- Two types of stocks:
- Cyclical stocks
- Growth stocks
Cyclical stocks
- Left side of the value chain
- Consist of raw materials and/or commodities
- Steel, sugar, oil, etc
- They should be part of Non-core portfolio
- Prices in the short term are always emotional
- You cannot have an estimate of the prices
- Avoid such stocks
Growth stocks
- Right side of the value chain
- Consist of final products
- Cars, FMCG, etc
- They cater to demand
- Premiumisation sectors
- Should be part of Core portfolio