2012 should be much better than 2011: Ambareesh Baliga

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2012 should be much better than 2011: Ambareesh Baliga

As expected, the New Year has not seen any flying start. Many experts are still bearish on the market. However, Ambareesh Baliga of Way2wealth says, 2012 should be much better than 2011. “I think we have seen a disastrous 2011. So, it really can’t get worse than that.”

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Excerpts from Markets Midday on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Bajaj Auto BSE | NSE 29/05/12 Are Mutual Funds betting on Bajaj Auto? Other Stocks in this news Hero Motocorp | Tata Consultancy Services | HCL Technologies | IFCI |

As expected, the New Year has not seen any flying start. Many experts are still bearish on the market. However, Ambareesh Baliga of Way2wealth says, 2012 should be much better than 2011. "I think we have seen a disastrous 2011. So, it really can't get worse than that."

In an interview to CNBC-TV18, Baliga says, in the first two-three months, there may not be too many positive triggers. He advises lay investors to stay out of the market. "Let the markets see the bottom, let it bounce back, consolidate at higher levels. Possibly that would be the time to get in for the lay investors," he adds.

Also read: Nifty may test 4200 soon, says Darashaw & Co

Below is the edited transcript of his interview with CNBC-TV18's Sonia Shenoy and Gautam Broker. Also watch the accompanying video.

Q: What is your outlook? Do you think there are some positive triggers that can lead the markets upwards?

A: I think we have seen a disastrous 2011. So, it really can't get worse than that. Hopefully, 2012 should be much better.

In the first two-three months, there may not be too many positive triggers. Although we have started today with positive PMI data and also the announcement by the government of allowing foreigners to invest in India, but in the next two-three months, possibly the results again would be a negative trigger.

The monetary policy, I do not expect the rates to come down immediately. So that could be a negative one. The third one could be budget where again you really can't expect too much for the markets. I think these three negative triggers would play out in the next one-two months.

After that, I suppose the survival instinct will come out. Because of that, you will have some decisions being taken on the policy level. Hopefully, that should be the trigger for the markets to again start reviving.

Q: If you do believe that we are somewhere near the worst for the market, what should be the call be at this point? Is it a good time to invest in stocks that have seen stress case valuations or do you think you can still wait for a bit?

A: This market is basically meant for smart long-term investors who can actually take the pain and have the courage to invest. It is basically meant only for them. The pain is there in the market for the next two-three months.

We don't know where the bottom is. It is difficult to put a figure on that. If you are taking of specific stocks, individual stocks, it is possible that they could crack another 15-20% or possible more from here.

In case you are buying today with a conviction, I suppose you should have the same conviction to buy the same stock at 20% lower, when it falls. Only in that case, you should be investing today.

Otherwise, for most of the lay investors I have been saying that it is still time to stay out. Let the markets see the bottom, let it bounce back, consolidate at higher levels. Possibly that would be the time to get in for the lay investors.

Q: In case of the 15-20% correction that you are alluding to, if you were to buy at that point, what would you go out to buy first?

A: I am not saying that the markets will correct 15-20%. I am saying the possibility is there because no one really knows where the bottom is. It is possible the bottom could be at the current levels, it could be 4,200. I think one needs to be ready for such sort of an eventuality.

When we are talking of buying, there are a number of sectors today which are available at mouth watering valuation. There have been very decent valuations in the last couple of months. But at these levels, I would still suggest sectors like banks, infra structure and autos. I think these are the sectors to be looked at because we have seen decent correction in most of them.

The other sector is again capital goods where again we have seen a correction of 50-60%, even in the largecap stocks. At these levels, one could look at them. But I would like to repeat as I said earlier that is meant only for the long-term smart investors.