(post deleted by author)

What a rally today after election results!

As usual my portfolio stocks did not move much today as neither they are momentum based nor the key economy facing nation building sectors.

It is on these very days that you get a feel that at least some part of the portfolio should be in momentum, in fancy sectors or economy facing ones.

The transition is not easy but ideally would have liked to have a 10% exposure to excellent businesses in such sectors, maybe 1-2 companies would suffice.

I had even chosen my top picks but failed to latch on to them in last year or so…

Meanwhile, my stocks are also doing fine, if not great…but thats the way they are meant to perform…slow and steady and hopefully they continue to do that…

Current portfolio looks like below. Have excluded some 1% picks which I may weed out gradually except maybe Spencer Retail…

Some minor changes to percentages might have happened because of run up of Trent and some selling of HDFC Life for need of funds.

Disc: Invested & Biased. Not a buy/sell recommendation. Not eligible to give any advice. Post only for academic purposes and learning. I can be wrong in all my assessments.

The reason for such cheap valuation is 1) there traditional vehicle focused portfolio or 2) uncertainity in capturing EV market or 3) some kind of promoter disputes?

@meekinvestor Sir, what are your thoughts on Waaree Energies. The company Has done well in this year and may come up with IPO in the next year.

@avneesh

The macro parameters that you have highlighted are well known in the markets. Inspite of that, markets continue to go up. That’s the way with the markets. The expected rarely happens. If you remember when the Israel Hamas war happened, everyone expected markets to go down and go down significantly. Factors like high crude prices (with predicitons of crude going to 120 USD), high bond yields, high dollar levels ( above 83 against INR, still remains above 83 ) all were pointing to a correction in the markets, or atleast softish markets for a while. But markets have a mind of their own, and most of the times tend to get events and their effects right. ( in some rare instances, there can be an erroneous reaction atleast early on which gets reversed later on) Just to drive home this point, one needs to see the market moves before exit polls. It went up two days in a row, when pollsters were not too sure of outcome, but markets seem to have got it right. I remember in run up to Loksabha 2014 elections, markets had started rallying well before elections sensing a stable govt.

Want to narrate an anecdote. I usually listen to a few technical analysts on their regular YouTube videos to get a sense of what they think. I was listening to a celebrated ( whose subscription service is highly expensive ) technical analyst who had got the previous bull run absolutely right but of late had turned bearish. At the time of Israel war or sometime later, when the Youtube video was available we were recovering from 18800 bottom and closer to 19 k and he was of the view that there may not be much upside above 19200-19300. And he ennumerated the above very factors I narrated as arguments as to why markets would not rally. Now that was a bit surprising to me especially when a purely technical guy starts using macro factors as a part of his analysis. ( I still am a fan of his style of analysis, but I take everyone’s views with a pinch of salt) Nothing wrong in looking at macros, but the primary job of the technical analyst is to follow charts and see where support levels are and how markets are behaving near those levels.

In above post we had identified 18800-900 as a possible level to see if a bounce materialises and then take a call. So rather than be predictive and try to predict too much, we have to position ourselves by looking at possibilities and then try forecasting outcomes.

One of the reasons I maintained my bullish stance was the overall strength shown by small and midcaps space even during that correction.

Coming to scenario as of now, post BJP’s victory in 3 out of 4 states, markets seem on steroids. Today marked a big bullish day with indices hitting all time highs with a big gap up opening.

A lot of projections related to bullish phase in markets leading up to the elections are now floating around. A lot of fancy targets are being bandied around for indices. While this may or may not happen, we have to remember that elections are nearly 5-6 months away and that is often a long time in equity markets. There can be ugly corrections in between market rallies as well and these corrections often will shake investor confidence.

One observation I have related to markets is that the period from January to March is often a time for some kind of topping pattern in markets. This can be a short to medium or long term top. With the kind of rally we have in our markets and the narratives that are being built up, we could end up having a frothy rally leading up to the January-March time frame and if that happens, we should be on the lookout for signs of a top nearby (of whatever time frame, short or medium or long term. ) This is just a theory based on observations during past few years, and we need to see how things play out (theory may not play out and markets can keep racing ahead, but I would be a keen observer just to see how these things play out) .