Thousands of midcaps are still down by 20-40 percent from their peak, and not to forget, ‘Bhangaar’ cap is down by about 50-90 percent which is a good sign. That means euphoria in the market is settling down, Vijay Kedia, MD, Kedia Securities, said in an interview with Moneycontrol.
Edited excerpts:
Q: Markets recently touched a record high. Is it time to be fearful or become greedy?A: I practise yoga, which teaches me to be stable in high and low (volatility). So for the record, when we are talking about record highs, it has no meaning as only 5 largecaps helped Sensex to reach new highs last week.
Thousands of midcaps are still down by 20-40 percent from their peak. Not to forget, ‘Bhangaar’ cap is down by about 50-90 percent which is a good sign. That means euphoria in the market is settling down.
Q: You recently released a song on markets … what was the inspiration?A: Music is my 1st love. I am not a good singer but a passionate one. The idea of writing a song came suddenly to my mind when I was traveling.
Mother Saraswati blessed me and I wrote the song in just 20 minutes. It is dedicated to all new and small investors.
Q: You have talked about the concept of long-term investing, management quality and as well as the ups and down in the business. According to you, what is the mantra using which investors can avoid getting trapped in non-performing stocks?A: Sant Kabir says
धीरे-धीरे रे मना, धीरे सब कुछ होय
माली सींचे सौ घड़ा, ॠतु आए फल होय|
(Translation: "Oh mind, go slow. Everything happens at its own paceThe gardener may water the bucket a hundred times. But the fruit will arrive only during its season")It is important to understand that things take time to happen. In the stock market as well, timing of the season is not defined. So, don’t time the market and keep a long-term view.
Q: In terms of value investing, you have always talked about the balance sheet as well as management quality. What are the elements which one should look at before taking an investment call, and how to decode them?A: Always remember these three elements: management, management, and management.
You could buy a very costly car which might have all the safety equipment, but a careless driver will bang it sooner or later. When we correlate this with markets, investing is like traveling on high terrain. An experienced driver is the key.
Q: How to get rid of or avoid investment in Bhangaar stocks in your portfolio, which you have coined in one of the interviews to media channel?A: Look at history. The biggest wealth destroyer in this market have been Bhangaar cap. Isn't it enough to learn a lesson?
The market is at a record high but most investors are not happy because the value of the portfolios is not reflecting the same sentiment. What should investors do now – wait patiently or churn portfolio?
Last year the index was not rising but midcaps rose to historical highs. This year things have reversed, which means we are witnessing more action (buying) in largecaps.
Churning is a continuous process. Investors should observe closely the development in the sector and the stock you invest in.
Q: Any stocks which you think have the potential to turn multibaggers in the next 2-3 years?A: There are many midcaps which are available at 2013 valuations. However, the horizon should be for 10-15 years. An investment made for the next 2- 3 years would come under short term investment.
Q: Do you think we have resumed the bull run after the recent breakout?A: Euphoria in the mid cap space has mostly settled down. Which is a good sign. Upcoming June quarter numbers will further differentiate between the bull or the bhool (mistake).
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
