The Six-Step Framework for Building a Cloned Portfolio

In the world of investing, originality is often overrated. Many investors chase new ideas, complicated strategies, or insider shortcuts — only to realize that the path to success was hidden in plain sight all along. The concept of “shameless cloning”, popularized by investor Mohnish Pabrai, challenges this very notion. It encourages investors to replicate proven ideas from successful investors — but to do it intelligently, not blindly.

A recent video exploring this concept dives deep into how data-backed cloning can help retail investors build a high-performance portfolio simply by mirroring the high-conviction bets of India’s top stock pickers. Let’s unpack the philosophy, method, and results behind this fascinating approach.

The Philosophy: Why Copying Isn’t Cheating — If Done Right

Mohnish Pabrai, a disciple of Warren Buffett and Charlie Munger, built much of his investing framework around emulation. His idea of “shameless cloning” rests on a simple truth — you don’t have to reinvent the wheel to succeed in the market.

As the famous Hindi proverb says, “Nakal karne ke liye bhi akal chahiye” — even copying requires intelligence.

In investing terms, that means understanding why something works before you imitate it. You don’t just follow famous investors blindly; you study their reasoning, conviction, and holding patterns. The goal is not to steal ideas but to learn from the best — leveraging their research, patience, and insights as a foundation for your own strategy.

The Data Source: Learning from the Masters, Legally

The beauty of this approach lies in its transparency. India’s SEBI (Securities and Exchange Board of India) mandates every listed company to disclose shareholders who own more than 1% of equity.

This rule creates a goldmine of publicly available data — verified, legal, and updated every quarter. Using platforms like Trendlyne.com, one can easily track which stocks are being held by top Indian investors such as Rakesh Jhunjhunwala, Vijay Kedia, Dolly Khanna, Ashish Kacholia, and Porinju Veliyath, among others.

The speaker in the video analyzed this data as of December 2023. Collectively, these marquee investors held stakes worth over ₹77,000 crore across 370 companies — a remarkable window into India’s most successful portfolios.

Measuring Conviction: Looking Beyond Portfolio Value

Interestingly, the study didn’t define conviction by the size of the investment but by the percentage of ownership in each company.

For example, in Rakesh Jhunjhunwala’s portfolio, the well-known stocks like Titan or Tata Motors weren’t necessarily the top conviction bets. Instead, smaller holdings like Aptech (43%), Concord Biotech (24%), and Star Health (17%) reflected much higher conviction levels, because these represented a larger portion of his ownership in those businesses.

This is a crucial insight for retail investors — conviction isn’t about how big a stock appears in a portfolio but how strongly an investor believes in it relative to their total holdings.

The Six-Step Framework: Turning Data into a Working Portfolio

The speaker proposed a six-step cloning framework that any investor can replicate with some time, data access, and discipline.

  1. Extract data of all shareholders with more than 1% stake for the past eight quarters from Trendlyne.
  2. Add BSE and NSE stock codes using ChatGPT or similar tools for easy data mapping.
  3. Fetch stock prices via Google Finance to record entry and exit prices.
  4. Identify top 3–4 stocks of each investor by percentage shareholding.
  5. Clean the data manually, removing inactive or exited positions.
  6. Simulate investments, for example, ₹10,000 per stock, and track performance across quarters.

This process transforms publicly available data into an actionable portfolio simulation — a clear, repeatable system that relies on discipline rather than guesswork.

The Results: Beating the Market Through Data-Driven Cloning

The “shamelessly cloned portfolio” that emerged from this study consisted of 57 stocks, requiring a total simulated investment of ₹5.7 lakh (₹10,000 per stock).

Over eight quarters, this portfolio generated a profit of ₹3.87 lakh, yielding an impressive 41.4% annualized return.

To put that into perspective:

  • Nifty 50 delivered around 12.5% during the same period.
  • Even Quant Small Cap Fund, one of India’s best-performing funds, returned 29.9%.

Clearly, data-backed cloning wasn’t just theory — it outperformed even the most active fund managers.

The Caveats: What Can Go Wrong

While the results are striking, the video rightly emphasizes that cloning isn’t foolproof. Around 35% of the stocks in the cloned portfolio actually resulted in losses.

Moreover:

  • 80% of the holdings were in small-cap or micro-cap companies, which are inherently more volatile and less liquid.
  • There’s a 2–3 week lag between disclosure and public availability of data, meaning the investor’s current positions might already have changed.
  • Manual cleaning and verification are crucial because company names, symbols, or ownership structures often change over time.

So, while cloning saves time by borrowing the insights of top investors, it doesn’t eliminate risk. Even the best investors make mistakes, and blindly copying them without understanding the context can lead to poor outcomes.

The Professional Dilemma: Why Funds Don’t Clone

Interestingly, despite its effectiveness, no mutual fund or smallcase in India officially uses this exact cloning strategy. The reason is both philosophical and practical.

“Copying” doesn’t sound professional — it’s difficult to justify a management fee when your process is based on emulation rather than proprietary research. Fund houses prefer to market themselves as original thinkers rather than as intelligent imitators, even though cloning may often outperform their models.

Intelligent Replication Over Blind Imitation

At its heart, shameless cloning isn’t about lazily copying trades. It’s about recognizing patterns of excellence and leveraging them smartly.

It encourages investors to:

  • Track disclosures rather than rumors.
  • Study conviction levels instead of just brand names.
  • Focus on data-backed insights over market noise.
  • Build discipline and patience by following proven methods.

As the video concludes, cloning works — but only when done with akal (intelligence). It’s a reminder that humility, curiosity, and structured imitation can often beat ego-driven experimentation.

Final Thought: The Smart Investor’s Shortcut

In a market flooded with information and speculation, shameless cloning offers a refreshing, rational shortcut. It blends the wisdom of legends with the accessibility of modern data tools.

For the everyday investor, it’s a practical way to align with India’s most successful minds — without needing insider access or complex algorithms.

So, the next time you’re tempted to chase the next “hot tip,” remember this philosophy:
You don’t need to be first to succeed. You just need to be smart enough to follow the right people — the right way.

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