Dear Friends,
its been a long and unprecedented time. i hope you are well and continue to be. it is not only unfortunate that mankind lost many to the worst pandemic in our lives but like every obstacle, mankind has done its best to move ahead. not only did we find vaccines, we have become a more connected world and truly one that experienced one of the largest black swan events. while we are still going through its variants, the past two years have taught us a lot. we are more productive than before, technology has embraced every nook and corner and with some degree of optimism we are moving ahead.
one of my core learning from last year or two has been the ability of human to always want to resolve the toughest of problems. earlier these were either territorial like wars or calamities and now as we have become an interconnected world, more global and bigger in nature. whether it is science of medicines or human science to isolate , mask up and brave the odds and re accustom to work from home including odd hours, we are moving on.
It has been a very busy time for me. i have tried to better myself all across, although i may have succeeded in parts not all. on my legal and advisory front, from about to launch of my book at the highly prestigious Jaipur Literature Festival to ideating on product or business model innovations, i have tried to be a student in pursuit of knowledge and someone trying to bring new thoughts to advance the cause of clients.
as an investor, i have tried to help many of you not by tips but trying to explain rationality and objectivity. this has won me the love and awe of several hundred thousands of you. it is so gratifying when someone i don’t know or recognise sends me his greeting and appreciation.
i have also turned to writing lyrics with my joint initiative with nikhil sahni, also known as Dj NYK Hitting the charts on itunes, Ganna, savnn, wynk to name a few.
the point i am making here, more pertinent to your interest in investing, is to become a better investor, you need to widen your horizon as also the scope of things around you that may add gratification. winning is a habit and can be cultivated by a good mindset. for example if the last week odd brought down your portfolio and impacts you, for reasons not directly in your hand (market will always move up and down but always more up with time), any success accomplished on any aspect of your life will comfort you by telling you one good will add to another. it could be the improvement of health of yourself or your near ones or something you accomplished on the likes i wrote about. don’t forget life is many opportunities and victories over adversities. many of you have learnt that the worst fall of market in march 2020 which was a complete knock out of portfolios left you bruised but the months that followed not only cured the bruise but also empowered you to do even better.
We are in the midst of a global correction, partly for legitimate reasons. a whole new class of greedy assets with no cash streams at unprecedented valuation with the assumption of one way move in the midst of huge liquidity supply in usa and europe and japan has lured many get rich too soon stories. as india never falls behind including bad habits like junk food, too much spending on debt and buy now pay later schemes, some part of india too will bear more pain than others.
there are many positives to look at. our IT companies, big and small, are not sitting on illusionary cash flows. the deal intake is real as also is their scalability. as the primary catalyst of stock returns is profit and cash flows, we are in a good position to be insulated from a crash of the kind seen in some of our atrociously valued new ipos. do recall my interviews and tweets warning that some of these will crack as these are not IT companies or consumer companies with cash flows but huge cash burns fighting in a space that is disruptive but needs a control of greed. i do not say all of such cos are similarly situated and at same pice point may also become worthwhile but surely the way there was frenzy in chasing their ipo for listing gains has turned to be listing pain.
there is a lot of migration at play in india. in the energy space towards non conventional energy sources. i have personally played this with ethanol early but many opportunities are still around. similarly in the move towards EVs. in the move of old economy cash horses becoming more efficient in embracing technologies from cloud to AI to ERP to digital interface with clients. today cos that did traditional advertising with one size fits all can customise interactions with clients through social media. using AI and ML they are getting more efficient in eliminating time wastage amd resource wastage. new platforms are emerging some of which have shown remarkable resilience to attract more and more sometimes even out of their ordinary resources. Companies like CDSL, ICICI SEC, CAMS, IEX are role models of how technology combined with low base opportunity in a hugely populated country can be many years of game changers as long as regulatory hurdles don’t become a wall. the migration to digital has immensely benefited broking where the companies adapted to technology and examples include Zerodha, Icici, angel one to name a few.
We are seeing a co as colossal as reliance industries showing such a remarkable ability to change that it leaves a lot to learn beyond just investing.
india will embrace many new entrepreneurs and a contribution by the growing female population, which in effect will do a lot of good.
today icici bank delivered the most inspiring results to showcase when things change for good so will the results.
A lot of our new leadership can come from many aspects of change and agility.
chemical sector has showcased the power to adapt on china issues and textiles how one opportunity can cascade a whole new balance sheet. next could be manufacturing or innovation lead businesses with the ability to generate profits. or not to be too greedy.
so friends, while we will continue to see ups and downs in market, there is a greater sense in believing in the instruments of change and partaking in what makes economic sense rather than fad sense.
disclosure- the view expressed is personal. i am not a regd advisor. the stocks named are in context to the subject and not as an investment advise. i am not a believer in buy at any price or in buying fads or get rich overnight schemes. life is a path and it will include stones and obstacles as also beautiful flowers and good fellow followers.
this is only the first part of my update. more to follow soon. be safe and find your passion to lead you
I did not proof read this article nor do i revisit my flow to take away my natural thoughts. so do excuse any typos or mistakes.
