May 2014

POLITICAL STABILITY

May 16, 2014 will go down as a historical day in Indian politics. After a gap of 30 years we finally have a strong political mandate and a single party majority. We have consistently made new highs since the election result. This widespread rally can be seen across sectors and companies. May – 2014 was a big month for equity investors where the Sensex delivered 10% return.

We are strong believers in the logic that great companies grow in adverse market conditions and they grow even faster when conditions become favorable. Optimism amongst foreign and domestic investors will definitely reduce stress points in the economy and money will start moving to productive channels. On the basis of our belief and understanding we have not changed the positioning in any of our portfolios before and after the election result. Infact by doing so we have seen strong performance across our strategies.

The most obvious trade doing the rounds would lead us to believe that Infrastructure, PSU, Banking & Midcap will be the favored investment opportunities.  We are staying away from leveraged, weak management, poor capital allocator and loss making companies. As always we are taking a very different opinion on the market and trying to build our portfolio of companies which can deliver sustainable wealth for our investors across different market cycles.