May 2015

First year of New Government

Reference : Blog – “Are we in a structural bull market?” dated June 25, 2014
(http://investmentstrategyindia.blogspot.in/ )

In our earlier blog we had mentioned of our strong belief that we are far from a structural bull market. In the last one year of the new government - contrary to everyone’s popular belief - most of the cyclical stocks have made new lows. PSU banks, infrastructure, real estate, oil & gas, commodities and most of the debt laden companies have fallen by 30-80%. We have clearly stayed away from these sectors and have immensely benefitted from this positioning.

We have delivered an average of 70% absolute return which was 50% above benchmark and 39% above average mutual fund return. This was the strongest year of our performance. The market is again focusing on quality companies whereas weak companies are falling off the radar of most of the institutional investors. The current correction is helping the market to create a strong base for the next up move. Our intention is to use this weak phase to realign our portfolios to take advantage of the next big move.

Regards,

Vinod Jain