Is your portfolio outperforming? If not here is what to do

Nifty has been in a broad trading range as we have been predicting. Nifty though longer term we remain bullish for targets of 20400 and even 23856 however in the near term we see 18300-16400 spot Nifty levels as a broad trading range. Having said that it does not mean that curated portfolios are not making money or that there is any dearth of opportunities. Actually, curated portfolios are making good money even in this current market scenario.


So what are the best stocks to buy now?

The first part of this is what sectors and stocks to avoid. We have been saying this for the past 6 months now to avoid stocks from manufacturing sector and the reason is higher input cost of raw materials. So stocks from FMCG like Nestle India, Dabur even the great HUL will keep facing margin pressure due to higher input cost on raw materials. Further, competition from brands like Dmart, Amazon are providing huge discounts for parallel products. I will discuss more on this in the coming updates.


This problem also applies to Auto's and OEM's where higher raw material cost will put pressure on margins and higher fuel prices will put pressure on demand outlook. Also, I personally believe that EV's are the future and even the likes of Bajaj Auto, Hero mot, Maruti have been lagging the market while new entrants like Ola electric have started giving the incumbents a run for their money (still early days but yes first mover advantage is lost).


The problem for legacy auto makes is that all their USP's of internal combustion engine will end their grip on the market share. for e.g. EV's don't need a service network So just to give you another e.g. a phone manufacturer like Apple will also be making cars soon so this sector now will see massive competition from new players who would never would have been there a few years back. So in a nutshell whenever there is extreme competition margins take a hit and in many cases loss of market share also has been seen historically hence I would avoid these sectors for now


So which are the best stocks to invest?

We like the EV theme, Inflation theme, defense theme and even the banking and services theme. While I would not be getting into discussing our portfolio in totality but let us take a e.g. of Icici bank which came out with numbers yesterday. Numbers beat the street, charts look great from longer term perspective and there is no issue of raw material cost pressures so look at such stocks for the near future where margins will more or less remain intact and also fits into our broader theme of stock


Our performance till now I am attaching a snapshot below I looks looks like how is it possible but yes we did it and we are humbled to inform you that YTD we have been the best performing portfolio across categories.

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Best performing portfolio YTD
Best stocks to buy

As usual if you are only trading/investing on the basis of this post please use your own risk management and then only trade/invest. Please do not over trade and always keep your risk in check.


Good trading and investing to you.

Regards,

Glen Drago


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