INSUBCONTINENT EXCLUSIVE:
Young investors on Dalal Street have a fancy for the second-rung stocks, as they tend to rise faster than the broader market in good
times.
The recent crash in smallcaps and midcaps did bleed such investors badly, but they remained calm and stayed put throughout.
The BSE
Midcap and Smallcap indices corrected up to 20 per cent from their respective all-time highs hit in January this year till July end, whereas
select stocks tanked up to 90 per cent
As many as five young value investors, who either did not see the crash of 2008 or were not very active during that time, believes the
market will continue to throw up decent opportunities in the coming months.
Market participants should focus on management quality, earnings
well as midcaps had started trading at frothy valuations
value investor Ekansh Mittal from Kanpur.
ETMarkets.com spoke to five investors in the age group of 26-34 to understand their investing
philosophy and behaviour during the recent crash and where they see value after the recent crash in midcaps and smallcaps.
Jatin Khemani,
Some of his favourites like Relaxo, KRBL, Tasty Bites and Page Industries delivered him multibagger returns in last few years
Khemani says in 2017 he found the market too heated, especially in the smallcap and midcap segments, as they were trading at astronomical
positions where we expected demerger to unlock value, which meant limited downside and attractive upside potential
Now, we are almost fully invested
However, we keep ranking all the portfolio companies in terms of risk-return and are replacing lowest-ranked positions whenever we are able
turmoil in the broader market, some of our portfolio stocks have come down
However, we believe these are merely quotational losses and we are not worried as long as the underlying businesses continue to report
above-average earnings growth
We are invested in high-quality businesses; and majority of them is owner-operated and boasts of market leadership positions and debt-free
told ETMarkets.com.
Jatin was still in college when the markets melted in 2008.
Ekansh Mittal, 30, Kanpur Ekansh Mittal is a Kanpur-based
Some of his holdings have rallied more than 1,500 per cent in last seven years.
Mittal did see the 2008 crash but his investments were small
After the recent correction in 2018, he believes there is a probability that the investments one will make in 2018-19 will deliver much
higher returns in next three years or so than the investments you made in 2017-18.
With oil prices receding and major disruptions like goods
and services tax (GST), demonetisation already behind, the base effect will help earnings improve going forward, Mittal told ETMarkets.com
more favourable for long-term investors and staggered purchases over next 8 to 12 months could be the best way to capitalise on the
wrong if one has not diverged much from the basics like buying stocks where you can understand the business and have a decent idea about the
decent past track record in terms of operating performance, capital allocation, balance sheet management and cash flows
Last, but not the least, valuations have to be reasonable, says he.
Besides long-term investment, Mittal believes one should look at
opportunities like de-mergers, buybacks, de-listings
continue to come in the near future
He believes correct stock picking and proper research can help an investor be at peace in all phases of the market.
With a portfolio return
of 16 times, Malani has spotted multibagger stocks like Avanti Feeds, Ajanta Pharma, Minda Industries and Bharat Rasayan at their early
stages in last seven years
He was not in the market during the 2008 crash but believes that correction was a part of the game
Another factor that helps me a lot in times of crisis is that I never leverage to invest
Visionary management + scalability + pricing power + tailwinds + high growth + higher incremental ROCE + low equity + under ownership +
leader in a niche area = Lethal combination for a multibagger.
Ashwini Damani, 33, KolkataAfter becoming a chartered accountant (CA), Damani
started investing in market from 2009 using his own savings
He later realised his mistakes
had to first ensure that he learns the skill andunderstands the finer aspects, and that meant spending time and money to learn
I soon realised that staying with quality and avoiding the urge to make quick money is the key to money making
I laid down certain ground rules for myself such as focusing on cash flows, instead of EPS and PE ratio, buying stocks of businesses which I
can understand and track easily, maintaining discipline with portfolio allocation to individual stocks and noting down mistakes so that I do
later sold at Rs 3,000, and Avanti Feeds, which he sold at many times higher from his original purchase price in 2011
One should read the history of domestic as well as global stock market to figure out previous cycles, heroes and blowouts
opportunities and invest in them
At present, the market is totally ignoring the positive changes happening in the real estate and tourism sectors, where the government has
taken a lot of positive steps
Janardan Kothari invest in the equity market for 30 years
His father asked him to read as much as he could on legendary investors Warren Buffett, Peter Lynch, Charlie Munger
He also read Philip Fisher, Howard Marks and books by Taleb
Graphite India and Sundaram Finance are some of the stocks that have delivered Kothari multibagger returns in last six years.
For research,
Kothari relies on annual reports, magazines and discussions with like-minded market participants
He says a brief idea of technical analysis also helps him figure out short-term trades
Kothari is not overly concerned about the market, as well as quarterly earnings of the companies that he holds or tracks
Bandhan Bank, Bajaj Finance, Havells and V-Guard
