My investment journey has two distinct bull phases and one bear phase. First lasted from around 2009 to 2017. During this phase although the initial capital was not big, the returns were quite good and hence by end of 2017, corpus had grown to a decent amount. This was contributed to by some big winners like Ajanta, Kaveri, Mayur, Atul Auto, Canfin, PI Inds, Avanti feeds etc. And in many of these starting allocation was decent to begin with and that helped a lot.
Next was bear phase from 2018-2020 during which time portfolio at one point of time was down 40% from peak value and rest of the times meandered along without crossing peak value posted in Jan 2018. This was because of the overall bearish sentiments in small and midcaps. And I did not recognise that that time was not the right time to be in these kind of stocks. That was the phase where quality at any price worked like a charm. ( If you check Saurabh Mukherjea kind of portfolio, it might have done very well during that time. ) It was the time to buy quality companies at high PE and sell at higher PEs. And I had mental blocks about paying high unjustifiable PE and hence suffered.
That period of agony ended in the bull market that followed Covid crash. And since then things have been going well. Big winners with very aggressive allocations in stocks like Laurus, Usha, HBL, Time techno, PSU names etc have helped in this phase. Here too I was able to identify the PSU rally in its very early phase based on charts. I had gotten into a lot of PSU names early on , but never had the conviction to allocate big. And I exited quite early because I was never too convinced about the fundamentals of the PSU rally. But other stock picks like Usha, HBL, Time techno, JK bank etc took care of things.
The reason small and midcaps have outperformed big time is that they were neglected from 2018-2020 during routine markets. And during the Covid correction the bottom fell off for these small and micaps, thus making them highly attractively valued and highly underowned. This is usually a fertile ground for multibaggers. Now after such a massive rally in these segments of companies, most of the juice seems to have been squeezed. Pendulum gradually seems to be swinging towards overoptimism and over ownership. There still might be some more way to go, but low hanging fruits have already been plucked.
Regarding the conundrum about why someone is buying stuff at 2-3 times my buying price, I usually attribute this thing to market situation. In Gujarati, there is a saying ” Bhaav bhagwan chhe” ( Price is supreme) No use questioning the ticker tape. Sometimes we tend to complicate a simple procedure by too much reasoning.
Liquidity remains the backbone of any bull market. And we have ample liquidity in our markets thanks to good economic conditions and overall global liquidity overflow. Here too there is the principle of reflexivity working. Bull markets attract liquidity and liquidity keep propelling bull markets higher.
Coming to liquidity in individual stocks, many a times during early phase of bull markets, liquidity is very low. Once it catches market fancy, big volumes start getting generated. There are very few stocks that keep going up on low volumes all the time. Usually this is seen in manipulated stocks or stocks with smallish circuit filters. I tend to stay away from these names as far as possible.
@amangoklani I don’t have any idea about Vaidya Sane Ayurvedic labs.
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