Liquidity: 2021’s most used word (in the financial world)
Joseph Stiglitz, the Nobel laureate in Economics, in his year-end article described 2021: as a roller coaster year, as hope rose and fell with the pandemic. A simple but apt description of the year. My thoughts go out to all of us, who have lost our loved ones in this tragic year. While the catharsis is extremely personal, the grief is collective.
I also believe that the post pandemic world is an unequal one, wherein people and their livelihoods have suffered, for no fault of theirs. Most of us are privileged and we at BuckSpeak can’t be more grateful, for not being at the wrong end of this pandemic.
Investor proposes, Fed disposes: Liquidity, Tech Spend and consumption explosion
In the investing world, we all have benefited from the liquidity surge (the unprecedented money being raised through IPOs and startup fund raises are a strong reminder of that). I am sure, we all have heard and read enough about the crazy pay hikes and job offers (especially in tech). This has also been parallelly followed with the huge shift to digital. Irrespective of the business size, each one of them has embraced tech like never. Even at BuckSpeak, our tech spend has increased by 4x. The best part: there is no going back.
We have also seen a consumption explosion, what Joseph Stiglitz referred to as unleashing of a burst of contained energy. Two most visible examples : the revenge tourism( remember Maldives) and the unprecedented waiting period for new car launches ( Mahindra XUV 700 : book now, delivery in 2023)
It has been a great year for us, and we continued to grow strongly. We are now a team of five. Many of you have already met my senior colleague Srivatsa Jayanti, who comes with more than 11 years of experience of managing young affluent families (in our world, if you are less than 45 years, you are young 🙂 ). His core area of specialisation is working closely with Affluent Double Income families. Shaik Shaheen Afsar joined us in the Client Success Team. She would be working closely with Pruthvi Raj Chauhan. This allows us to have generous bandwidth for our clients. Sneha Khammampalli takes care of Analysis & Research at BuckSpeak. The team now has cumulative experience of 40 years.
We have also added the highest no of clients in a calendar year ever. Interestingly, only half of them are from Hyderabad. In the post pandemic world, the relevance of geography has dissolved. This also gives us a larger pool, to discover clients, who align with our philosophy of financial well-being, leveraging the principles of behavioural science.
What we did
Our portfolios had extremely positive outcomes in the post pandemic recovery. Some ideas that did well:
- We had invested quite a bit, into mid and small cap funds, during their dull run in 2018 and 2019. We kept the faith post correction in Mar 2020 and continued to participate in the space. 2021 was the year of mid and small caps, which translated into meaningful outcomes in our portfolios
- Going against the grain, we partially exited our positions in healthcare/ pharma space in late 2020. They have underperformed the broader market since then
- We also remained optimistic on infra. To be honest though, the pace of its performance, has surprised us as well
- Scale up our equity exposure. We reduced our equity exposure for older portfolios (min 3 years old).
- Participate in any of the new funds (more than 100 were launched in 2021) this year. Why? 90 % of them were old wine in new bottle and remaining were overvalued themes at this stage
- Invest in any exotic, complicated, lock in products
2022, what’s in store?
A year is too short a period in investing world, so I will have to disappoint you and avoid making any predictions . We do hope that next 2-3 years would be ‘dull’ (rewarding, if you accumulate well) for equities. So, as an investor the weapon you would require the most, in your armor, is PATIENCE. Indian economy has several challenges and therefore tremendous opportunities. Our entrepreneurs have several problems to solve, and they would require your help as investors to be partners in that journey
Wishing you and your loved ones a very safe and happy 2022
The BuckSpeak Team
Disclaimer : The opinions expressed in the Blog are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in the commentary are subject to change at any time without notice.Image has been used only for representational purposes. While lot of care has been taken to validate the data , neither BuckSpeak nor any of its employees should be held responsible for its authenticity. Investments are subject to market risk , please engage with professionals to take better investment decisions.
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