Take on me, take me on

hi and a very good Sunday morning. Started the day with a fantastic TED talk india by the eminent chef, Vikaas Khanna. In this talk, vikaas spells out his journey with lots of determination against odds that keep propping from time to time.

he makes a wonderful statement when he says:

ek beej ko dabna padta hai zameen ke neechey ek pedd ban ne ke liye

inspiring.

which brings me to the purpose of this blog. Time and again I have emphasized and shared with all of you that investing is a journey, the outcome of which can be immensely rewarding.

In January and towards end December including in the Jean post, I had expressed reservations on returns in the market for 2018. Even as a person with hopefully an open mind scouting for ideas to add or enhance in the portfolio, much of the like stocks seemed witherky fairly valued or did not leave much comfort for meaningful returns ahead. Yet I took the choice of being invested and not on cash as the approach to this is essentially a part of how you assess your horizon. To me, a knock off of 10 or even 15 pct in stocks that you own is just a breather unless there is something radically wrong in the working of the company or the sector to which it belongs.

as it turned out to be, some stocks made new highs such as Venky, some are almost stagnant like HEG, some very marginally down like tyre stocks and some perhaps in line or even slightly more with markets. Now presuppose you were in December or early January and had to take a call on what to sell or reduce. No matter what one says in hindsight no person has a clue to say I know x co will hit a new high, y will be more or less same levels, z will be down and by how much. To know this you need to know the future and not discover it. What if in your prudence you had sold off the gainer, reduced the non event stocks and kept the ones that lost out. I can assure you your portfolio would have looked worse and your confidence in decision making could have been somewhat impacted.

a great learning in life from my work, interactions as also from investing is a winner is one who believes he can win. To keep his mojo alive he sets his sight on a goal and relentlessly pursues his path. Occasionally tired and sometimes even slowed by rest, he moves on and on for his knows at the end of winning lie ovations, accolades and then new shores.

i don’t think with the recent correction in some stocks there is any concern. If in December end and January I felt the stocks were good though their expected annualized return had reduced for 2018, I stand to think now I have that narrow return plus the corrected percentage to make up a far more interesting return for 2018. If I further analyze, we are almost 9 months to the end of 2018 and the returns ahead annualized for 9 months look good to me.

the current fiascos in public sector lending are nothing new. It was rather silly in the first place to believe old habits will die fast when they were recapitalized. More sensible people today are prodding govt to consider privatising some psu banks, a move I will be supportive off. There are many ways to check undue monopoly and the state ownership of these NPA laden corporations make little sense. Besides with no owner of the banks other than govt who never involves in day to day functioning the existence of them takes away an entrepreneurial spirit. The latter is a huge catalyst in shaping economies and creating new business models and leading in disruptive innovation. One of the reasons why we see huge new businesses emerge from USA and china is this spirit of a new generation enterprenuer like Steve jobs was or mark zuckerberg is or Elon musk or jack ma are becoming.

I also see no impact other than favorable on private banks like Kotak, Indus ind, and some new generation banks tha emerged recently from the pvt stable.

while I have not added to my holdings in banks, the correction has drawn my attention to several emerging leaders in consumption, technology, manufacturing. I have not changed my stand on pharma though have not added there as barring Lupin none of the pharma stocks even fell in line with market. In fact some of them rose vs market fall.

It never disturbs me when on social media like twitter I have a few comments from people telling me market is headed to new lows. These guys claim to be investors but in effect are only coin tossers. A true investor looks for opportunities and knows the scalability of them. He may have time and lack of fresh capital against him in phases but he knows that you can lose far lesser than make. And if he knows investing is a process of transfer of wealth from the impatient and sketchy to the patient and willing he just keeps at it. In fact the biggest flaw in thinking is about this thing called market. In analogy, you can’t say the entire world is going to see problem. Some will and in that problem some will see opportunity and in a constant changing world, money will move towards he who dares and keeps moving towards his journey. As they say, pessimist neither win wars nor did a pessimist discover the secrets of the stars or sailed to uncharteted land or opened a new doorway to the human spirit.

True it’s not just about being optimistic but also realistic. Here’s where the swing towards the cos you own sets in. Since January I have interacted with few, seen results of many and even attended Ceo forum with leaders like mr Biyani, uday Kotak, mr subhash Chandra, mr Mariwala, Mr. Anand mahindra etc talk. I don’t see pessimism, I hear lots of change has happened for good in transmitting from unorganized sector to organized. I hear gst collections post March with a lot of uncertainty in processing of forms clearing and thus a move towards a new india. I hear lots of good coming from Rera. In my professional capacity I hear far more talk of technology, better productivity, embracing more IP (the biggest wealth creator) and other positives.

To sum up for now, I see a continuity of the bull run. Given the corrections, my expectations of the market return stand significantly improved. a lot of muck in india including tax evading out of shape entrepreneurs who have run to Dubai, UK or other places and defaulting companies being cleaned up is in place. The balance sheets of few cos look healthy with capex done and gst inventory issues sorted. I see the possibility of a new high for markets in 2018.

 

disclaimer: views expressed are personal. Pl treat them as only a view point. I am neither a professional nor a regd advisor. But I have no vested interest in this view as I have not recommended any stocks. My intent is to see a happy educated and self made lot of investors. Nothing satisfies more when some of them I have never met walk up to thank me or take a selfie. We are one nation of investors in the right direction towards our own empowerment. Cheers

 

Ps… no proof reading, typos are too small a part of a passionate life on a blog though they matter the most in a professional set up.

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6 thoughts on “Take on me, take me on

  1. Himanshu nagpal says:

    Awsome. Thanks .
    I am learning new things n perspective from you.
    Regards

  2. Nishant says:

    Very good article Sir. As we all read time and again…being bearish is more fashionable than it is profitable. Our country is currently carrying out a pest control exercise and some pain is a given but when it is done, we are assured of a clean house for a long time to come.

  3. DESAI MANHER CHIMANLAL says:

    Always learning lot from your authentic writing. I am also positive India is definitely going in right direction as all steps taken by government is for future growth of our country. Now it is in our hand to see same government is there for next decade at-least

  4. ravinder sharma says:

    superb sir….

  5. Sam says:

    Hi Safir, what was the rationale for selling your stake in Sangam Advisors? Your holding period was probably way way lower than most of the other stocks in your portfolio. While you did make a decent gain on the transaction, why did you sell it off? The timing of you sale was amazing though.

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