SANDIP SABHARWAL

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MONTHLY UPDATE SEPTEMBER 2021

This was another exceptional month for our products across categories of Long Term Investing AND Short Term Investing, Trading plans had a subdued month driven by my cautious outlook on the markets because of which we unfortunately could not make money even in some of the good trades that we took. Before going on to product specific comments let me write on the month that was, and the outlook from here.

Indian markets have largely defied global market movements, inflationary concerns as well as the sharp rally in the US Dollar which has created volatility in many emerging markets.

The current month was another extraordinary one for the Indian Markets with the markets rallying further largely driven by retail investor flows. Globally markets were mixed with most markets showing selloffs and then bounce backs. The weeks started off with huge concerns around the Evergrande Crisis in China which was touted as a “Lehman Moment” for China and the US Fed Policy announcement and ended with investors and traders largely discounting these news flows.

The US Fed Policy was clearly more hawkish than expected with indications that the bond buying will be wound up very fast over the next 6-8 weeks and might be followed up quicky by interest rate hikes. It is very clear that inflation is not “Transitory” as has been touted by most central banks.

The Evergrande Crisis is very tough to evaluate as is everything else that happens in China. In my view it cannot be correlated with Lehman unless there is some fraud and diversion of money.

Direct tax data is moving well which is good from the standpoint of government spending which has been subdued this year. Overall the Covid wave also seems to be stabilizing with no new variant coming up for months now. It now seems that with the huge growth in vaccination numbers combined with no new variant we might be able to avoid a new wave of Covid. However its clearly unpredictable and we need to keep our fingers crossed.

The biggest concern continues to be inflation and the impact that will have on consumer demand.

In the meantime the NIFTY reached near 18000 and the Sensex hit 60000 levels this week. The move in the Indian Markets has been incredible with a complete lack of correlation of India with world or emerging markets. Markets look very frothy with retail traders believing the markets cannot correct. Valuations are now the highest since the year 2007 and Market Capitalization to GDP has crossed 135%. As such near term risk reward has become even more unfavorable than what it was at the beginning of the month. Bull Market sell offs come suddenly and are deep and sharp and take out the weak hands. It makes sense to generate and hold cash in a strong market to buy in when markets sell off and everyone tries to push the exit button.

One interesting factor that came out of various management commentaries has been that most companies are looking to do significant capital expenditure. This should now after more than a decade lead to a new private sector Capex Cycle. This will create opportunities in some underowned capital good and infrastructure stocks. This is a good opportunity space in the current elevated markets.

ASKSANDIPSABHARWAL RESEARCH PLANS

Our performances were strong across the board with strong performances continuing in the long term and short term. However trading plans had a subdued month.

POWER ALPHA STOCKS

Power Alpha Stocks had another exceptional month where we could do 5 profit bookings of a total of Rs 93000. The good thing about this product is that the money comes back after profit booking and after times of strong profit booking and at elevated market levels we have the cash to redeploy. Overall opportunities will be good for this product as market volatility plays out and gives us opportunities to take more aggressive positions. The high ROI of this product continue, overall profits were around Rs 430000 for Calendar 2020 and are now at Rs 310000 for this year in the first 9 months 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. At peak capital the ROI was 56% and at Average capital 72% in 2020. Lets see if we can repeat 2020 again.

*Profit/Loss of open positions are reflected in the performance sheet after the position is closed out. Only completed trades are reflected in the performance sheets

ONLY FOR TRADERS

Only for Traders had a forgetful month with us getting whiplashed and not being able to make money on the calls which eventually went into good profits but after SL was hit. While the overall 2021 performance continues to be very strong. In the current month the product made a loss of around Rs 30000. 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. In my view the payoffs will be very high sometime in the next two months when the view plays out right.

*Profit/Loss of open positions are reflected in the performance sheet after the position is closed out. Only completed trades are reflected in the performance sheets

TARGET BLUECHIP PORTFOLIO

The Target Bluechip Portfolio had a strong month with returns of 4.44% while Nifty went up by 2.8%. We continue to maintain a good cash buffer which will hold us in good stead over the next two months if things move as I expect them to. We increased cash by booking profits in DLF. Since inception returns are nearly 120% from the time the portfolio started off more than two years back a substantial outperformance of 100% which is very tough in a large cap product. This is an ideal portfolio for low-risk investors. We have used the momentum of the markets to book profits and generate some cash which will be redeployed appropriately.

TARGET MIDCAP PORTFOLIO

Target Midcap had An excellent month with returns of 11.2 % for the month. Stock selection is working well. The returns for this year since beginning have now reached 55% and we have outperformed all competing products. Overall, the portfolio gave 44% returns for 2020 which is exceptional. Since inception returns from end of 2019 are now 124% much above the indices. This portfolio has huge potential with some stocks having the potential to be multibaggers over the next few years. This portfolio is all about a journey which will do good over 2-3 years. Average valuations of our portfolio is half the midcap index and that of most momentum midcap mutual funds and PMSes. This is an ideal portfolio for long term investors who are willing to take the risk of short term underperformance.

PLATINUM PLAN

The Platinum Plan is our oldest Long Term Portfolio plan and did exceptionally well during the month with returns of 5.54% . The YTD returns are now 42% and since inception returns are 440% with a CAGR of returns of over 26%. 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. We increased cash by booking profits this month. We used sharp upmoves in many stocks to book profits to redeploy later. This portfolio is a mix of Large Caps and Small Caps. This is an ideal medium risk portfolio.

WINNERS PLAN

Small and smaller sized midcaps started to outperform and this helped many of the holdings rally. The performance of our recommendations has been exceptional. Many of our recommendations have become multibaggers and we have booked profits in some of them. We generated many ideas over the last few months, some of which rallied, and some are still to perform in 2022. The current month was somewhat subdued for many small caps. Many of the recommended stocks do have deep value however many PMS fund managers and other investors burnt by small cap investing might not come back fast. We need to adapt accordingly. However, given high operating leverage small caps will do well in 2022

POSITIONAL TRADING CALLS

This is the only product of ours which has seen some challenges with good months getting juxtaposed by months where we have got stuck in some positions thus reducing overall profitability. This month we gave just one call of Hindalco Put Option which ended up losing Rs 20000. Markets going against the view of a correction is not working well for this product in the short run. I expect number of calls to move up going forward. We hope to come back strongly and match up the performance of the other products going forward.

*Profit/Loss of open positions are reflected in the performance sheet after the position is closed out. Only completed trades are reflected in the performance sheets

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