It has been a good year in Shikhar capital. From a universe of thousand stocks we arrived at some very few stocks (Less than 10), and then the stories behind the stocks which we shared with our readers turned out to be philosophically right. The best part in this small journey was not the stock price but the conviction supporting the stories.
Just like 1929 and then 1987, and then 2001, and then 2008!!!
So stock market is at all time high and there is so much gush of liquidity that all investors are astonished. Even after so much of FII selling, markets are at the top because of support from the domestic investors. With every Mutual fund manager brainwashing for SIP’s the markets may have no dearth of liquidity in near future. Mutual funds which are 100% invested all the time are the happiest lot and fund managers who are or were waiting for markets to correct are having a hard time.
As mentioned in earlier blog posts also, we have been seller of many of our stocks like Adani enterprise, Rain industries (Which now is multi bagger, though we have small holding left and will be initiating sell soon), Westlife development etc. (Mostly small and Mid-caps) and buyers of Reliance, Tata motors, Jubilant food works and Adlabs entertainment.
“Biggest bubble of all time .. ruining people across nations, geographies, races and ages ….’
Above graph simply explains what bitcoin has grown into. There is an intense competition between companies like Amazon, Google, Apple, Microsoft and others who every second are working on innovations, are strategizing on their future and then there are investors who bet invest on these companies and all of this takes decades.
So, the market is at an all-time high, and we are inches away from Nifty @10,000/- Valuations of mid cap and small cap are so stretched, that some MF like DSP black rock has stopped taking new fund flows.
We at Shikhar capital started getting cautious at 9000/- booked lots of profits in mid and small at 9600 and now sitting idle.Lots of profits were gone into Tata Motors which is muted and Jubilant food works which have rewarded handsomely after Q1 results. And now we remember the following quote by John Keynes
“The market can stay irrational longer than you can stay solvent.”
Last week Westlife Development the master franchisee of McDonald’s in the south and west India declared their annual numbers.
We analyzed the numbers and are not at all happy with them . its been years and years of losses and sales are marginally higher to around 900 crores. Marcet cap is around 4000 crore and we now getting nervous about potential returns from this stock.
We have accumulated this stock at around 160-175 and started selling it around 250 with last lot sold at 220 .
We at Shikhar Capital had booked partial profits in our Midcap and small cap holdings like … Adani enterprise, Westlife, Associated Alcohol, Rain, Escorts, Dewan and plowed all these profits into TATA MOTORS.
But, Tata motors has been a downward trend and now we are feeling bit nervous.So why this downward trend?
So for last one month markets are flirting at 9000 level to 9300 level and we are booking profits bit by bit.
We have booked some profits in Adani , Rain , Westlife ,Escorts , Dewan housing etc and sitting on 15 % cash as of now. Some of the profits booked from small and mid cap like associated alcohol etc are plowed back into Reliance and Tata Motors.
So, it’s tough times as — “I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy. –Warren Buffett”