Stocks Portfolio
Quarterly update: Sept 1, 2020
This space shall be updated every quarter with performance for select stocks & suggestions to buy, sell or hold. Follow on Twitter to get regular updates on issues of Economics & Investing.
This space shall be updated every quarter with performance for select stocks & suggestions to buy, sell or hold. Follow on Twitter to get regular updates on issues of Economics & Investing.
Stocks Portfolio - Performance Review
Below is the list of potential stocks we track for investing. As you can see, majority of them are restricted to large cap stocks. There is enough money to be made within the large cap space of companies that have proven credentials in the Indian markets. Chasing small caps without expertise is not something we recommend for the retail investor, more so in Indian markets where corporate governance is a rare virtue.
The recommendations are divided into "Growth" & "Value" stocks. Growth companies are richly valued but have a good runway ahead & can be bought into as a part of the India growth story. Value pics on the other hand are stocks that have good potential but are beaten down currently for various reasons. These offer great long-term potential but don't expect magic the moment you buy these. That said, value stocks can beat the growth stocks in returns when the tide turns. Finally, there are sell recommendations on some great companies where we see very generous valuations & therefore don't see much price growth from this point. It is best to exit these stocks. However, as with everything else, we may be wrong on this. Time will tell. Watch this space. Disclosures: We may have invested in some of the recommendations below. Assume that we are biased on this one.
The recommendations are divided into "Growth" & "Value" stocks. Growth companies are richly valued but have a good runway ahead & can be bought into as a part of the India growth story. Value pics on the other hand are stocks that have good potential but are beaten down currently for various reasons. These offer great long-term potential but don't expect magic the moment you buy these. That said, value stocks can beat the growth stocks in returns when the tide turns. Finally, there are sell recommendations on some great companies where we see very generous valuations & therefore don't see much price growth from this point. It is best to exit these stocks. However, as with everything else, we may be wrong on this. Time will tell. Watch this space. Disclosures: We may have invested in some of the recommendations below. Assume that we are biased on this one.
Benchmark Indices Performance
Final Thoughts
Readers should keep a few things in mind in view of the above numbers.
- The returns we got between 2002 to 2008 were unprecedented. This happened due to global growth engine & very high inflation in India. This is not getting repeated in a hurry. Afterall we're a child only once. Same goes for the country.
- The story of 2008 to 2013 was driven partly by high inflation of 10% plus & the massive infrastructure debt that PSU banks unleashed. This was too fast for us to absorb. The berserk lending of this period is hitting us now in form of low investment & even lower lending for corporates. We grew too fast for comfort & got burst.
- After some PE re-rating between 2013 & 2017, we are mostly back to fundamentals now. Inflation is less than 4% now. This means that one should not expect 20% growth from companies anymore unless the economy moves at dramatic pace. This is not the Indian style of growth, regardless of comparisons with China, which have stopped making sense in this decade.
- So expect a reasonable 12% growth from large caps going forward. Anything more is a bonus. And that is great in an economy with sub 4% inflation. Eventually, there is no better place to be than Equity & be a part of the India growth story, which despite some bumps, still looks amazing.
- The recent drop in markets dur to Covid-19 pandemic offers a great opportunity to buy good franchises at right prices. If you are a passionate equity investor or trying to be one, this is your time. Take your buy positions & be prepared to hold for 5 years or more. You'll come out much stronger financially after this is over. However, stock investing is not for everyone. If you're new, pls try with smaller proportion of your portfolo & learn along. In any case, you'll learn about markets & much more about the kind of investor you are. Everyone is different. Happy Investing!