What these market experts have to say

By Morningstar Analysts |  12-10-17 | 
 

At the 7th Morningstar Investment Conference held in Mumbai, various investors spoke about their views on the stock market. Overall the mood was bullish with a hint of caution thrown in occassionally. A few are reproduced below.

Prashant Jain, HDFC Mutual Fund

I honestly do not see any domestic threat to the market. Corrections may take place due to geopolitical risks. India does have a correlation to events outside the country.

But I believe we are sitting at the cusp of a powerful GDP growth rate in the next 3 to 5 years. The sectors which will do best in the next few years will be those that have not performed in the last few.

Sankaran Naren, ICICI Prudential Mutual Fund

We are in the boom phase but have not yet ventured into bubble territory. When it moves into bubble territory, we will see revenue-based valuations, massive inflows into theme funds and poor quality IPOs. But right now, with the market booming, keep an eye on asset allocation and don’t fall for the theme of the day.

Right now, herding is happening in stocks that have done well and are costly. Towards the end of a bull market, there are very high allocations to specific sector. This makes the risk significantly higher.

Do note, 50% of the current mutual fund investors have come in for the first time. They have come from a fixed deposit mindset and will like the returns from equities over time. However, they have never seen a stock market downturn. They must understand the risks involved with this asset class.

Ridham Desai, Morgan Stanley

Extreme levels matter. Those who got in 10 years ago, in October 2007 would probably have made nothing in the market. There is a danger of jumping in at the peak.

We are in the fourth bull market since 1979. The current one is the longest; we are 8 years into it. It began in March 2009 and continues. It is the longest but also the slowest in pace of returns.

It should carry on for another 5 years with intermittent corrections. We have not yet reached the euphoric phase. We will get these eventually, but not too soon.

Expectations needs to be toned down. The 17% CAGR of the past is no longer feasible, around 12-13% is more realistic.

Ramesh Damani posed this question to:

  • Charandeep Singh - Girik Capital
  • Kuntal Shah - SageOne Investment Advisors
  • Manish Bhandari - Vallum Capital Advisors
  • Rahul Rathi - Purnartha Investment Advisers

Question: Which will come first? Nifty at 9,000 or 11,000? The unanimous answer was 11,000.

Saurabh Mukherjea, Ambit Capital

A very small set of stocks make money. The bulk do not even beat the rate of inflation. And also, the Indian stock market is volatile. So stock picking must be done diligently.

I look at four broad points over the years. Are revenues overstated (P&L account)? Is the balance sheet overstated? Is the promoter stealing? Has the  auditor been bribed?

Anup Maheshwari, DSP BlackRock

Looking at valuations alone, large-cap stocks look reasonable.

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