All our portfolio companies were flat to up this quarter. As usual, annual commentary on our major positions starts at the end of this letter.
We have opened our last three letters with COVID. This will be the last time we do so, simply because by the next quarter we won’t need to.
The daily case count has now gone below 15,000. Active cases hover around 200k, down from 700k the last time we wrote to you. Fatality rate is now decidedly below 1.5%. Despite its limited resources, poor administrative capacity, and chaotic cities crammed with millions of non-compliant citizens, India has done well so far.
It’s the next phase - the mass vaccination, where India will clearly shine. It produces 60% of world’s vaccines. It administers some of largest vaccination programs in the world. It has decades of experience dealing with infectious diseases. The government plans to vaccinate 300M by July. Even with delays priced in this will be a terrific achievement.
Meanwhile, NIFTY has rallied 75% from its lows and is now trading at all time highs. Sixty percent of the BSE500 companies trade higher than they did at the end of 2019. Many of them are doing so despite little prospect of recovery until 2022. For some, the multiple on normalized earnings is now higher than it was pre-pandemic. Is this a bubble? Or has the pandemic somehow made the companies better than they were?
Notes & Letters
A collection of our thoughts, views, and excerpts from our investor letters.