"We build statues out of snow, and weep to see them melt."
—Walter Scott (Scottish, 1771-1832)
Word
for the day
Blandishment (n)
Something, as an action or speech, that tends to flatter, coax, entice,
etc.: Our blandishments left him unmoved. E.g., We succumbed to the
blandishments of tropical living.
Malice
towards none
The day after the Newspapers
highlighted the speeches/comments made by PM, AK, CJI and Salman Khurshid.
This morning it's a new Sun.
First random thought this morning
We just celebrated 70th anniversary of our independence from the
colonial rule of the British. We witnessed the expression of nationalism and
patriotism in a variety of ways.
I joined a group of Punjabi farmers in Pilibhit for the celebrations.
Most of them or their parents had migrated from the west Punjab in 1947. After
the flag was hoisted, speeches were done and snacks were eaten, I raised a
tough question - "why did you chose to migrate to this side of the border?
Was it love for INDIA or fear of being persecuted?"
After two minutes of silence - all of them nodded for the latter!
I'm Ok. Thank you!
Since approval of the Constitutional Amendment Bill
that has paved the way for implementation of a common GST regime in the country
- a number of readers have asked me does
this transformative change warrants any change in investment strategy, as
highlighted at beginning of the current year (see here).
I had then mentioned that
"the forces of hope may get traction from the policy reset in India
becoming tangible. The investors’ sentiment at present is positive about the
cyclical recovery. Investor positioning and market internals are clearly pointing
towards that", while categorically stating that "I am not too excited
about a conventional cyclical recovery in 2016. Cost efficiencies, productivity
gains and ground breaking for some of the prominent FDI projects in
manufacturing area would create excitement in market. Staple consumption could
be supported by higher urban wages and normal rural income (assuming a normal
monsoon). Export demand may continue to remain sluggish." (see here)
I have reviewed my investment
strategy comprehensibly in this light and I see no reason to change my core
investment strategy due to GST for the simple reasons that—
(a) I follow a strategy which is designed to be mostly policy independent
and enjoys an optimum beta relative to macro economic growth;
(b) I had anticipated GST & other positive policy changes; higher
rural income & consumption due to normal monsoon; and rise in urban wages
etc.;
(c) Global competitiveness, technology, innovation and market
leadership have always been at the core of my investment strategy. I have
always avoided businesses that sustain purely on policy arbitrage and political
patronage. The small and midcap businesses that would find it hard to compete in
an open globally competitive market place with little policy arbitrage and
political patronage have been in a "No Go" zone for me for long. (see
here)
I continue to believe that the
investee companies will be such that have demonstrated capabilities to remain
relevant over many business cycles due to their product, market and technology
leadership, strong financial position, lower beta to macro fundamentals, proven
managerial capabilities.
I do savor the flavor of the
season, but just as I do a pinch of pickle with my staple moong dal khichdi -
not more, not less.
The movements in the market prices
of financials and IT/Pharma have created some imbalances in my portfolio. These
need to be corrected rather urgently.
I have therefore advanced my
midyear portfolio review for FY17 by a month. I shall be planning and
implementing the corrective measures by the end of this month itself.
No comments:
Post a Comment