So this has been a phenomenal run from the bottom of the March lows. Exactly two months ago, on March 28,2023, Nifty was reeling under severe selling pressure at around 16800 thereabouts with the consensus being a hit of about 15000 not so far away. The rebound took everyone with surprise and to be honest, even someone like me who remains extremely optimistic all the time felt the pain. I was actually worried if my portfolio was all set for another 10-15% downtick!
So at 18600+, what are we seeing and feeling about the markets. I believe that except the last 500 points rally, nobody really bought in big because everyone was waiting for the eventual downtick, the kind we have been experiencing for the past 18 months. Thus, the moment market corrected around 400 points last week, people sighed a heave of relief believing that 17000 was in sight. Not this time, though. I’m sure this is one of those nobody believes in kind of rallies which will first propel the indices to a new life highs and then take it onward to 22-25K Nifty before catching a break before the next election.
The way portfolios have behaved is most satisfying. I’m personally up 25% from March lows and this has been a group performance. When three stocks with over 45% weightage of my portfolio are down between 30-50% from their last year’s peak, except an ITC, No stock has yet hit its life high and except TaMo, no other stock is even close to its 52w highs, I don’t think there’s even a beginning of a sign of exuberance in the market. This is just the fruit of patience, when people like me who like to remain fully invested all the times recover lost grounds before an onward march.
My basic contention is, Nifty should hit 23K if not more in this upswing while portfolios should be at least 2-3x in two years, marking one of the mega home runs in recent times. Does this sound too much? Well, Sensex went 5x in four years between 2003-07!
Coming back to a few of my favourite names! BSE is doing a lot better under the new leadership with renewed vigour though I’d still believe it’s waiting for one or more triggers to blast- maybe an HPX revenue stream, an NSE IPO or a Gift city exchanges merger- I don’t know! All I know is that at this valuation, I can’t lose money in a stock trading at less than the cash on its books plus the building valuation!
TaMo is in top gears, brisling with energy. The kind of two quarters it had delivered has made heads turn, just like the cars it make these days! I can’t even wait to make enough money to buy a Defender. Any company which makes aspirational, luxurious products will do incredible in India and JLR is right there at the top.
On similar lines, just see the kind of luxury items available on TataCliq, Ajio or even NykaaFashion etc. Right from pens to watches to clothes to better cars, Indians are beginning to splurge like Chinese in the early 2000s! Even though I’m extremely disappointed with the lack of sales growth in United Spirits, I do believe that Indians will end up drinking more of our good old Johnny!
One industry I have recently developed a taste for is the hotels though I would rather be a guest than an investor. The kind of opulence available in India in tier two cities like Jaipur is unbelievable! And the prices they charge is nothing compared to the services offered. It’s however a capital intensive business and even though I did look at an Indian Hotels at 150-180, I don’t think they’re going to be more than a fad in the investing world.
What I really, truly like is the financialisation and domestic consumption theme. I hold Reliance for it is slowly building an Amazon plus Apple kind of an ecosystem, earning almost regular subscription type money from repeat customers- Ajio, Reliance digital, Jio, and what not! Myntra and NykaaFashion are having a run for their money with the kind of competition Ajio and Tata Cliq are giving.
I do like Sula vineyard as a potential product but maybe am too old fashioned to understand why people who’ll drink to flaunt their social status would want to buy a cheap 1500₹ wine bottle which tastes like shit! Wine is like golf. It’s for the extreme premium customers who will pay obscene amounts to get their hands on to a rare name. It’s not a mass product because the guy who buys one bottle to show off or announce his arrival as a nouveau riche will never buy another bottle!
PS: ITC hit 452₹ today and I am sure it’s at least a ₹600+ in one to two years from now!
Life is all about Compounding! 