Views on Life & on Equity Investing

Wonder, Wealth & Abundance

Sensex Blues

with 17 comments

Sensex has fallen only 10% but Financial stocks that I have been overweight have fallen anywhere between 30-50%, consequently my Indian portfolio has been down 30% from its highs.

Pendulum may be finally swinging in the depressed direction, but financial stocks are not going to recover in a hurry, not in the next 2-3 months at least.

I find the BSE SME market attractive, it has ~150 companies listed and a couple of attractive companies.

The great has been trolled with the average and the likely stocks to recover first will be Bharat Financial and Repco Home (currently not invested in either). New investors may say ‘I told you so’ with financial stocks, but I feel the money is mainly in this sector other than Pharma/Chemical/Consumer brands to be made. Manappuram for example which I started buying from 42 Rs in 2012 when from 22-105-60 within a 52 week period. Short term is hard to predict, who knows, it could go back to 30 Rs, but Long term, I believe it can be 300-500 Rs in 4-6 years, all going well. You have to diversify with financials and can’t afford a proverbial 3 stock Munger portfolio.

So, at this point like the Hospitals, Housing Finance companies (except PNB Housing ‘recency effect’), and unique micro / nano caps.

Good luck for 2017!

Cheers

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Written by amitdipsite

December 21, 2016 at 6:20 am

Posted in Uncategorized

17 Responses

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  1. Thanks for sharing your views on Financials and wish you the very best for the new year.

    As a new investor, I am curious how do you deal with 30% drawdowns? Is it not emotionally challenging? Whats your framework to look at these sort of things?

    Abhishek

    December 21, 2016 at 6:49 am

    • One has to pay this price to be in the markets. Even Berkshire has been down 50% twice. Goal is to survive. So, one can make from 1 to 5 and then lose a lot to get back to 2. Goal is to make higher lows and higher highs. It challenging and investing is not a group activity, its a lone wolf game better suited for socially isolated people.

      amitdipsite

      December 21, 2016 at 7:00 am

      • Well Said Amit,
        I agree with Manappurnam fianance. I think market is lumping Recltd, pfs and pfc is same category as other nbfc’s which it is not so it might be missing a trick here? Good luck and Happy investing in 2017.

        SP

        December 21, 2016 at 12:14 pm

      • Great perspective thanks

        Abhishek

        December 21, 2016 at 6:42 pm

  2. Hello Amit,
    Can i have your email id.

    Brijesh

    December 21, 2016 at 10:34 am

  3. Amit, all the best for 2017.. Hope you have wonderful year ahead.

    Eternal Seeker

    December 21, 2016 at 9:30 pm

  4. Many thanks for your sage perspective.

    Isnt this fall for NBFCs and other stocks a temporary blip & situation bound to improve with increased remonetization & use of digital mode? By Jan Feb currency situation will be almost back to 8 Nov days as all 4 Govt presses working 24 hours a day in 3 shifts now printing mostly 500 rs notes since 15 Dec.

    Whats your take on MFI sector?is MFI sector going to be permanently close down?Is the govt intervention by Maharashtra govt such a serious threat?

    Vivek Gautam

    December 22, 2016 at 4:03 am

    • Dear Vivek,

      All of them will survive but I am not willing to lose another 20-30% so not sure if we have found the bottom, when in doubt keep out.

      In larger scheme of things on a 10 year chart it will look like a blip or hump. MFI is more risky than Gold loan or housing loan. But sector is here to stay.

      All the best

      amitdipsite

      December 22, 2016 at 4:17 am

  5. I recently came across your blog . All your writings on stocks and Vedas are intellectually stimulating. I would like to know your view on shriram transport and bajaj finance.

    Deepen Thakkar

    December 22, 2016 at 9:19 am

  6. You talked about SME listings and few being attractive. Which ones do you like. Can you share your thoughts. Many of them are not able to migrate to the main board and hence liquidity is an issue.
    Seasons Greetings to you!!!!

    GB

    December 22, 2016 at 9:44 am

  7. Hi Amit,

    Belated Christmas and Good luck for happy new year!

    I was wondering what’s your opinion about the peer to peer lending such as harmoney.co.nz or lendingCrowd.co.nz as an investment vehicle. Not sure if you ever got an opportunity to review that.

    Disclaimer: i have been investing less than 5% of my monthly income in that slowly over last few months. It shows annualized return close to 15%.

    Regards,
    Abhilesh

    abhims2

    December 26, 2016 at 11:59 pm

    • Hello Abhilesh,

      Peer to peer lending has a future. Good diversification across lenders is the key. 10-12% looks possible but 15% returns to you, plus margin of the platform means the credit profile of borrower may be poor

      All the best

      amitdipsite

      December 27, 2016 at 1:48 am

      • Good to know Amit! thanks for your to the point and awesome response!

        abhims2

        December 27, 2016 at 1:50 am

  8. Hi Amit, saw ur name in Majestic research block deal, how do u feel about that company being the only listed MR company and having high profile mgmt. Seems to be growing pretty fast, only issue seems to be high debtor days.

    darsh1985

    December 28, 2016 at 4:18 am

    • Debtor Days are the reason MRSS came out with FPO at 114 (IPO at 13 Rs in 2015 July), 10 bags.

      Most Debtors are less than 6 months old.

      Small volatile stock.

      Not as risky as a finance / banking company with leverage though.

      Top tier clientele.

      Biased, as invested.

      amitdipsite

      December 28, 2016 at 10:53 am

  9. Hi Amit,your writings on indian equities are great, i am regular visiter to your blog. I wish you a peaceful year

    HARISH ASSUDANI

    December 31, 2016 at 11:49 am


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