Monthly Portfolio Update April 1st 2015

Our key objective is to pick the right stocks at the right time by paying a fair price to
build a balanced portfolio which will enable us to outperform the markets and achieve
superior risk adjusted returns. We aspire to generate wealth by compounding money at a
healthy rate by spotting profit making opportunities in solid companies with strong
management which are available at a good discount to their intrinsic value.

s (TMP) An Innovative Offline PMS

Portfolio companies of TMP

TMP Performance = 371 % Vs Sensex Performance = 70 %

equity exposure = 98.5% Cash Exposure = 1.5 %

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[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

Dear Members of "The Millionaire Portfolio (TMP)",
Indian Markets have had a healthy correction over the month of March. While the headline Index is down about
7%, the broader markets have corrected sharply. The bigger correction has been in the tier-2 cyclical stocks that had run up
largely on the back of unrealistic expectations. These corrections are healthy as it removes the froth and market participants
take a reality check on their expectations. Since our Portfolio didnt have any low quality businesses, there hasnt been any
impact on the overall returns.
The Macro economic data that has been coming out over the last many weeks has been pointing to a similar trend
that Indian economy and new CAPEX cycle is not going to pick up meaningfully over the next 2-3 quarters. Multiple factors
such as clamp down on subsidy spending, Unseasonal rainfalls, lower MSP price increases etc has created stress in the
economy. We believe that these are healthy adjustments for the improving the economic growth trend of the country over
the medium to long term. In case, Markets continue to correct we will be happy to buy good businesses at decent prices.
Short term market movements are based on sentiment, Medium term movements are based on Liquidity and
Long term movements are based on earnings. The businesses that we have in our Portfolio have considerable earnings power
and will be able to grow profitably with the improvement in the countrys GDP growth. We will continue to stay invested in
such businesses as long as our Investment thesis holds true. At the same time, we are cognizant of the risks involved in
staying fully invested in an overheated market and hence may build some cash at the appropriate time.
One of the good things that is happening to our portfolio is that the Stocks that are looking overvalued to us are
prudently raising equity at extremely low cost of capital. This reflexive phenomenon would ensure that these stocks
continue to be healthy investments for us. Our portfolio bets such as HSIL, Cera Sanitary ware, Dewan Housing Finance,

[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

Treehouse Education etc have all raised equity capital over the last 1-2 months at attractive prices. We hope that these
businesses manage capital prudently and continue to deliver strong returns on incremental capital deployed.
Our view that Indian equities are in a secular bull market and will provide strong wealth creation opportunity
over the next decade stays intact and we would hence use every Market correction to accumulate good businesses that are
run by credible Managements at attractive valuations.

Good Market Wisdom for this Month : (Interesting Excerpts from George Soros, David Tepper etc)

"The Market does not beat them. They beat themselves, because though they have brains they cannot sit tight" - Jesse
Livermore.

"The single greatest edge an investor can have is a long-term orientation" - Seth Klarman.

There is enough liquidity in the system. The world's combined GDP was about $55 trillion in 2008, and $140 trillion was the
debt. Today, the debt has moved higher to $200 trillion, but the world's GDP has moved slowly towards $70 trillion. To create

[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

$15 trillion of GDP, it created $60 trillion of debt. The case with India is exactly the opposite.

Stock market bubbles dont grow out of thin air. They have a solid basis in reality, but reality as distorted by a
misconception. Every bubble consists of a trend that can be observed in the real world and a misconception relating to that
trend. The two elements interact with each other in a reflexive manner. - George Soros.

I made two major discoveries in the course of writing: one is a reflexive connection between credit and collateral, the act of
lending can change the value of the collateral, and the other is a reflexive relationship between regulators and the
economies they regulate. - George Soros.

Whenever there is a conflict between universal principles and self-interest, self-interest is likely to prevail.- George Soros.

You have got to make decisions even though you know you may be wrong. You cant avoid being wrong, but by being aware
of the uncertainties; youre more likely to correct your mistakes than the traditional investor.- George Soros.

[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

Im only rich because I know when Im wrong. I basically have survived by recognizing my mistakes. I very often used to get
backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or take flight. When I made the
decision, the backache went away. - George Soros.

Money values do not simply mirror the state of affairs in the real world; valuation is a positive act that makes an impact on
the course of events. Monetary and real phenomena are connected in a reflexive fashion; that is, they influence each other
mutually. The reflexive relationship manifests itself most clearly in the use and abuse of credit. It is credit that matters, not
money (in other words, monetarism is a false ideology). - George Soros.

We invest in a lot of bonds and preferred (stock), which we can convert to equity. It not as risky as people make it out to
be. - David Tepper, Appaloosa Fund Management.

For better or worse were a herd leader. Were at the front of the pack. We are one of the first movers. First movers are
interesting; you get to the good grass first, or sometimes the lion eats you. - David Tepper, Appaloosa Fund Management.

Non-consensus ideas have to be lonely. By definition, non-consensus ideas that are popular, widely held or intuitively
obvious are an oxymoron. Thus such ideas are uncomfortable; non-conformists dont enjoy the warmth that comes with

[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

being at the center of the herd. Further, unconventional ideas often appear imprudent. The popular definition of prudent
especially in the investment world is often twisted into what everyone does. - Howard Marks, Oak Tree Capital.

There is a time to make money and a time to not lose money. - - David Tepper, Appaloosa Fund Management.

Some of our best positions were ones we initially lost money on. - - David Tepper, Appaloosa Fund Management.

I guarantee that in every great blow-up there has been at least one big-name investor involved all the way down. Dont stop
your work on the downside because you cant imagine so-and-so owner making a mistake. It happens all the time. James
Chanos, Kynikos Associates.

I am putting S. Drunkenmiller as "Head of Research" for the same reason, 18-year olds are sent to war. You are too dumb,
young and too inexperienced not to know to charge. We around here have been around since 1968. This was 1978. I think a
big secular bull market is coming. We've all got scars. We're not going to able to pull the trigger. So, I need a young
inexperienced guy. But I think, you have got the magic to go in and lead the charge Drunkenmillers first job CEO.

[HBJ CAPITAL - THE MILLIONAIRE PORTFOLIO] April 1, 2015

FEDs monetary policy of low interest rates for the last 4 to 6 years combined with the current reluctance to raise interest
rates, despite strong economic data is leading to irrational risk taking and building bubbles in several asset classes including
Junk Bonds and Energy debt. For example : In 2006 to 2007, the period that is considered to be one of the most speculative
investment periods - 700 Billion Debt was raised. In 2013 and 2014, almost 1.1 Trillion in Debt has been raised and most
importantly last time only 28% of the debt was B-Rated but this time almost 71% of debt is B-Rated. Back in 2006-07, only
20% of the loans were covenants light. Now that number is 60%. This is going to end badly for Financial Markets.
Druckenmiller.

Regards,

Gokul Raj. P,
[Principal Fund Manager, HBJ Capital]
Date: April 1st 2015, Place: Bangalore, India.

Medium Term - Portfolio Guidance

Accumulate more High Quality Stocks such as TV Today & City Union Bank :
As Markets have rallied strongly, we find a dearth of good Investment opportunities. For Investors
with low Equity allocations, we would suggest them to accumulate good businesses that are available at
attractive valuations such as TV Today and City Union bank aggressively.
City Union Bank (CUB) is expected to be a consistent compounder in our Portfolios. TV Today
Network is a more nimble position in which our Investment rationale is predicated on the decrease in
carriage costs and the operational leverage kicker.

Looking forward to lighten Portfolios little bit :

With Markets moving into frothy valuations zone, we would like to lighten portfolios little bit by
booking profits in some of our stocks. Our Equity allocation of > 95% would not sustain for long. We believe
that a Small Cap/ Mid Cap portfolio such as ours should have attractive cash allocation to take advantage of
market volatility.

Close watch on the High Allocation Stocks :

Our Stocks including HSIL, Cera Sanitary ware and Indiabulls Housing Finance contribute almost 10%
each to our Equity portfolio and hence there is very little room to make mistakes here. While this
concentration increases the Volatility in the Portfolio, we believe that all these Stocks are good Businesses
and hence would be good for Long Term wealth creation.

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TMP Connect
[For new members joined TMP]
New Members who has joined during last two months need
to replicate TMP Connect ONLY, Since they are joining in
between hence a replica of actual TMP is created for them.
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Your TMP Connect [Only buy these stocks listed below]

Company Name

Allocation (as a % of your total planned portfolio size)

Cera Sanitary ware

3%

Poly Medicure

3%

Sanghvi Movers

5%

EClerx/ Persistent

5%

City Union Bank (CUB)

7%

Mahindra Finance

4%

Bajaj Electricals

4%

CARE Ratings

5%

TV Today Network

6%

HSIL

4%

Biocon

3%

Indiabulls Financials

5%

VA Tech Wabag

6%

Greaves Cotton

4%

Heritage Foods

5%

Cash

31 %

Total

100 %

Allocation % - If your
planned portfolio size is say
10 Lacs, you will be
allocating Rs40K towards
Cera Sanitary ware at CMP
which is 4% allocation.

Please follow TMP

Update which is released
once a month for further
buying price range for all
stocks in the portfolio.

Stocks which are not there

in this list, will slowly be
phased out of the main
portfolio. Hence, dont buy
them unless initiated.

Because of the fall in

markets, new members
will be able to buy certain
stocks at better prices .

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This is for new Clients who would like to have a little broader Portfolio
with additional stocks and would like to avoid the strongly run-up names.
We still believe that the TMP Portfolio itself would do well. So, this
Portfolio is only optional and useful for few clients alone.
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Additional Sub-Portfolio for New Clients

in addition to the Existing Portfolio (No Changes)

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TMP Update
[For existing members]

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Existing TMP (as on 1st April, 2015) No Changes

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Summary of TMP

Our Stock Exposure is currently above 95% of the overall Portfolio. Going forward, we would like to
increase Cash levels by a few Percentage points.
The total number of stocks is at 13. We intend to run a fairly tight and balanced portfolio. Hence, we
would not like to add new stocks without proper replacement.

During every significant fall, we shall be deploying cash pretty aggressively in fundamentally good
companies . We would build some Cash position for this from some of our Existing stocks.
Incase of opportunities where risk-reward is very attractive than any of our existing portfolio stock, we
would take a rational decision to swap the current share with the new stock.

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SIP Systematic Investment Plan

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Current Buy list March 2015

- Since our Current Equity Exposure is over 95%, we are not able to add stocks which are quoting at
attractive valuations. But as Individual Investors, if your Exposure is lower or your Total Capital size in
Equities is increasing with regular monthly Income this Slide will help you to know stocks which are
currently at good buying levels and you can Invest money in those.
- We believe this will help our clients to take advantage of Market conditions on a consistent basis with
guidance from our Research team. Make sure, if you are saving regularly Invest in the stocks listed in this
Slide constantly and you can see the rewards going forward.
- Also make sure that your Portfolio Allocation %s are similar to our recommended allocation and match
our Portfolio over time. This will help you to maintain a Balanced Portfolio which performs under all Market
conditions and compounds your wealth at a consistent rate. Also, other than Our Portfolio stocks the
stocks where you can do SIP has been mentioned in the next Slide.

Monthly SIP Investment = 10000 Rs

Total Accumulated Savings till now = 55000 Rs

Stock

Buying
Range

SIP Money
Allocated

City Union Bank

80-100

5000

This Months Investment

We have saved 5K this month

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= 5000 Rs

Next Update April 30, 2015

As mentioned in the previous reports, we would be giving regular update reports
at the end of each month. In addition to this, we would be buying/ selling stocks
whenever there is a good opportunity ( we expect to have a new Stock addition during
this Month at an appropriate time) and also keep you updated on the changes.
In the next Months Update, we would provide details on the following,
Market Update and Portfolio Strategy.

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THANK YOU

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