Battling from Trenches, Still No Clear Winner

Welcome back, I hope you all had a good week in the markets and otherwise too. You’re probably wondering why this title? Well, looking at the market action in the past five weeks, it felt like the trench warfare of World War 1.  You have the bulls sitting in their trenches and you have the bears sitting in their trenches, every time one of the two makes an advance the other beats them back and back they go into their trenches and wait. They wait for their opportunity and some signals that the odds are firmly in their favour, but that hasn’t happened, yet. Interestingly, between the closing of the last 5 trading sessions, the Nifty actually moved 5 points!  So, if you feel a little impatient and wonder why things aren’t going in your direction, spare a thought for those investors that spent months, if not years in a flat, directionless market. The investing game is one of patience and it rewards those that practice it.  Also speaking of World War 1, between the trenches lay no man’s land and the range between 15,500 and 15,900 for the Nifty, a narrow band of 3 per cent is where lies our current day no man’s land as well.  

In the last week, the IT giants started declaring their results and they have been fairly positive. Market expectations were slightly higher but they haven’t punished or rewarded the declaring companies. As we move into the week ahead, more and more old economy stocks will start declaring results as well and it will be interesting to see what happens when those numbers start to roll out. Let’s not forget that the second wave of Covid-19 did affect a lot of companies over a six-week period.  

You may be thinking, what are my plans for the week ahead? Well, nothing has changed in the markets, and just like all the bulls and the bears, I’m sitting in my trench as well and waiting for an opportunity and some direction. On average, I’ve had about 40 per cent of my corpus sitting in cash and been deploying some money when I see an opportunity. The medium-term to the long-term portfolio is untouched and forgotten, will take an analogy of one of my stock market trainers from a few years ago.  He asked me to set up my portfolio like a soccer team. The goal keeper and the defenders are your safe plays and will rarely be substituted, in the midfield, one can be slightly more aggressive but still warrant little or no substitutions, it’s the forwards where you can be a little more aggressive and move in and out based on the opportunities that you see. So that has pretty much been my mantra too. Also, as I mentioned a few weeks ago, it’s been a flight to quality for me and I’ve only been picking the best of the best in their respective sectors. 

My thoughts on the week ahead, still leaning on the pharmaceutical sector and waiting to make its move, metal stocks, look good to move as well, just need the Indian Rupee to strengthen a little. All the headlines are still focused on the primary market and all the mega Initial Public Offerings (IPOs) that continue to come in. A big shout out to one of my early supporters, Sanjeev Bikhchandani on the successful subscription of the mega Zomato offers as well. Bikhchandani continues to champion the cause of Indian startups and has definitely been one of the calmest, down-earth, and grounded people I’ve ever met.  The value that he has created for shareholders, promoters, and employees, truly has been fantastic, and am sure the current successes will only further push him to do more. 

You all have a great week ahead, stay safe, stay well and keep peeking out of those trenches and when you get an opportunity, take it.  

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