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MONTHLY UPDATE JULY 2022

The month of July was an extraordinary month for the stock markets where markets climbed the wall of worry and had the best month of 2022. The Nifty moved up by 8.7% and the mid cap indices rallied by a massive 12% . This was despite little respite on the macro concerns plaguing the markets this year. After this move the Indian Markets are almost flat for 2022 while most global markets are down 12-15% if not more.

The results season has been very well taken by the markets despite an overall weak season for most large companies. Technology stocks which have mostly reported saw significant margin pressures and underperformance of earnings expectations. Margins of many consumer companies were under pressure, banks in general outperformed expectations in terms of asset quality and growth which led to the banks outperforming the markets this month. Some companies like Asian Paints surprised on growth and profits while others like Nestle saw severe margin pressure in the FMCG side of the business. Reopening trade companies like restaurants, multiplexes etc reported good numbers while cement companies saw margin pressures. Commodity companies saw severe profit pressures while automobile companies had a mixed bag with outlook improving. Overall at this stage nifty earnings have been downgraded by around 4-5% this month for this year however markets moved on the opposite side. Infrastructure and Capital good companies reported good results and order bookings

On the macro side the global central banks continued to talk hawkish and most rate hikes were either in line with or above expectations. There is a peak inflation argument floating around for bullishness in the markets which is somewhat fallacious in my view. In most developed economies inflation is running way above targets. For example in the USA the targeted inflation level is 2% and actual inflation is running at 9%, same is the case in Europe. What this will do is that it will make these central bankers not only increase rates further but hold them higher for a longer time. This is something that most people are not fathoming at this stage and is the risk to the markets. The second point is that from September the US Federal Reserve will cut their balance sheet by nearly $ 100 billion per month. This kind of balance sheet reduction combined with increasing policy rates has never been seen in the past and its impact on valuations of risky assets needs to be seen.

The Indian scenario is relatively better as inflation at 7-8% is above the target zone but not as hugely as in developed markets. The continued increase in trade deficit month on month and declining forex reserves is something that needs to be tracked properly. The rupee has been relatively stable as compared to other emerging market currencies. While this helps inflation it also makes our exports less competitive when other currencies are falling much more. The RBI also has been defending the rupee and pushing out huge part of the forex reserves in doing that. Reserves are down nearly $ 70 billion from the peak. This is not a good strategy in my view. Lets see their stance going forward.

One good part is that ex of crude oil all other commodities seem to be clearly topping out and some have also seen deep corrections driven both by slowing economy concerns as well as central bank actions. The imposition of export duty on Steel also has led to a nearly 25% in decline in steel prices from the top. Most industrial metals are near 52 week lows. The bugbear continues to be crude oil where, as I write brent is back near $ 110. While this will hit commodity stock earnings substantially negatively it benefits three industries specifically.

Automobile companies benefit due to this, they had been suffering over the last two years due to continuously increasing input costs, chip shortages and various shutdowns related to the pandemic. All of this seems to be getting behind now. The small negative is the impact of higher interest rates on demand which will need to be tracked. However overall stocks are underowned and hold potential.

Capital Good companies that have strong orderbooks and operate on a fixed price basis have suffered similarly. The investment cycle has started now and should last atleast three years. Here again input costs coming down will boost margins significantly. There are some companies focussed on railways businesses which could do very well

Reopening trades like Hotels, eating out, multiplexes have everything going for them now. People might be cutting down on other expenses but not on these. I believe these stocks will do very well over 2-3 years.

The best thing for equity markets will be that central banks gain credibility in their inflation fight and inflation peaks out and starts moving down. That will provide better opportunities to invest.

Indian Markets also trade at nearly 120% of GDP largely due to rapid gains in loss making company valuations or those with very low earnings. Markets are also almost flat for this year now while most other markets are down 12-20%. Valuations are 20% above long term valuations.

From current levels of 17200 it is tough to build a case for an overall market upmove. However stability and lower volatility will give lot of opportunities in the right sectors.

ASKSANDIPSABHARWAL.COM PRODUCT PERFORMANCES

The month of July was a very good one for us across the board except for the trading plans which took a back seat of sorts. Typically in one side trending markets in a very short period of time we tend to underperform in trading. However a muted underperformance after very strong outperformance helps the overall cause.

POWER ALPHA STOCKS

Power Alpha stocks came back this month with strong profit bookings after a lull. This followed the profit booking trend of last month and the current month rally also helped us exit some relatively longer held calls. Now this product is well set for the future. Overall profits were over Rs 50000 in Power Alpha after a long time. Our best alpha generating product over several years had a tough year till May. Our aim is to provide good ROI to investors with us and all subscribers to this product got their subscriptions adjusted beginning of the year so that they recover their fees and make money. The high ROI of this product has continued over the last many years and I believe that the current phase is an aberration. Overall profits were over Rs 400000 for the last two calendar years a very high ROI. on a Rs 6-8 Lakhs peak capital and Rs 6 lakhs average capital deployed. Overall opportunities will be good for this product even in the future and we will see to capture them. This is an ideal product for those who want to keep the capital as it is and book regular profits so as to make reasonably higher returns over fixed deposits/Hybrid Products etc. As markets stabilize momentum plays work well.

TARGET MIDCAP PORTFOLIO

The TARGET MIDCAP PORTFOLIO had an excellent month following a phase of very strong performance. The portfolio was up 9.67% and despite that we underperformed the midcap index which was up around 12%. However that was only this month as we have hugely outperformed over the long term.

With this build up our outperformance over the indices, all midcap mutual fund scheme as well as all PMS Products has gone up further. The magnitude of our performance over other products is now huge. The portfolio now up 21% from 31st of December as against negative returns of 2% for the Midcap Index as well as most Midcap Mutual Funds as well as PMS Products which are down 0-10%.

The portfolio is up a huge 38.5% over a 12 month period as against a return of 6.5% for the Midcap Index and 8.8% for the Nifty. The performance of this plan has been much beyond my expectations. The portfolio is now up 180% since inception and we hope to continue to do well going forward. Our value with growth strategy is working well.

TARGET BLUECHIP PORTFOLIO

The Target Bluechip Portfolio had a very good month with the portfolio was up 7.5% despite our cash position which typically pulls performance down in a one sided upward moving market. Despite that our returns were just marginally below the Nifty upmove of 8.73%. From the beginning of 2022 the portfolio is up around 7% against a decline for the Nifty.

The aim is to outperform by 5% every year to deliver strong long term returns and I believe we are on track for that. This is an excellent product for those who are looking for steady returns with low volatility. One year returns of the portfolio are 17% much above Nifty returns of 8.8% for the last 12 months. We have beaten all PMS/Largecap funds by a huge margin. The since inception returns are over 140% giving a CAGR of over 28%.


PLATINUM PLAN

The Platinum Plan is our oldest Long Term Portfolio plan had a very good month as small caps bounced back along with the rise in largecaps. The portfolio was up 10.67% during the month. With the performance over the year and for the last one year the PLATINUM PLAN has beaten all Flexicap and Multicap schemes which are all with negative to somewhat positive returns. We have maintained some cash to capture opportunities going forward. The since inception returns are now 462% with a CAGR of returns of over 29%. The portfolio has a good mix of largecaps and smaller midcaps which have good potential over the long run. The portfolio performance should pick up going forward. This is an ideal medium risk portfolio.


ONLY FOR TRADERS

Only for traders had an average month where some missed opportunities took the plan into a loss instead of profits. The performance of the product is running very well over the last many months. We will get 3-5 very good months in a year 3-5 average months and 3-5 not very good months. The ROI of this product is running very high at this point of time with returns for the first half absolute at 40%. The low risk strategy is playing well and such high returns in a bear market are tough and very satisfactory. One lot profits are running at around Rs 2 Lakhs for 2022 which is a very high ROI.

POSITIONAL TRADING CALLS

Positional Trading Calls had a muted month with just one recommendation closing with a small loss. The plan has been doing very well for the last many months and short periods of underperformance are expected and will happen. The good thing in trading is that a period of 2-3 months of good performance can make up for a few subdued months which this product has displayed over time. This has been one of our best products in the past. We hope to continue to do well going forward and this is an ideal trading product for those looking for lesser calls with bigger targets in a month. The ROI of this plan is running above 40% absolute for this year already. One lot profits are running at around Rs 2 Lakhs for 2022 which is a very high ROI.

WINNERS PLAN

Small and smaller sized midcaps started slow last year and built on gains. The same is likely this year. The first few months overall have seen decline in small caps but some of our stocks have done well and came back strongly over the last month. There will be opportunities going forward. We booked one recommendation with strong profits during June. Many of our recommendations have become multibaggers and we have booked profits in some of them last year. We recommended two new stocks over the last two months. The current year is one where timing entries will be important and that is what we will try to guide new investors to do. Small caps have a tendency to underperform for long periods of time and then give sudden gains. This is unlikely to change.


UNLOCK GAINS PORTFOLIO

Unlock gains got fully deployed in April and after that many of the holdings got hit by volatility. However the portfolio has come back very strongly now and is in the green . In the last one month as results started to come out the portfolio did exceptionally well with many of out holdings moving up sharply. We expect all stocks are well placed to outperform over the next two years. Will write more on this product later while clients in this plan will get the updates. It’s a fixed term two year product which should do well during this time period.

For more details write to us at info@asksandipsabharwal.com . You can also call us up at 7303163931/022-66666931 or visit www.asksandipsabharwal.com

INVESTMENT ADVISORY SERVICES
HNI SERVICES


Minimum capital requirement Rs 2 Crores. Fees are based on percentage of Total Assets under advisory with a minimum fee requirement of Rs 540000 plus GST.

HNI Services under the Investment Advisory segment are specifically designed for clients who desire to have a 360 degree coverage of their entire investment basket. Clients will be advised allocations to different asset classes with specific allocations to individual equity strategies in this customized offering vary according to client needs.

Different clients have different needs For clients only focussed on the Long Term the investment portfolio is different and for those who want a combination of strategies it is different. We have clients with different requirements and all are dealt with separately. Some key aspects are as follows.

The Wealth Management customized offering is something that I do for HNI Clients. These services are customized to the needs to the client and some of the key features include asset allocation and subsequently different strategies in the equity markets as per the equity market allocation

  1. The portfolio and services will be customized to the particular client. The strategies could be

    a. Only Long Term
    b. Only Short Term
    c. A combination of Long Term, Short Term and Trading

  2. The service will be interactive where the client can interact with me directly to clarify doubts if any. This can be in the form of Phone calls/messages etc. HNI clients interact bypass the office to be in touch with me. This is not available in the other packages.

  3. HNI clients can ask for clarifications on any stocks and assets across the investment horizon. This helps in eliminating investment mistakes.

  4. The portfolio is individually monitored and the client only has the responsibility of mailing the portfolio to us every 15 days or trading positions more frequently so that we can go through it and advise on the portfolio on a proactive basis.

    a. Besides this the HNI clients will continue to get all the Long Term Calls as well as the standardized MODEL PORTFOLIOs under our Research Analyst services.

    b. These MODEL PORTFOLIO’s have allocations to individual stocks along with regular updates

    c. LONG TERM Investment calls from the small cap universe

  5. Specific long term allocations with percentage allocations will be specifically provided to HNI Clients

  6. Swing Trading Ideas. Short Term Cash calls with holding horizon of 30-90 days and return target of 5-15% will also be provided to you. A part of the portfolio can be allocated to these calls depending on my analysis of how your money needs to be exactly managed. This has done exceptionally well for us over the last few months and years.

  7. Trading Calls from the Futures and Options universe whenever conviction is high will be given to you. Here the typical holding horizon is from a few days to couple of weeks In case you are uncomfortable with trading in futures we can remove this service for you. A small fund allocation to trading has worked very well for our HNI clients. However many clients, especially those overseas might find it tough to operate these calls. Moreover these are very time specific. Ideally for your kind of profile you might not want to take these particular calls

  8. All your other financial investments i.e. Mutual Funds, FD’S, PMS Products etc will be reviewed by me and recommendations on the same will be given to you. These will then be monitored for changes as required so that the allocation runs effectively and optimally.


In a nutshell the HNI portfolio and services are where each clients portfolio is tracked by me directly and individually depending on the need of the clients. For conservative clients we might have a different portfolio allocation strategy and for aggressive clients we will strategize it differently. The client can clarify any newsflow they hear from the markets so as to avoid investment mistakes

 

Those interested in HNI Services or COMBO PLANS can write to us at info@asksandipsabharwal.com or

Call us on +91-22-66666931, 7303163931

INVESTMENT ADVISORY PLANS

LONG TERM PLANS

TARGET BLUECHIP PORTFOLIO - A focussed BLUECHIP STOCKS portfolio that will invest in 9 identified large cap blue chip stocks.

Rs 27000 plus GST


TARGET MIDCAP PORTFOLIO- A focussed MIDCAP STOCKS portfolio which will invest in 9 identified High Quality Midcap Stocks.

Rs 29000 plus GST

PLATINUM PLAN- Model Portfolio based advise along with potential high growth stock recommendations A Multicap portfolio with a mix of Large and Mid Caps.

Rs 31000 + GST


For more details click the MEMBERSHIP TAB



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ONLY FOR TRADERS -Stock Advisory Package which has been designed only for traders in the stock markets. An active plan . 2 Calls per week with average holding period of 1-10 days

Quarterly Rs 24000+ GST, Semi-Annual Rs 37000+ GST, Annual Rs 53000+ GST

POSITIONAL TRADING CALLS This is a POSITIONAL TRADING product with calls given in the Futures & Options segment. A low involvement product for all stock market participants. 2-3 Calls per month with average holding period of 1-4 weeks

Semi-Annual Rs 36000 + GST, ANNUAL- Rs 54000 + GST

WINNERS PLAN- Annual advisory package which will include 5-10 strong long term return where the return targets will be higher than market returns over Long Term Holding.

Rs 26000 plus GST

SHORT TERM PLAN

POWER ALPHA - Stock Advisory package that is specifically designed to cater to investors who want to take short term exposures into the stock markets but do not want to trade in the Futures & Options market.

Semi Annual Rs 29500+ GST, Annual Rs 44000+ GST

For more details click the MEMBERSHIP TAB on the top of the page
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Investment Advisor Registration No INA000000425  Research Analyst Registration No INH000008109