Transcript of Podcast:
Hi, its been a while since I released a podcast and for those of you who were following my podcasts regularly, my sincere apologies.
There is always lot of noise around your investments and the job of my team and me is to separate the noise from your investment and make your investments grow. How do we do that?
Today (by today I mean current events) is a good real time example of separating noise from investments. There is a whole lot of noise today, in India you have State Elections in Karnataka, which involves a lot of political mudslinging and could be an indicator for 2019 general elections. There are issues on bank scams, bank NPA’s, corporate health, inflation, monsoon, farmer distress and many other socio economic problems. Globally there is Trump Tweets, Oil prices, Fed rate hikes, Russian antics, trade wars, middle east unrest and other such issues. Markets are fluctuation around the noise and this is having a short term impact on your investments.
The noise is more on the corporate front. Globally issues of data privacy and security are gaining bandwidth. Smart phones are done and dusted is what the experts are saying. There is call for breaking up the Big Tech. Maverik entrepreneurs such as Elon Musk are being treated as Hollywood stars that are talked about by gossip columnists. Amazon is being seen as the Evil Juggernaut.
In India, there is noise on stock valuations, falling INR, rising bond yields, effect of Walmart buyout of Flipkart and other micro specific issues.
Let’s leave out the noise and look at the fundamentals that drive your investments. Corporate health globally is strong. Companies from Apple to Facebook and Amazon have reported strong numbers, implying that consumers, who are growing and spending more, are buying their products and services. Tesla, despite Model 3 production delays, is seeing more and more bookings for the car. Alibaba in a single day is selling more products than whole retail sector of many nations. As long as corporates continue to deliver growth, fundamentals are intact. Fundamentals change when corporate health weakens, implying demand is slowing down.
In India, results coming out so far show growth and optimism. Indians are travelling and spending as seen in air travel numbers, hotel occupancy rates, vehicle sales, consumer loan growth and retail sales growth both online and offline. Domestic demand is healthy and growing and this is positive for Indian manufacturers and service providers. Again, fundamentals are good and are not showing signs of deterioration.
Obviously there will be companies and sectors affected either by internal or external circumstances and such company fundamentals would deteriorate. Portfolios that have the right fundamentally good stocks would do well even if noise levels are high.
Our India 2024 portfolio, is designed to separate noise from fundamentals. Call Neelima at +919819770641 or email [email protected] for further details.