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A BRILLIANT YEAR 2021

The year 2021 in many ways turned out to be different that what was expected during the beginning of the year where at the same time last year when Vaccines were being rolled out I had thought that at the same time this year Covid might be over. However as I write the Omicron wave is on big time and daily cases are at the highest ever. There was also an expectation that Gold should do well given the increasing inflationary pressures all around however gold ended absolutely flat for the year. Stock Markets did very well even after a brilliant pull back in 2020 which was much better than what I expected. Indian Markets have now risen every year for the last 6 years which is a record. 2021 saw markets rise 24%. Our advisory products across long term investing, short term investing and trading generated huge wealth for our investors this year with massive outperformance in long term products and huge profits in short term plans.

So in a nutshell I believe making forecasts for what will happen in 2022 is futile. We need to make our views on the overall markets, stocks and sectors and play them in a manner that we do well. Bond Yields are finally moving in line with the growing threat of prolonged higher inflation worldwide. The US Fed has indicated that they will start moving faster than earlier expectations and my guess is that other central banks will do the same once the Omicron wave subsides as inflationary pressures driven by higher food, commodity and as a result wage inflation are becoming more and more entrenched. This will create volatility but not end the bull market.

In my view we will see a return of Value Investing this year. Growth investing driven by new generation companies with no profits and valuations driven by huge liquidity flows will be challenged this year. I expect a very tough year for Cryptocurrencies as they have largely been liquidity driven. There are nearly 13000 coins that trade in the market now. I expect 12500 plus to go to zero over the next 1-2 years. There could also be 10-90% falls in most of the others. As this plays out this year could be that of Gold which has completely gone out of the investors radar at this stage.

Valuations worldwide are likely to get challenged as liquidity reduces with the Market Capitalization to GDP for most markets trading at all time highs. However the key is that the bull market will still go on for some more time. The reason is that till interest rates become restrictive for growth I do not see growth rates revival getting challenged. The US Fed Funds rate needs to go to near 2% for that which is not likely over the next 18-24 months. However there will be deep loss in value in sectors favored by Venture Capitalists and PE’s where valuations are far beyond reasonable. On the other hand there will also be winners from these sectors that will be extraordinary multibaggers over the next 5-10 years. We will need to capture them as reasonable values come.

The key threats to the performance of the Indian Markets are

  1. Higher inflation leading to higher interest rates which could impact the valuations especially in high priced Growth Stocks
  2. Potential liquidity withdrawal by global central banks which has been the primary reason for the valuations moving up and money flowing into high yielding Emerging Markets over the last two years
  3. Very high earnings growth estimates which creates potential for earnings misses which at elevated valuations can lead to deep market cuts
  4. A selloff in the rupee if RBI keeps interest rates low at a time when other central banks start tightening
  5. A global equity market selloff as last year saw over $ one trillion flow into equity assets which was more than the last 20 years combined. Even 10-20% of outflows can create lot of volatility in the Indian Markets
  6. If Covid doesn’t end with the current wave and there are more waves it will impact economic growth as well as bank asset qualities

Positive factors

  1. Fiscal Deficit of the government seems to be well in control thus creating potential for stimulus if required
  2. Most companies have announced large capital expenditure plans and the infrastructure pipeline also seems to be strong which could propel fixed asset creation
  3. The first phase of rate hikes by global central banks leads to downsides, however till rates become restrictive normally markets bounce back and that is the most probable cycle that we will see
  4. Central bank tightening could rein in commodity price spirals which could address one of the biggest concerns of inflation
  5. FDI flows are very strong and can contribute to economic growth prospects

In this context my overall view on the markets is that global markets including India will see a selloff in the first half of the year and then a bounce later as interest rates would still remain conductive for positive economic growth. The concern is only about valuations and near term froth and overvaluation. From the investors perspective we should see a comeback in value stocks this year versus growth stocks as the valuation differentials between the two are at all time highs. The bull case scenario is for a 12-15% market growth this year and the bear case is for a flat overall market with some volatility. However such markets tend to be very good for stock picking which should work well in 2022.

Now coming to product performances.

WINNERS PLAN

Winners Plan had an excellent 2021 with the average return of all open recommendations ending at 88% for this year which is a very strong performance. Our best performer from the Small Cap recommendations of this year was Everest Kanto Cylinders which moved up by nearly 900% since it was recommended 15 months back. There were several other strong performers. The key of small cap investing is that returns cannot be benchmarked. Since its purely bottoms up there will be times of huge underperformance and then periods of huge outperformance. The challenge for investors is to accept this as part of small cap investing. Many of our recommendations still have huge growth potential.

TARGET MIDCAP PORTFOLIO

The Target Midcap Portfolio built up its performance and increased the gap with all Midcap MF’s as well as PMS products. This was despite the fact that some of our reopening trades got sold out in December due to the Omicron wave. The year saw Target Midcap give returns of 59% and since inception returns are nearly 130% . We made a few changes during the year and on a risk return paradigm I believe we are much better placed than most Midcap Portfolios. This is an excellent product for investors willing to take some risk for high returns over the next 2-3 years. We outperformed big time in 2020 and it has continued in 2021

PORTFOLIO NIFTY NIFTY MIDCAP 100 Index
OVERALL 2020 44.36% 14.22% 21.80%
OVERALL 2021 59.45% 24.12% 43.54%
SINCE INCEPTION 130.20% 37.90% 74.80%

PLATINUM PLAN

Our oldest long term plan PLATINUM had another brilliant year 2021. The portfolio comprising Small Caps and Large Caps moved up by 44% this year and outperformed all Flexicap products in the market. 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. Since inception returns are now 450% plus much higher than benchmark returns and nearly 28% CAGR.

PORTFOLIO NIFTY
2014 86.00% 31.00%
2015 19.70% -4.10%
2016 6.80% 3.00%
2017 62.15% 28.63%
2018 -8.94% 3.18%
2019 0.44% 12.02%
2020 19.42% 14.90%
2021 44.00% 24.13%
OVERALL SINCE START 445.60% 175.30%
CAGR 28%

TARGET BLUECHIP PORTFOLIO

Our low risk Bluechip portfolio had a good year despite the caution I exhibited by taking lower risks and always having substantial cash. The portfolio was up 29% this year Vs 24% of Nifty and hit our target of 5% outperformance. We deployed some of the cash as markets corrected, however we still have a reasonable amount of cash to deploy. The since inception returns are 125% much above Nifty returns of 70%. This is an ideal product for low risk investors.

PORTFOLIO NIFTY
Till 31st December 2018 12.30% 6.00%
OVERALL 2019 32.20% 12.00%
OVERALL 2020 17.26% 14.90%
TOTAL YTD 2021 29.02% 24.13%
OVERALL SINCE INCEPTION 124.59% 69.39%

POWER ALPHA STOCKS

Power Alpha Stocks performed exceptionally well in 2021 with all recommendations except one making profits. After a brilliant 2020 I was not sure if we could repeat the same in 2021, we did not do as well but still made huge profits. Last year profits were Rs 432000 (2020) and 2021 ended with Rs 403000 which is a huge profit and nearly 67% on average capital deployed of Rs 6 Lakhs and 50% plus on overall capital. Overall opportunities will be good for this product even in the future and we will look to capture them. Earlier during the initial years we used to take higher risk in this product which would sometimes lead to significant volatility. However over the years it has converted into a lower risk product with significant positive performances. It’s a unique product in the entire market place.

ONLY FOR TRADERS

Only for Traders had a strong year and overall 2021 performance was very strong with a 2 Lot Profit of nearly Rs 630000. 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. The ROI of this product is quite high. The last two months could have been better as we took the right calls which worked better once the Stop Losses got hit. However despite that we did well. In my view the payoffs will be very high sometime in the next two months when the view plays out right and we can realize full profits. This is an excellent product for high risk investors/traders who want to leverage to make profits with adequate downside stop losses.

POSITIONAL TRADING CALLS

Our top performing trading plan Positional Trading faced challenges in the first few months of 2021 as the strategy did not play out, however made a huge comeback over the last few months and ended the year with good performance. The last three months saw profit booking of Rs 460000 with profits of above Rs 150000 in each of the last three months. The good thing in trading is that a period of 2-3 months of good performance can make up for a few subdued months. We hope that this performance will sustain. This has been one of our best products in the past however faced some challenging strategy issues. We hope to continue to do well going forward

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 450000 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

EQUITY RESEARCH INVESTMENT 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

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

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

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


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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

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Investment Advisor Registration No INA000000425  Research Analyst Registration No INH000008109