Articles
Quarterly Investor Calls
ITUS Long & Short
ITUS Snippets
Articles
Quarterly Investor Calls
ITUS Long & Short
ITUS Snippets
by Vidya Vydianathan
December 6, 2024
Investing in growth in the public markets
Study our investing style and process at length
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A brief from our quarterly letter – Last week we discussed the previous cycles, our takeaways, current cycle and the characteristics and how our portfolio is positioning based on this cycle. This week, we are presenting you a brief on why we are not concentrating and how do we think about concentration in the portfolio.
A quarter back we had written an article about what do we think about concentration, please click on the link to read about the same –
Concentration and Long Term – Shift to the outcome and away from the process – ITUS Capital
As we are in an inflationary boom cycle, the positioning of the portfolio becomes even more important and the year 2024 we are speaking about increased volatility in the market. When the valuations are under our control in terms of downside protection and when earnings growth support this framework, this is typical period when we would look at concentration in our portfolio. Presently, our portfolio consists of 33-35 companies exhibiting robust earnings growth. However, valuations are not cheap; they fall within the median range. Given this market scenario, we avoid excessive concentration. Instead, we initiate starter positions across sectors.
What would we do along the way? Today’s snapshot of the portfolio, if we took a starter position in these companies, Over the next three to four quarters, some businesses may not execute as expected, leading us to reevaluate our thesis and potentially exit certain positions. Conversely, we anticipate non-linear growth in select companies, especially considering the current market cycle we are in. If that happens, we’ll increase our exposure to those positions. Concentration also evolves organically through gains—holding onto companies that have consistently compounded value over time.
To summarize, In the current inflationary boom cycle, portfolio positioning becomes crucial. Despite increased market volatility in 2024, we focus on companies with strong earnings growth. Valuations are not cheap, so we avoid excessive concentration. Instead, we take starter positions across sectors. Over time, we adjust based on business execution and non-linear growth prospects. Concentration evolves gradually over time and as gains accumulate.
We had few enquiries on recording of the Q1- quarterly call. We will be sharing it as soon as it is ready with us.
Also, we keep writing to you about our SIP program that presents investors with a convenient avenue to regularly infuse capital into their portfolios. Feel free to check out the benefits for your clients. If you need more info, reach out to your dedicated relationship manager at [email protected].
These weekly episodes are now available in our website for your quick read and you may access the same in the below link.
