Module 11 · Investment Process & Portfolio Management¶
What this module does. Assembles the analysis into a repeatable process: idea generation (screens, events, insiders, a circle of competence), a stage-gated research process, the investment memo (with a complete sample on Kaveri), position sizing and portfolio construction (Kelly, max-loss, liquidity, concentration, cash), monitoring and selling (with the current Indian tax rules), behavioural finance and decision journals, and — for option-literate investors — expressing fundamental views with derivatives inside Indian F&O rules.
Why it matters. Analysis without process produces occasional insights and frequent losses. Process is what makes results repeatable and reviewable — and what a personal research operation (the private casebook) runs on.
Lessons¶
| # | Lesson | One line | Time |
|---|---|---|---|
| 11.1 | Idea generation | Screens with queries, event sources, insiders, sectors, the circle, the funnel and kill log | 70 min |
| 11.2 | The research process | Kill test → triage → deep dive → memo; reading order; research log; when to stop | 60 min |
| 11.3 | Writing an investment thesis & memo | Structure; the variant perception; the complete Kaveri memo (Watch; buy below ~₹260) | 75 min |
| 11.4 | Position sizing & portfolio construction | Kelly and its tails; max-loss; liquidity; concentration; cash; drawdown rules | 80 min |
| 11.5 | Monitoring & selling | Quarterly review; four sell reasons; averaging down; STCG 20% / LTCG 12.5% and the ₹1.25 lakh exemption | 60 min |
| 11.6 | Behavioural finance & decision journals | The biases that matter; base rates; process vs outcome; the journal | 60 min |
| 11.7 | Fundamentals × derivatives | Implied move vs surprise; IV and skew as information; expressions; Indian F&O practicalities; tax | 75 min |
Connections¶
- Back: everything — the memo consumes Modules 04–09; sizing consumes 06.8.
- Forward: Module 15 runs the process end to end; the private casebook implements it with templates.
- Tools: the casebook
PROCESS.md, templates andtools/pull.py; the terminal'ssizing.py.
You're ready to move on when you can…¶
- Run a screen, an event scan and an insider check, and log the ideas with sources and kill criteria.
- Execute a 30-minute kill test and a 3-hour triage on any idea.
- Write a one-page memo with a variant perception, valuation distribution, catalysts, pre-mortem and dated thesis-breakers.
- Size a position with fractional Kelly and the max-loss rule, apply liquidity and governance overlays, and audit the portfolio's thesis-variable concentration.
- Run a quarterly review, apply the four sell reasons, and compute the tax on a sale.
- Keep a decision journal with confidence levels and grade process separately from outcome.
- Map a fundamental view to an option structure and state the Indian F&O constraints.
Tested by: Stock-pitch mock and the final exam.