The Macro Lens: Volatility Is the New Normal
Geopolitics has replaced earnings season as the market’s dominant driver. A fluid US–China tariff regime, rising Europe-Japan growth anxieties, and a newly-emerged India-Pakistan flashpoint create an environment where news flow, not spreadsheets, can swing prices. Nilesh argued that these headwinds all point to slower global trade, softer developed-market demand and, by extension, muted export growth for India. Yet relative to its peers, India remains a rare island of structural resilience: a diversified domestic demand base, favourable demographics and a reform-minded policy backdrop can still deliver high-singledigit real GDP growth once current tensions stabilise.
Valuations & Earnings: When Top-Down Meets the Income Statement
Q4 results underscore the dilemma: revenues for the Nifty-500 cohort have grown barely 5 % YoY, while the index still trades near 20–21× forward earnings. The market is effectively paying tomorrow’s P/E for yesterday’s E. Doshi expects consensus EPS for FY-26 to be revised down as the trade war grinds on—a view consistent with our own proprietary earnings-revisions monitor. That disconnect justifies patience: cash is not a forecast, but a residual of rigorous valuation work.
From Sector Bets to Stock Selection
The 2020-24 cycle rewarded broad “top-down” allocations—chemicals, railways, defence PSUs and renewables all delivered multi-baggers. Both Green Lantern and PMS AIF WORLD participated early, then trimmed exposure when sentiment turned euphoric. Going forward, alpha will migrate from themes to single-business idiosyncrasies. Whether it is an agri-inputs company poised to monetise five years of R&D, or an under-the-radar API manufacturer reclaiming global share, the next leaders will differentiate through competitive moats rather than macro tailwinds. That tilt naturally directs research resources toward the small- and mid-cap universe, where informational ine iciencies are greatest.
Cash as a Call Option on Fear
Green Lantern still holds roughly 45 % in cash, but has redeployed 8–10 % over the past month as selected valuations turned attractive. Doshi sees a further 15–20 % of incremental deployment once volatility around tariff negotiations and border tensions subsides. Crucially, cash is not a market-timing weapon—it is a reservoir for high-conviction opportunities that often re-price upwards within days once numbers inflect. This echoes our own discipline: protect capital first, then scale into clear, earnings-backed catalysts.
• Macro backdrop – Doshi sees an unusual triad of risks: a fluid US–China tari regime, pronounced Europe-Japan slowdowns, and fresh India-Pakistan tension. Each threat is manageable in isolation, but in concert they keep global growth brittle.
• Valuations – With Nifty-500 earnings up only ~5 % and the index at 20–21× forward EPS, the risk– reward skews to caution. Holding cash is not a call on direction; it is an insurance policy against paying tomorrow’s P/E for yesterday’s earnings.
• Cash deployment plan – 8–10 % has already been redeployed in April–May. A further 15–20 % is earmarked for the next two-three months, assuming tari rhetoric cools and Q1 prints confirm bottom-line traction.
Implications for Investors
For allocators weighing fresh commitments, the message is clear:
• Equity remains indispensable—fixed income and real assets cannot match the long-run purchasing power protection equities provide, even in a low-growth world.
• Selectivity is paramount—broad indices may tread water, but niche leaders with 15 %+ sustainable earnings growth can still compound meaningfully.
• Partner with managers who embrace both prudence and agility—a blend of deep research, valuation discipline and willingness to hold cash is vital when the macro fog thickens.
Practical guidance for existing & prospective investors
| Concern | Doshi’s Response | Implication for You |
| “Should I top up when the manager is 45 % in cash?” | Yes—because cash is a call option on fear. When the right price presents itself, deployment is swift and the window is narrow. | Stagger allocations; do not wait for a perfect macro backdrop. |
| “Large research teams vs. boutique depth?” | Green Lantern’s three-person core has >60 years collective research pedigree and adds analysts for modelling support. | Intellectual bandwidth, not headcount, drives idea quality. |
| “Will equity still beat debt and gold?” | In a world of record fiscal deficits, fixed income is capped, and gold lacks yield. Select Indian equities still offer the best real purchasing-power protection. | Maintain strategic equity weight, but partner with risk-aware managers. |
At PMS AIF WORLD, our research desk applies the same mosaic of macro vigilance and micro rigour showcased in this webinar. We believe that wealth is created not merely by participating in bull markets, but by navigating uncertainty with a repeatable process that prioritises risk-adjusted returns.
To explore how our curated PMS and AIF solutions can help you compound capital through the cycle, connect with our advisory team today.
Disclaimer: Securities investments are subject to market risks and there is no assurance or guarantee that the objective of the investments will be achieved. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements
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