Here, it is actually ant-correlated to inflation. These are mostly IT (information technology) stocks with exports. Then we have a digital transformation portfolio. These companies again have mostly five years order book visibility. Another portfolio is of railway infrastructure companies. These companies get most of their orders from the government or defence organisations. The order book is visible for the next five years or more. We have a portfolio of defence companies which have practically no correlation with inflation. How can you make your portfolio inflation and recession-proof now? Just for context, Peter Lynch had 1,400 stocks in his portfolio and beat Buffett during 70s. A diversified portfolio allows you to create a 100 bagger portfolio in a much safer manner than a 100 bagger stock. Even (Warren) Buffett was happy to buy numerous companies when numerous companies were available cheap in the 1970s and early 80s.ĭo not fall for the concentrated portfolio narrative and chasing the 100 bagger. Do not fall for loading up on the “next 100 bagger”. A portfolio should be diversified across not only sectors and industries but also across growth vectors. I would like to caution that, precisely, because there are numerous companies available, an investor should not just jump in and load up on his favourite company. Market's Myopia or Blindspot is such that there are companies even in the top 10 of Nifty which are mispriced.
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Further, if you dig deeper into the broader market, like we do a search in the full market of the top 1,000 companies using the scientific investing framework, you will see that numerous companies with strong balance sheets, persistent competitive advantages, and strong growth vectors are available at significant discounts to their intrinsic values.įurther, Mr.
The headline Nifty and Sensex PE (price to earnings) itself is lower than what it has been for several years now.
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