Nice article. Some questions:-
- I agree with Market cycles. Have read Howard Marks. Naren is saying here that we know that now small cap and midcap are overvalued so as per prudent asset allocation theme, we should shift some portion from small and midcap stocks to large cap. But then what about allowing to compound theory?
- I will give some examples like Polycab, Astral, Apl appollo, SRF, Chola, all these stocks are doing very good and they are from midcap category. Their PE has also re-rated . If PE was earlier in twenties , now its in fourties. So is Naren saying that I should transfer allocation from these stocks to large cap stocks like Dmart, Titan or HDFC bank etc?? Since I think all these midcap stories are fast growing and Consistent compounder types in next decade, does it make sense to sell them now due to exuberance and get into Large caps for safety???
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