I have a mazed myself with the accuracy with which I can predict the markets. I must also admit that I do not trust myself at all with my predictions, so I do not use it much. And since it is not of much use to me, I happily share it.

CAVEAT: THIS is my view as on 1st April, 2020, and no it is not an April fool post. However every equity post should be read like an April fool post. If a guy is really so good why the hell would he be running blogs? would he not be managing a multi billion US $ portfolio like Buffett or Munger? To each his own, I guess. Luckily I manage only my money, and I help a few people (that’s shrinking) find asset managers. Others I point a finger towards an index fund or an investment professional who is normally better than me. Or so I hope. Needless to say the following shares could be in my Long only portfolio or in my Covered call and Puts portfolio. Or it maybe completely absent. Don’t guess go to a professional. No. Not me. I am not a professional.

I know predicting is difficult, especially if it is about the future. About the past I am normally very good – I remember the past as EXACTLY as I wish it had happened.

March 2020 ended very badly and the indices were down by 24%. Sadly, this is present continuous and I am not writing this in 2040 to conclude and say “after this the market went up”. Honestly none of us know whether the fall is over. However if you are an IFA you have to believe that the worst is over and ask the client to invest. Afterall you have to gather assets, do you not?

My view: the Leader in the next rally will be ?? – I don’t know, but it will not be finance. When a sector falls from grace – “all the kings men and all the King’s horses may not be able to put it together again”. So BFSI I will not be too keen to add to my existing misery, I will not add more. I am happy to have sold brokerage houses, life insurance company, bank, and a couple of Nbfc. Sad that i did not sell enough – could have thrown the kitchen sink. I did not. Mistake.

I hated and then fell in love with PSU. Hate was when I did the audit and saw the corruption. (1983/4). Love happened in 1991 when Ashwin Mehta convinced me that there was money to be made in underpriced IPO. Ayn Rand prevailed and I sold Psu again. Then I realized that “risk” is at a particular price, not randomly. Today I see more risk in HUL and Gillette (in my portfolio) than I see in IOC, Gail, Ongc, Hpcl, Bpcl – I see a lot of value and decent dividends. Sadly again not willing to throw the kitchen sink on such a portolio of infra, psu, and value adding companies like Power utilities. So I added them, not sure if you will lynch me in 2025 like some friends who bought Tata Motor DVR with me at 90, then watched it go to 300…and we were sitting playing the violin. Losing friend’s money is worse than losing your own money -even if it is a drop in his personal ocean.

Pharma – another lovely industry where I understand nothing. So I just pick up Sun, Biocon, Lupin, Cadilla, Cipla, Dr. Reddy Lab. For buying Reddy I have to give up my Hyderabad bias, but I will do it.

I expect hotels and airlines to be badly hit – so out of hotels anyway, but will hold on to Indigo. I have lotsa FMCG, but not happy with the valuation. Will accept poor returns in this stupid over-priced sector, but not selling it with a hope of buying it back.

I already have banks, Nbfc, etc. – I will hold on with a belief that one day quality will prevail. Till then I will bide my time. I did sell some on the way up..and some as soon as the Yes Bank shit and Corona shit hit the market. Here I used the Taleb principle of “panicking early” so in retrospect my BFSI sale looks good. Touch wood. Like I said I wish I had sold more aggressively.

Unlike fund managers leverage does not scare me – with falling interest rates leverage is not my worry. The worry is I am not able to predict the speed of recovery. So a Maruti is a good buy at 3800, but at 4300 I am afraid that I may lose patience waiting for the recovery. However, if you do not have India’s top car company – by market cap and market share, I do think it should be in your portfolio. However you should be asking – will an Indian create a Tesla? However its too early to wish Maruti Suzuki away from your portfolio. Will it reach its old glory? Not sure, but I do have many auto ancillaries – and not willing to write them off.

In the Infra space I do not like Larsen & Toubro, but not willing to get rid of it completely, so hanging on to that. However I like Siemens, but not Bhel. I like Cummins at this price as well as many small consumable companies which will benefit from an auto or infra revival. I am sure you know which companies do you not?

I like some commodity companies like JSW, Vedanta, Eid Parry, Coromandel International, in which I trade frequently. Enjoy the volatility. I do not know how to enjoy the volatility in FMCG – so I keep them in my core portfolio.

Am I missing something? Well I have some small money in the US markets, Europe, and Asia ex Japan (including China). This is not significant, but its there.

Another Caveat – I am an investor having fun in the market. My cash and cash equivalents can pay for my household expenses till 2030 at the least. I am not sure how much of volatility you can take. In 1992/3 I saw my portfolio halve and income fall by 90% (yes, you read it right) – that is what happens when you are a broker.

And If I change my mind, I am not going to call you and say “hey I actually went double short on Maruti because I spoke to the dealer’s association”. Believe me, Inside information is completely useless. Vendors tell you the bitter truth.

Anyway I know who are the good research people, I am too lazy to do it myself.