Welcome To myplexus.com
I always liked investing. Deferred gratification comes naturally to me and is quite indispensable in investing.
I started my journey as a sell-side analyst tracking the technology sector. I joined L&T Asset Management in 2012 after it acquired Fidelity’s India business. It had been almost four years since the GFC and equities were not a particularly exciting asset class. Most people were excited about real estate back then as high inflation favored that asset class and people were sitting on huge gains. It was a time when small and midcaps were completely ignored and you could find good companies at single digit PEs. Market leaders in a sector traded at a fraction of their sales and nobody would look at them. We were lucky to invest in a few of those ‘multibaggers’ and create good wealth for our unit holders over the next few years.
Charlie Munger had once remarked, "If Warren Buffett had gone into ballet, no one would have heard of him”. The two pieces of advice I can give young people are:
1) Figure out your own aptitudes, and
2) Play games where those aptitudes matter
These are the simplest ways to enjoy the game and be good at it.
Over the long term, I believe honesty and success go hand in hand. Unless you are honest with yourself and others I don’t think you can have the credibility to be successful.
I am an optimist and always believe that there will be better days ahead. Markets, however, follow their own pattern of euphoria and depression. The last 13 months have seen Midcap indices rise continuously without a meaningful correction. I believe there are pockets of froth and there are pockets of opportunities. Past experiences have taught us that one can find multibaggers even while indices look expensive.
Over the last year and a half, we have had a difficult situation that necessitated hard choices. We have seen two lockdowns in two years which could have second order effects especially at the bottom of the pyramid. However, history teaches us that human beings are extraordinarily resilient, so we will come out strongly.
On the positive front, vaccinations picking up pace could slow down a third wave, if we have one. I am positive on the exports front with the PLI incentives and labor arbitrage, India could become a manufacturing hub for select goods.
We have tried to build a process driven organization. Every fund follows its own mandate and chooses the best stocks from our coverage universe which adhere to the fund’s mandate.
We have a strategy of having a primary and co-fund manager for each of our schemes. Each of my schemes has a different mandate and hence has different portfolios. So that makes all the schemes interesting to me.
One scheme I want to talk about is the L&T Focused Equity Fund. The mandate is to hold less than 30 stocks and take a focused approach. We have chosen to differentiate this fund with its sector exposure. In a market where most of the top stocks today are banks, the fund has chosen not to have banking exposure. The core thesis is that after a prolonged period of market cap creation, every sector attracts excess competition which lowers the sector’s future RoEs. The fund gives a good diversification option for investors to participate in a multicap fund which has differentiated positioning.
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Disclaimer:The article (including market views expressed herein) is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. The article provides general information and comparisons made (if any) are only for illustration purposes. Investments in mutual funds and secondary markets inherently involve risks and recipients should consult their legal, tax and financial advisors before investing. Recipients of this document should understand that statements made herein regarding future prospects may not be realized. Recipients should also understand that any reference to the indices/ sectors/ securities/ schemes etc. in the article is only for illustration purpose and are NOT stock recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund (“the Fund”) or any of its associates. Any performance information shown refers to the past and should not be seen as an indication of future returns. The value of investments and any income from them can go down as well as up. The distribution of the article in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of the article are required to inform themselves about, and to observe, any such restrictions.