Last Updated on Dec 14, 2021 by Aradhana Gotur
Dick Host Mody is the founder of Ethical Advisers and a 30-yr veteran in the Indian equity markets.
I believe in the idea of resurgence. With the pandemic disrupting the old normal, individuals are left with much higher disposable income. India will shift to the habit of REVENGE SPENDING, which will pave the way for the resurgence of markets within industries such as leisure, travel, and entertainment.
As the months near the end of 2021, it looks bright for the entertainment, travel, and leisure industries to pick up pace and serve individuals the opportunity to spend more or in this case of ‘Revenge Spend’.
As we near 2022, it looks bright for the entertainment, travel, and leisure industries to pick up pace and serve individuals the opportunity to 'Revenge Spend'. Click To Tweet
What almost felt like a lost cause, has slowly yet steadily begun to resurrect from the dead. After a commendable battle led by healthcare professionals, drug companies, local administrations, there seems to be some sanity in dealing with and controlling the mania. While newer challenges like “variants”, “new strains” and so on will continue to cause the “peek a boo” type momentary limited shock effect, by and large, the world has quickly learnt to adapt.
Look around you, it is quite heartening that after a challenging 2nd wave coupled with a shortage of vaccines, India achieved the milestone of administering 1 bn. vaccinations in a year, and this figure has been rising by the day. The much delayed Tokyo Olympics, the Dubai EXPO 2020, IPL 2021, major sporting events globally have finally seen the light of the day – even if with restrictions.
2020 is now passé, in fact, 2021 will soon also be passé!!!
Friends, let’s keep it basic, let’s keep it SIMPLE. Ethical Advisers strongly believe that 2022 will bring about a sea change in the way we spend our earnings/idle savings. Logically, as the whole world resurrects from the pandemic woes, and vaccination drives globally make progress, we expect a strong rebound in consumer-spend especially on local and international travel, leisure and out-of-home entertainment
Some optimists go to the extent of predicting REVENGE Travel, i.e. locked up like parrots in a cage now free to fly, the average traveller will travel twice or thrice as much as they would normally do, TO MAKE UP for lost opportunities in 2020-21. The same analogy can be applied to potential “consumer spend” be it purchase of the real estate, upgradation of existing dwellings, renovation/home improvement, spending at events, including weddings (this is huge in India), dining out, leisure cruises, vacations and so on.Some optimists predict that an average traveller will travel twice or thrice as much as they would normally do, TO MAKE UP for lost opportunities in 2020-21. Related sectors to be watchlisted? Click To Tweet
Several businesses are well poised to benefit from the vengeful return of this pent-up consumer demand globally and we at Ethical Advisers, firmly believe in the expected *revenge-spend* in 2022-23 to make headlines. It is thus wise to pre-position part of our portfolios to participate in this theme intelligently. We view this as a moderate risk strategy with a high reward potential, largely driven by the fact that valuations of stocks comprising this basket (Happy Hours: Cheers to Good Times) are still relatively attractive compared to the index leaders or the indices themselves.
This smallcase is unique in its own right as such a clever combination of stock picks and this theme is not being offered by any mutual fund or advisor to the best of our knowledge. Multibagger stocks comprising airlines, leisure companies, malls, fashion brands, dine out companies, hotels and a surprising selection of indirect beneficiaries make up the Ethical Advisers’ Happy Hours: Cheers to Good Times smallcase.
Check out Ethical Advisers’ Happy Hours smallcase here.