The Stallion Asset PMS Way of Investing: How We Spot New Trends and Leaders

Growth investing is the main tenet of Stallion Asset PMS, a Portfolio Management Service SEBI Registered (INP000006129). Contrary to most portfolio management firms with corporate support, we began as a research analyst firm and evolved into a portfolio management firm due to our consistent performance in providing research analyst services that enable our clients to outperform the market consistently. We specialize in purchasing top-notch midcap firms that the analyst community frequently overlooks. We strive to generate CAGR returns of at least 25% for our clients using our distinctive investment philosophy of spotting trends and minimizing risk.

How does your investment philosophy help you stay on top of the market trends?

Instead of using the Buy and Hold method, we typically use the Buy and Rotate technique. Each bull market has a unique leader, and we identify that leader in each bull market and follow it. There cannot be a bull market without increasing earnings; thus, we always invest in industries that are predicted to increase by more than 20% over the next three to five years. The last bull market's winners won't be in charge of the upcoming bull market. Instead of fresh 52-week lows, we prefer to invest in firms making 52-week highs. The more the market believes in the sustainability of growth, the more the stock will be valued for long-term investment.

How can your investment management strategy benefit from inflation?

Our portfolio is made up of businesses that typically resist inflation. We want to ensure that our businesses will succeed regardless of all these macro events, whether high inflation, low inflation, rising or falling interest rates, or whatever else comes our way. We continue to believe that businesses that are market leaders or developing leaders can endure through all market cycles due to their position in the market. Our portfolio typically remains well-balanced across market cycles since it typically consists of four sectors: consumer, pharmaceutical, financial, and technology. While consumers and pharmaceuticals support us in difficult times, finance and technology support us in prosperous times.

Has the current state of the war affected your portfolio's results?

We understand that terrible ones and vice versa always follow happy times. We had IL&FS in 2018, Covid in 2020, and the conflict is now. We've come to understand that individuals who profit from these difficult times are always rewarded in prosperous times. Of course, hindsight is always 20/20. Very simple to say but challenging to do because emotional control is also required.

The goal is to continue investing during good times and bad. This is why we maintain a low beta for our fund while ensuring that we still aim to outperform the market. We intend to assist our clients for the next ten years, and we are optimistic about new themes. Our office has a saying, "Never be too hopeful about India, but do not be too pessimistic either." Keep your cool, invest in reputable companies that are market leaders or emerging market leaders, follow the market, eliminate losers, and ride winners.

For our firm, risk management is crucial. Risk management and stock selection would be given equal weight if we had to decide. You must both conserve and generate capital. Capital creation is impossible without capital conservation. However, you also need to know when to be aggressive and defensive. In addition to being wealthy, the goal is to maintain that wealth. This has been observed in all market veterans over the past 30 years. The ones who made it were the ones who survived. Hitting sixes nonstop won't work; you must also know when to be aggressive and defensive. Our philosophical framework makes this possible for Stallion Asset PMS. A mix of leaders and emerging leaders enables us to profit from market gains while also falling much less when the markets are correct. Our objective is to deliver ALPHA, produced on both sides, by outperforming the market when it rises and falls much less than when it is correcting.