So Nifty is knocking at 9000/– Historic moment indeed. Fantastic volatility, first the lows of 6800 during last Jan ’16 – Feb’ 16, Then it went to highs of 8800, after that, it again went down to 8000 due to demonetisation & Trump(On same day ) and after that, a straight forward bullish march to 9000/-
We at Shikhar capital were lucky enough to get these lows and highs correct even though we don’t speculate. But since we are low on capital we have to churn our portfolios to get some more juice. If capital allows we would love to keep our portfolio intact for years together.
Nifty @ 9000– This has tempted us to partly book some profit in our scripts. We have booked some profits in Adani, Rain, V Guard, Tata global, Escorts, and Reliance. All these profits have been pulled and then pushed to TATA MOTORS. We still have our targets of 9400 -9600 for NIFTY but Tata Motors look so tempting that we have to churn our portfolio.
UP Elections – We have anticipated a Hung house in U P, But the way SP feud took place, and the last leg of NAMO campaign we have tilted our views towards BJP. Also with other state elections being swept by BJP, we are getting more gut feeling of NAMO magic sweeping UP. Our expectations were Hung Govt and targets were set at 9400-9600 but now if BJP govt wins the UP election we could see a big rally in Nifty up to 10,000 to 10200/- Why because it will give a major confidence boost to NAMO after BIHAR DEBACLE. And it will also help the govt to take some major reforms. All this will act as self-reinforcing cycle and will help govt in a big way. But as they say never predict ———– – A) Women’s Mood B) Stock market C) Election results.
Reliance Industries – We were very bullish on reliance industries, but now seeing the story unfolding, we see some nonperformance ahead. Why ? a) Airtel has to retaliate and Sunil Mittal being first generation telecom founder will be playing one blow to JIO, which will be negative. b ) The 30% rally which reliance has given is enough for us as of now.
The Opportunity cost is more in shape of TAMO. So we are out of Reliance trade and all in TAMO. Also if markets go down for any reasons, reliance will be affected. One scenario is in favor of Reliance and that is domestic money. All large cap MF’s have their major holdings in HDFC bank. Now with real estate going to be a dud for coming many years, the growth in HDFC will be limited. So many MF which were not holding reliance will have to load reliance. So the loading could take it higher but then the JIO is a very long term story. We believe we wud get another time to get in.
Other top holdings – Westlife, Jubilant– Stil very very bullish on them and are intact in our core portfolio.
Warren Buffet – In the annual shareholder’s letter warren buffet has kicked all the fund managers where it hurts most. So, what he said, in short, is that all fund managers are ripping the customers and ETF ‘s are the best bet. This has led to large inflows to ETF’s leading DOW to surpass 21,000/-. But it has also resulted in a very very crowded trade. We believe the same will be just copied in India and hence Nifty may not see large falls. But Mid cap and the small cap will see outflows which will eventually go into large caps. Since Warren Buffett himself is not ETF manager and neither we at Shikhar capital so we will be continuing our endeavour and fun with individual stocks.
Snap chat – Wow what an IPO. No earnings and no earnings at distant sight still commanding such a valuation. Snap chat is trading 77 times its revenue (WTF). Markets are at Euphoric times and Snap chat could just dent the sentiments. Snap Chat reminds us of 2000 technology stocks.
So, with the stamp of Mr. Buffette on ETF – Large cap stocks, DowJones, S&P will be doing fine with a limited downside as of now but mid-cap and small-cap especially in India could largely underperform this year.