I wouldn’t say good or excellent, but it looks good. The markets have suddenly stopped falling and mid and small cap stocks are finally showing signs of life.
Absolutely. I would say this is a big relief for Indian investors and gives them a chance to wonder why they haven’t been sitting down on their whole portfolio while all this chaos was happening. The implication of the last two months and more recently is that the whole philosophy of investing now has to change.
It has to become a bit more in the short term because not only in India, but across the world, the political class no longer fears the economic disadvantages they bring with their policies. Look at the United States; they dumped a president with the best economy, the lowest rate, the lowest unemployment rate for a man who pumped in $2 trillion when inflation was high and look where the world is today.
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The same situation applies here whether you are looking at windfall taxes or export taxes in India. These economic policies do not give comfort as a long-term investor and the reason is that it is a windfall profit that creates a corpus to make more investments. that India has to do in oil. If you tax windfall profits, you take them away from businesses.
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So from an investors point of view you have to be realistic about long term aspirations in the stock market and more importantly reserve your profit because when economic policy changes across the world not just in India today we will never know and all your profits will disappear. So people have to book the profits and take the money home. Nothing is long term in this world, the old investment paradigm is dead.
Now is the time to count the profits as we have seen a rally. It could be a bearish rally. So if it’s a bear market, raise money?
No, I think we absolutely have to get out of certain stocks because the recession is approaching and growth will slow down. There is no doubt about that. The RBI says so. How much more, we don’t know the answer. Economic policies have a slightly longer term. Nothing will happen the next morning, but in three to six, nine months, we will see the implications of what happened. So I think that’s definitely a step up and the market has shown us that mid and small caps aren’t the place to hide.
If people want to be adventurous with their portfolio, for alpha return, take a 10-20% bet on mid and small caps, but the game in town will always be large caps because that’s going to survive and over the last 12 months. , the only positive index is the largecap index. He was the one who turned positive at that time. I would say it’s not just about booking profits. It’s all about reserving the profit in the right place. This is more important and avoiding lost bookings might be the worst strategy in this market.
Inside the index, what do you do now with the most weighted stock after the government announcements and?
I’ve always said never buy PSUs unless you’re buying for a dividend yield. Buy it, forget it and count your dividend yield. They are not a capital gain thing. I would put ONGC in that bucket. Also, the dividend yield has not been as good. You have to be a little careful with stocks like ONGC.
So forget CGSB. People love Reliance. The last windfall tax was a matter of unfortunate government policy, but this stock held steady for a long time and then picked up. You definitely don’t want to bet against him in a longer time frame. So if you’re an investor in this country, this is a company that straddles so many sectors right now – it has retail, technology, oil refining, chemicals, telecommunications. It’s hard to get a conglomerate and if the company breaks up, you might get a little boost in terms of performance.
We don’t know when it will happen but if you were to bet on the Indian economy, where to start? It was the
Twins. But this is no longer the case. I think as an Indian investor, there is no choice but to go from there. So it’s not about whether or not, I think it’s a must have for a wallet.
will report its numbers later this week. Is the pain already in the prize after the comment we heard from N Chandra himself?
Again, we need to look at the TCS from a longer term perspective. I keep saying that IT in India is a very good investment in the cash market. To play the futures market with a short-term horizon, you might want to play with fire with these stocks, because that’s not the right way to go.
But if you are a cash buyer of TCS and
, you are safe and sound. At the end of the day, business is strong, it’s not going away. The rest of the world needs to catch up on IT. It’s only America basically dominated. These companies pay returns to shareholders. Governance is not an issue at all in these companies. All of these things together and given where the rupee-dollar is, it’s going to continue to help them no matter what happens in this market.
Their ability to retain tech talent will also improve quite substantially in my opinion over the next 12 months. So overall I think I don’t know if the pain is there because the pain in equities is going to be there for a while for all investors but longer term we’ll be very healthy and safe with healthy returns in this sector. .
Out of all Indian industry sectors this offers perhaps the best place to be at all times and the market can go up and down but you have to be there but in the spot market keep it cash .
(Disclaimer: The recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)