So, Nifty at the doorsteps of 9000, all the bears are hiding and bulls are on the rampage , so the tide is getting higher.The D mart IPO of 18000 Crores is one of the biggest and going to suck liquidity but who cares. 2008 bull market ended with Reliance power IPO, but before that DLF IPO (IPO price 1000 right now at 145 ) and Big Bazaar IPO (IPO price 1000 if I am correct and now n number of companies with god knows the complexity of valuations huh….). So are we on the cusp of the end of this run … we at SHIKHAR CAPITAL don’t think so…..
After 2008, markets have waited for 9 years to get some momentum so maybe we still have some years at least 2020 for this market run. But in short, term it’s always fun to predict markets (As per Buffett no one can predict markets and we do agree on this, thats why fun).
The last time we touched 8800 we had a sell call and then the market crashed to 8000 (it was a Hunch call as we were getting uncomfortable with valuations and the Demonetisation + trump happened) and we got lucky. We had unloaded stocks like Delta corp, edelweiss, Associate alcohol and then at 8000 we loaded Reliance, Adani enterprise, Rain, First source etc. and of course our top three holdings – West Life, Jubilant, and Tata Motors.
So what’s the call at 9000, we are seeing each day XYZ(Shit stocks ) stocks getting higher and higher, but still, we are not getting the feeling of uncomfortableness. We believe this rally will continue to at least 9400 -9600 and maybe then we will take some breath. We do feel that the time is getting ripe enough to churn some stocks. We are selling some of our mid-cap stocks up to 10% of holding and loading Westlife plus Tata Motors.
Many emails we have received asking our love for Consumer stocks like Westlife, Jubilant, Adlabs, and jet airways … Being a follower of charlie Munger and if you see their best shots they were Disney, coco Cola , Wrigely, and Gillette. When we deeply think about it, we see whenever economy grows good consumer names do pretty well. In fact, if they have some inherent advantage like Gillette or Coco cola you have a winner in your hand.
If you see Indian markets its 130 crore people, Dominos and McDonalds are household names …at least a person will have one burger in his or her lifetime? McDonald’s in West ad south are 232 and they are doing sales of approx 4 crores a year per restaurant.And jubilant have 1000 restaurants and doing only 2,.5 crores per restaurant. This two stocks forget about potential, have not even scratched the surface. We believe these two MNC ‘s are one of the best bets in Indian markets and that’s why have kept them in our long term portfolio. Tata motors and Jet airways detailed analysis is already done in earlier posts ( Now, Warren has approved airlines and Geoge Soros + Rakesh Jhunjhunwala are long on TATA motors).
So its first of march people salaries getting credited so SIP will have fun, Dow all time high with breach of 21000/- and nifty breaching 9000.All this SIP will flow to Nifty 50 and some in BSE 200.. so the downside is capped.Warren approving ETF’s and absence of FII will be very much advantageous for large cap stocks. So we at Shikhar Capital believe large cap will do fine in this year and our top three bets include TATA MOTORS.
So keep the faith, moment we start unloading we will be posting but we are having are stance changing from small and mid cap to large caps with some more loading in Westlife, Jubiliant, and TATA Motors.
The last point we are very very bearish on real estate. Today they have some fun on bourses but When the herd sees returns of 20percent in stocks money is gonna flew from real estate to Stocks. At least when people have bought second, third, fourth homes for investment, and see the returns in stocks … they are gonna sell their investments(If not they will keep on bedding with 10% interest rate). Investment is meant to give returns… But since real estate is a very large investment it will take the time to reverse the flow.
Real estate is leaking boat
“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. Warren Buffett”
TILL THEN ENJOY THE RALLY