PERSONALISED INVESTMENT MANAGERS

Do Macros Matter? A View from India’s No.1 PMS

22 February, 2022


          
            Do Macros Matter? A View from India’s No.1 PMS

Mimi Partha Sarathy: Charandeep Singh What are the reasons that you can put forth to our investors on macro relevance?

Charandeep Singh: My only point on macro is that we are not macro experts. We concentrate on growing the fund. We find it difficult to make macro predictions. Many macro predictions don't matter to equity returns. If you go back to the 2009 crash and recovery that happened, till 2011-12 people were talking about European debt reports, bankruptcies, creating a lot of fear and panic in the markets but it really didn't matter. It was all short term. If you had sat through that then you would have been very well rewarded.

Again between 2011 to 14 there was a lot of macro uncertainty in India. Lot of the investors stayed put and obviously benefited from it. In the end it really didn't matter.

We find the macro rhetoric to be very uncorrelated in the long term with equity Returns. Yes, in the short term it adds volatility, but we have not found any value addition in trying to predict it. We feel it is better to concentrate on the individual stories which prompted you to pick up a certain stock.

Mimi Partha Sarathy: And in spite of this, Girik still manages to be the No 1 PMS fund in India?

On the reason why Girik is considered one of the best PMS in India is because as a style we are very focused on the CANSLIM style of money management. We developed these two proprietary screeners over the years which help us identify sectors and stocks to focus on from a bottom-up basis. We drive indicators from the market - Momentum or price indicators. Our research team is then focused only on those areas. So we are very focused on these select sectors and select stocks where there is massive earnings acceleration.

The second is our risk focus. We are of the view that management of equity returns is more the management of risk than the management of equity returns. If you can cut risk, minimise it in your processes, be that through governance checks, quality research or ALSO CUTTING LOSERS. Making sure that you are not invested in your losers for long, making sure that your losses Don't Cost You Too Much.

That is what differentiates us and makes us stay apart from the crowd.

We have highly concentrated portfolios unlike mutual funds which may Run 50 or more stocks. We generally Run 20 to 30 stocks. We have to be very sharp on risk management, because small mistakes can cost us dearly. Risk management involves position sizing, sector allocation, liquidity management and having a very fine grasp on what is and what is not working.

And if you don't understand, YOU SELL simple.

Have you had a conversation with a financial advisor to get this sorted out? We have said time and again that markets can correct sharply and this can be caused by any macro indicator. And in these uncertain times, you can be rest assured that Murphy’s law will apply. Anything that can go wrong will go wrong.

If you want to have conversations around what we feel could be ideally suited to your financial goals. We are certified financial planners and pride ourselves on getting alpha returns to our clients and peace of mind on their deployment of financial plans.



We urge you to have conversations with financial advisors who have seen and navigated these cyclical rises and falls. They are in the best objective position to help you understand and mitigate the risks of letting emotion get the better of you.

We urge you to have conversations with financial advisors who have seen and navigated these cyclical rises and falls. They are in the best objective position to help you understand and mitigate the risks of letting emotion get the better of you.

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