Turtle Risk Management is divided in 2 Parts:
1. How is the EXIT decided in the Stock?
2. How is the Risk allocation decided in the Stock?
1. How is the Exit decided in the Stock?
Risk Management is the engine of our investing process. We believe 40% is Return Management and 60% is Risk Management and that’s were our nerves are. We are one of the few Assets Management Company who decides when to Exit 1st before entering in the markets. Exits are planned on the downside not on the upside, because upside is exponential but the downside is where we want to control ourself with, the Exit allows us to enjoy 2 things:
- To Exit the Companies which are not Performing.
- To Hold on the Profits comfortably as we know when we will exit in the downside
So, the Next Question comes is, how you plan your Exit:
Exit Strategy is decided in 3 Parts:
1. 1st Exit on Price Strategy, it is derived by:
- The Stock should be below its 212 EMA.
- The Stock should be below its Long-Term Support
This EXIT Price is Trailed as when the stock rises the Exit Point automatically Rises, also as the stock does rally our Exit Point also does Rally, that allow us to hold on to the Profits
2. Exit based on Profits:
- The Business is experiencing downfall/Slowdown/Overvalued
- The Quarterly figures are getting lower and lower backed by the point A
The 2nd part must be backed up by the 1st part, Price, and Profit both together for deciding the Exit Part
3. Non-Performance of the stock:
There are certain stocks which are not going North, Nor South. These companies are of high concern, because they are having space, but portfolio is underperforming in this case our Exit are decided by 2 variables:
- Stock is Underperforming NIFTY 500 and the Sectorial Index
- We are getting a better opportunity to invest in Place of that business, so we should replace it.
The 3rd Exit Point is seen on a standalone basis, it may not have any connection with 1st and the 2nd. It depends on the Conviction of the Portfolio Manager about the Current stock and the new opportunity
