Portfolio changes
Continuing from yesterday ( see here ), I would like to share with readers what changes I have made or shall be making in due course, in preparation for the new market cycle. In my view— 1. This new market cycle shall see a correction in the consumer behavior. The growth in the household credit (personal loans or non-corporate finance) since the demonetization (November 2016) has been relatively very high. This has mostly supported discretionary consumption and financial investment, as we have not seen significant growth in real asset building (Real Estate, MSME Capacity Building etc.). The wealth destruction caused by sever correction in financial asset prices (both equity and debt), persistent illiquidity in the housing market, and stagnant to lower wages may diminish the borrowing capacities of households in short to midterm. The relative high valuations of most consumer discretionary and consumer financing stocks with relatively lower grow...