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00:00 Rajesh Srivastava, MD of Dimensions Consulting joins us right now for a quick perspective
00:04 there.
00:05 Good having you.
00:06 Thanks for taking the time out.
00:07 Good morning, Niraj.
00:08 Very good morning to you.
00:09 Is this volatility warranted and justified and do you think it lasts at least until the
00:14 results are out of the way, the election results that is?
00:18 I think first of all, the volatility is very good for the market.
00:20 It is a very healthy sign for the market because a one-way movement either ways is bad news.
00:26 Either you become a genius at selecting stocks or you become a dud at selecting anything
00:30 good also.
00:31 So I think volatility does two things to you.
00:32 One is like a speed breaker.
00:34 It tells the market to slow down, re-evaluate what you want to buy into or what you want
00:38 to sell and move on with life.
00:40 You can't have a trajectory running across it.
00:42 Number two is I think it's elections.
00:45 You heard I would just come back yesterday.
00:46 There are lots of different versions coming out of the market as to whether it's an election
00:51 issue or is it a fact that the valuations are too high?
00:53 Is it a fact that people are booking profit?
00:56 But generally speaking across the board, I think what's happening is that most of the
01:00 PE funds and the foreign investors who invested last three to five years, all of them want
01:05 to take money off the table at these valuations.
01:08 You can't argue.
01:09 The valuations are very high in the market and the results have to be extraordinarily
01:13 justified.
01:14 So that extent, I think volatility will continue.
01:17 Some sectors which continue to grow will perform better.
01:20 Other sectors which have been laggards to so to say, I think will struggle in this year
01:24 to get any decent return out of them.
01:27 Okay.
01:28 Ajay, the larger construct I would just love to understand, if you were constructive on
01:38 India say a month ago, would you use the volatility and if there is a downward bias to accumulate
01:45 some quality names or some earnings based names or how have you?
01:49 Or would you not?
01:50 Yeah.
01:51 See, I think the question is, are you in those sectors?
01:53 You know, one of the key performing sectors like for instance, the capital market related
01:57 sectors, right?
01:58 Whether it's a stock exchange, whether the depository, whether it is the exchanges, I
02:02 think if you call and whether it's the AMC, if you look at the composite set of sectors
02:05 affecting retail investment in this country, that's been a significant re-rating in the
02:10 last six to nine months.
02:11 And if you got left out, I think it's a good idea to go in and buy at every correction
02:15 the one, if you get a correction, the results are very good.
02:18 So the whole sector of retail capital market stories is coming together very nicely in
02:23 the market and it should give you annuity income and it should give you a lot of growth,
02:27 say it could be a growth in the next one to two years.
02:31 That segment is fine.
02:32 The trouble is coming from a different part.
02:34 Trouble is coming from the consumption sector.
02:36 And I think that's a sector you would not want to bet on because given the inflation
02:40 rate, given what we see in the market, I think the food consumption and the discretionary
02:45 consumption item, they are at stake.
02:48 What is wonderful in the market is the duopolies.
02:50 Now it is bad for the economy, bad for the consumers.
02:53 But if you see any correction in the market, there are certain sectors like telecom, airlines,
02:57 where literally there's a duopoly.
02:59 And if you've got left out, I think it's a good idea to go buy.
03:03 So as I said, where earning trajectory is good, and I think you should go buy, if you
03:07 have a correction in a multiplex stock, obviously don't go buy the stock.
03:10 But if you have a correction in airline stock, I would certainly recommend that you go buy
03:13 the stock.
03:14 Ajay, from a portfolio standpoint, what would you do at this stage?
03:19 You said that the markets do look expensive.
03:22 There haven't been too many major positive surprises in terms of earnings.
03:27 There's also a little bit of a lack of fresh triggers in that sense, and you have a little
03:31 bit of uncertainty around the earnings.
03:33 Would you take a cash call at this stage?
03:36 Expensive markets, fair for investors to take some profit off the table, maybe sit on 10%,
03:42 15% cash and re-enter the markets once a lot of this is behind us.
03:47 Is that a fair way to look at it?
03:48 Or would you say fully invested if you're not an FII?
03:51 I wish I could predict the market, but one thing I know for sure, if you're not taking
03:55 profits and enjoyed your life, I think you're going to miss out a lot.
03:59 I don't know till what time you do keep on going.
04:01 So my recommendation always to everybody I meet across the board is, guys, you need to
04:06 enjoy the life, enjoy the profit and put the money in the bank.
04:09 Very clearly, you're right.
04:11 Absolutely put some money in the bank and use the money, buy things which you never
04:15 thought you wanted to buy, buy absolutely useless gadgets if you have to buy that, go
04:18 for a holiday you want to do.
04:20 So I think profit booking should be intrinsic.
04:22 And look, for every stock there's a trajectory and after that it stops.
04:26 You've seen what happens to Reliance, you've seen what happens to L&T, etc., etc.
04:30 Even the mid-cap stories are now edging out at the point of time, there's a plateauing
04:33 out.
04:34 So it's not that you're going to get exponential returns.
04:36 So profit booking, answer is yes.
04:39 Do you need to shift your portfolio?
04:40 Answer is yes.
04:41 Do you need to sell out some stocks?
04:43 Answer is yes.
04:44 Absolutely need to get out and go to somewhere where relatively you get a better return in
04:49 a better market.
04:50 And, you know, whether the price goes up or down later on, I can't predict.
04:54 But what I know for sure is that the life that you lose by not spending money on yourself
04:59 will not come back to you.
05:01 So a little philosophical, nothing to do with market, but to say, spend money on yourself
05:05 if you've made money rather than wait for something else to happen and neither the money
05:09 will be there, neither age will be on your side.
05:11 Thank you.
05:16 [music]