According to Mint Extraclass interview with Saurabh Mukherjea, founder and chief investment officer of Marcellus Investment Managers, frequent buying and selling of stocks may reduce gains despite investors' attempts to capture market opportunities. Mukherjea cited a specific example where a portfolio delivering around 14% returns throughout its holding period could have earned approximately 15.5% had his team maintained longer-term investments. As reported by Mint, he noted that "the buying and selling added zero value" to portfolio performance, despite having access to extensive data from company conference calls, broker notes, annual reports, and AI feeds.
Mukherjea is known for his Coffee Can investing approach, which advocates for deliberately dull strategies - finding companies that have grown revenue and earned high returns on capital year after year, then leaving the portfolio alone for a decade. According to the interview, he emphasized that "the less you do with your portfolio, the more likely you will beat the benchmark by some distance and you will end up making a good sum of money from that." His philosophy centers on the idea that investment decisions based on human judgment can be fallible, with examples like predicting whether Marico, Asian Paints, or HDFC Bank would turn around.
When discussing threshold decisions for holding stocks, Mukherjea explained that investors need to get only two or three stocks right in a portfolio of approximately 15 stocks to achieve significant outperformance. As reported by Mint, he used the example of investing ₹100, where ₹50 went to a stock that went to zero overnight, but the remaining ₹50 in another stock that performed exceptionally well, demonstrating how negative returns can be overshadowed by positive performance in diversified portfolios.
Mukherjea highlighted HDFC Bank's recent performance, noting that while the stock had fallen around 30% since November last year, its underlying fundamentals remained stable. According to Mint, he cited that the bank's earnings, liabilities, deposit growth, and asset quality remained stable throughout this period, with Marcellus spending time visiting HDFC Bank branches and competitors to observe that the bank's staff quality remained significantly better than most competitors. He warned against reacting to market chatter and media coverage, suggesting that flawed decisions could result from ignoring fundamentals.
According to Mint's report, Marcellus's data showed that portfolio "fiddling around" tended to detract from returns by approximately 1.5 percentage points, while the firm's live portfolio had outperformed the benchmark by around 2–3%. Mukherjea emphasized the risk of messing with portfolios, stating that "stock B, which could have made you 10x in 10 years, you fiddle around with that," warning investors against making flawed decisions by ignoring fundamentals and reacting to market chatter instead of focusing on long-term value creation.
