Lets face it, we have no clue about the equity markets, at least about Indian equity markets. Many people think that because there was no great activity in 2015, markets have to be up in 2016. I do not agree with that logic. Let us look at what is happening at the ground level.

Many green shoots are visible –

  • many road and rail projects are being started off in a big way
  • the number of projects which were lying idle are being kick started and pushed along
  • Raghuram Rajan is pushing for the closure of this NPA culture started by the Congress
  • If political interference in banks go down, over a period of 10 years things will improve
  • Many people feel that Na Mo is not doing enough to move the economy along
  • Many people feel that Na Mo is doing a lot to push the economy along (reconcile these 2 points!!)
  • Mutual Fund collections are up, and booming. Equity SIPs are at an all time high
  • Banks are selling ULIPs and life insurance companies are very big investors
  • IPOs of equity shares like Indigo have done brilliantly and more than Rs. 20,000 crores have been raised
  • IPOs of debt by PSU bodies like NHAI have raised about Rs. 50,000 crores
  • BFSI recruitment, training, retraining, bonus, annual raises are all booming
  • Many of the old projects are being revived or being abandoned
  • Solar energy generation is making a rapid progress
  • Commodity prices continue to remain soft
  • Interest rates are in no hurry to come down
  • China will (is) slowing down and is showing no signs of going up.
  • Oil prices could keep dropping like other commodities
  • People dependent on commodities for their living are living on a day to day death call!!

Amidst all this noise you need to keep your sanity and portfolio intact….

Let me tell you what I am doing. I am seeing infra happening. I am seeing the Jan dhan scheme working. Clearly gas subsidy is almost gone – at least the non deserving people are not getting it. The kerosene subsidy is going.

I am happy with the green shoots. The China story does not bother me. I almost doubled my money in a share that I do not like – Mahindra Holiday resorts. Sold and China meltdown allowed me to buy it back about Rs. 59 less than the selling price. I am a buyer of NMDC at a yield of 6% p.a. I bought Ntpc at Rs. 116 because i liked the dividend yield. At 146 I am wondering what to do.

Clearly there is no one clear strategy. I have bought metals at what I think is the bottom of the cycle. I am undecided on Reliance Industries. I hold Hdfc Equity Mutual fund because he holds shares which I do not like at all -Sbi, Icici, Infosys, and LnT.

Yes I continue to have a 90% equity portfolio and sleep well at night.

 

 

 

 

 

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  1. What makes you think that yield of NMDC will remain same ?
    Earnings is getting impacted, so dividend outflow will not be the same. Unless the POI forces it to do, dividends will fall

  2. shivam I am NOT saying what you should do. I am saying what I am doing. This is not an advise or suggestion or a PMS. Please ignore what I say if you do not like it or accept it.

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