Let me first start with wishing all our readers a Healthy and Prosperous New Financial Year.
Its been 3 years and we all have seen a lot of things happen.
Covid Pandemic, Lockdown, Multiple Waves, War, Commodity Spike, Inflation,Zero Interest Rate to Multiple Interest Rate Hikes and more.
Over the last 20-25 years we have seen a Y2K Boom and Bust, Global Financial Crisis, Taper Tantrums, Elections, Demonetizations and Markets continue to be in their own Cycles as well.
Lets try to look ahead with optimism but take some learning's from previous Market Cycles.
The Biggest Fear we all have as Investors/Traders is Big Market Drawdowns and Time Wise Market Corrections.
Lets try to focus on the Bear Market Cycles from an Investor/Traders Perspective.
The Three Types of Bear Markets.
1) The Brutal Bear Market.
2) Time Correction Bear Market
3) The Sideways Market.
1) The Brutal Bear Market.
- The likes of 1992/2000/2008/2018-2020.
- In these Benchmark Indices fall 40-60% , Smallcaps 50-75%.
- Not Over-Leveraging, Not Averaging, Increasing Cash and Sitting on it is a Solution. For Traders its difficult to Short because of recent history of Bull.
- Smallcap Divergence to Index generally helps to find the Euphoria. But difficult to go on very High Cash – Easier said then Done. Check this Post in December 2017
- We all will get hit one way ( Investments, Trading ) or the Other ( Biz, Job ) etc.
- We have only been able to survive not make a killing or get killed. Difficult to be Optimistic – Check this post on ( 24th March 2020).
- The bottoming out is fast and recovery is furious. 1994, 2010, 2021 back to highs in no time.
- General Mistake – Losing Hope, Mental Capital and Optimism.
2) Time Correction Bear Market.
- The linkes of 2000-2003, 2011-2013, 2018-2019 ( worse followed by 2020).
- In these the Benchmarks have already taken a knock and start consolidating but the Smallcaps continue lower. Indices down 50% from peak.
- There are few stocks/sectors to hide. A relatively high allocation to them can help you survive apart from some cash.
- Example PSU/Metals/Value stocks in 2000-2003, FMCG, Pharma, Home Building Materials, Some Quality Names. ( Remember ITC was highest weight by 2013).
- The Best Opportunities get created here for next few years and you have enough time to build. The Multibaggers of 2003-2007 or 2014-2017 or 2020-2023
- General Mistake – Losing Patience, Lack of Belief and Confidence.
3) The Sideways Market.
- The likes of 2006, 2015-2016, 2021-2023.
- Benchmarks do a correction of 5-25% but Smallcaps are relatively not as bad.
- Quite a few sectors/Stocks which outperform big.
- Textiles, Chemicals in 2015-2016, Capital Goods, Banking, PSU, Manufacturing, Value, Short Term Themes – Opening Up in 2021-2023.
- Post this a new trend starts out of nowhere with low drawdowns and clean trend.
- 2007 madness, 2014 Elections, 2017 Post Demon.
- The Best Part is if you can outperform in those sideways period you make a Killing in the Euphoria which helps you survive big Drawdowns in next Bear Market.
- General Mistake – Sitting on Cash, Not Focusing on the Good.
Our strategy has been to Survive 1 , Try allocating more on Hiding Places in 2 to survive and Outperform meaningfully in the 3rd. Apart from that Indian Bull Markets are very kind !!
According to us we are in the Sideways Market. We posted about this in November 2021 – Back to 2015 - Do Read
We do plan to make a detailed Webinar on this Topic – How to Strategize in Market Cycles with a lot of Examples and What Next. Hopefully in the coming two weeks and Free.
To sum it up the above context really helps in learning to survive and thrive in different cycles.
Its been a Good Year in terms of Returns but Super Year in terms Of Outperformance.
1) Technical Traders Club Performance Fy 2022-2023 and Fy 2021-2022.
FY22-23
- Technical Trading Recommendations +17%
- Smallcap Folio +24%
- Nifty Smallcap is Minus 15%
FY 21-22
- Technical Trading Recommendations +52%
- Smallcap Folio +58%
- Nifty Smallcap is + 28.63%
Not putting Fy 20 returns as that starts from a Low Base. ( If you want to feel good look at Last 3 yr Returns )
Things to Note
- A diversified portfolio with Max Allocation to single Stock at 8%.
- No Carry of previous performance as every new position starts with same value.
2) Smallcase Performance.
Top 10 Techno Funda
Performance: Portfolio vs Nifty Smallcap
- One year: +25.93% vs -15.23%
- Since inception (Aug’21): +51.38% vs -10.30%
Top 10 Insider Trading
- One year: -4.83% vs -15.23%
- Since inception (Aug’21): + 33.57% vs -10.30%
A good time to start looking at Insider Trading Data. Insider Action generally is at peak in Cycle 2 and Cycle 3.
Last we saw max activity in 2011-2013 and 2020. Not as high but decent activity.
Things to Note
- 10 Stock with Equal Weights.
- Fully Invested since inception.
If you want a detailed performance sheet can whatsapp on 7977801488 or email harsh@analyseindia.com
Rest all details of our services on www.nooreshtech.co.in and upcoming webinar will be posted there so register on email or whatsapp.
