Whenever the Indian markets rallied, the fundamentals always played second fiddle to Reliance -the index bellwether. ‘There can be no rally without Reliance’; even the walls of Dalal street had this belief plastered all over. As Reliance rose and fell, our market hit bull highs and bear troughs for over two decades. This trend seems to have decisively changed. The markets have risen from its lows of December 2011 to the highs of December 2012 backed by sharp up moves in high quality stocks. HUL, ITC, TCS, HDFC, HDFC BANK & ICICI have played a big part in taking control of market leadership. That a quality universe of stocks is at the forefront of the market is truly the story of India.
“I don’t want a lot of good investments; I want a few outstanding ones.” – Philip Fisher.
Under ownership of equities has been a conscious choice of the majority. They believed they were better off buying gold or realty which seemed to be on a roll through 2012. In a year where not owning equity was by choice, how has equity really performed? If you were an investor buying select themes like consumption or growth plays like midcaps, you will find that equities have delivered a positive surprise in 2012. Savvy investors have seen gains in 2012 that have beaten alternate asset classes significantly. Smart strategy and precise stock selection worked wonders for a few in 2012. We believe equity will outperform other asset classes in a more secular way in 2013. Therefore, a wider section of investors will benefit in 2013 in contrast to the savvy few in 2012. December always sets the mood for the next year. Things only seem to look brighter and more colourful. The markets may soon get the festive look and play Santa to believers.
Believe in equity. Become an early convert.