sell and the price levels), which can help you take take suitable action at your end. You will receive our portfolio update email every weekend. Click Here To Subscribe.

(2) Become a shareholder in MarketStar - this option is currently limited to Indian nationals having India based bank accounts. We plan to make our shareholding available to investors worldwide in a couple of years. Click Here To Learn More.

If you have any questions, you are welcome to contact us. Thanks.