So the markets have gained 8% in a span of less than a month. Relief rally in a bear market, or genuine revival? The results released so far have been viewed in a positive light with the IT majors being in line or exceeding it, auto companies largely in line though circumspect of the future and the bank NPA bomb has not exploded yet with Axis numbers and HDFC Bnk numbers bearing out.
SO what I mentioned in my last post largely remains true with debt yield locking (M2M strategy) and dipping into equity. I would not be specific sector long, more stock specific, though some sectors like Power, Cap Goods, Infra - largely cyclicals...may take their own time to revive due to macro and policy issues.
What to do for now? Book partial profits in auto, FMCG etc, which has moved smartly, start taking small positions in cyclical names - probably I dare say some banks, even GMR, Suzlon, L&T, ICICI Bank, Axis Bank, M&M, Hindalco, Exide & Adani Ports.
Sunday, January 22, 2012
Thursday, January 5, 2012
2012 - Renewed hopes or hopes dashed?
2012 has begun, we are trying to be all chirpy and happy. I remember attending a panel last year, where in Madhu Kela, Navneet Munot etc were on the panel (Was Sameer Arora around? My memory fails me). I remember Madhu being cautiously optimistic - saying it will be a stock picker's market, Navneet being circumspect etc. The same note of caution being sounded now. Lets take stock of things now...
PROs: Government finally doing things, we can expect atleast some traction in retail FDI, GST, energy de regulation etc. Probably the fiscal deficit gaps get plug with divestment and buyback strategy, interest rate cycles peaking out, inflation taming off.
CONS: Widening deficit, if rupee remains the same and oil prices where they are, things could get ugly. Some policy paralysis could nullify growth. FII sluggishness will affect our markets.
So my strategy? Play debt in the first half of 2012. Lock in those fantastic yields, play for return or M2M. At the same time, dip a bit in equities, especially the structurally strong business models. Assume 2 quarters of bad numbers. Also, realise that we may see some anemic growth for a while. Its been 7-8 years of continuous growth by corporates, probably that growth may take a breather. 2012 may be more of patience and strategy than a roller coaster ride.
PROs: Government finally doing things, we can expect atleast some traction in retail FDI, GST, energy de regulation etc. Probably the fiscal deficit gaps get plug with divestment and buyback strategy, interest rate cycles peaking out, inflation taming off.
CONS: Widening deficit, if rupee remains the same and oil prices where they are, things could get ugly. Some policy paralysis could nullify growth. FII sluggishness will affect our markets.
So my strategy? Play debt in the first half of 2012. Lock in those fantastic yields, play for return or M2M. At the same time, dip a bit in equities, especially the structurally strong business models. Assume 2 quarters of bad numbers. Also, realise that we may see some anemic growth for a while. Its been 7-8 years of continuous growth by corporates, probably that growth may take a breather. 2012 may be more of patience and strategy than a roller coaster ride.
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