2 days Ago
Anshul Saigal , Founder, Saigal Capital , says holding onto investments for a longer time reduces the risk of losing money. Their strategy is to invest in good companies at fair prices and to have a long-term view, not just the next few months. Markets move in cycles.
Some sectors are doing well while others are struggling. For example, in 2021, the IT sector was strong while PSU banking was weak. The following year, IT declined and PSU banking improved.
This creates chances for investors in all market conditions. While it may be challenging to earn profits right now, there are still opportunities available. If you look closely, you can find ways to make money in the coming years.
What has been your year-end strategy or is there a strategy or are you just sitting back and waiting it out until earnings next month? Anshul Saigal: The strategy is what has worked for me over the last 23 years, which is to focus on what is in your control and the only two things which are in your control are buying quality companies and buying them at reasonable prices. As long as you can do that and you do not need the money that you are investing in the markets tomorrow, you are going to be home if you hold those stocks for a period of two-three years. The longer you are holding the horizon, lower are the chances that you are going to lose money and in that context, that is the strategy that we are following -- invest in quality companies at reasonable prices and then have a time horizon which is not the next three or six months.
I can in the same breath tell you that markets move in waves. There are certain sectors which are on a high wave at one point in time and there are others which are on a low wave. In 2021, IT was high and there was banking and particularly PSU banking was quite low.
The next year IT came down and PSU banking went up. Now this gives you an opportunity in all types of markets and it is left to you as a seasoned investor to find this opportunity. I find that at this time it is not going to be easy to make money, but there is enough opportunity in the markets.
If you dig deep, there is money on the table to be made in the next few years. What are pockets where one should look for those ideas and dig deep? Are you going top-down and calling out some sectoral trends and within that look for the best ideas or is it going to be very bottoms-up? Anshul Saigal: I was reading a report of a conference that recently happened of mostly SME type of companies, but broadly small and midcap companies. If I looked at the valuations of companies in this report, while there were quality companies doing very well, growing very handsomely over the last two or three years, the valuations were anywhere from 50 times to 60-65 times on a trailing basis for these companies.
In this space, valuations have stretched themselves to a level where there is no room for error. Stock Trading Masterclass on Value Investing and Company Valuation By - The Economic Times, Get Certified By India's Top Business News Brand View Program Stock Trading Market 104: Options Trading: Kickstart Your F&O Adventure By - Saketh R, Founder- QuickAlpha, Full Time Options Trader View Program Stock Trading Technical Analysis for Everyone - Technical Analysis Course By - Abhijit Paul, Technical Research Head, Fund Manager- ICICI Securities View Program Stock Trading Stock Markets Made Easy By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Renko Chart Patterns Made Easy By - Kaushik Akiwatkar, Derivative Trader and Investor View Program Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Markets 102: Mastering Sentiment Indicators for Swing and Positional Trading By - Rohit Srivastava, Founder- Indiacharts.
com View Program Stock Trading Dow Theory Made Easy By - Vishal Mehta, Independent Systematic Trader View Program Stock Trading Market 103: Mastering Trends with RMI and Techno-Funda Insights By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading ROC Made Easy: Master Course for ROC Stock Indicator By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Heikin Ashi Trading Tactics: Master the Art of Trading By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading RSI Made Easy: RSI Trading Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Introduction to Technical Analysis & Candlestick Theory By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program You Might Also Like: Investment strategies: Pick stocks from broader market; 5 sectors to choose from, says Anshul Saigal So, broadly, there will be extensive opportunities in the broad market but there will be that opportunity which will be attractive for the seasoned investor where valuations are reasonable because of company-specific reasons. I find that will be the kind of market we will see in the coming year where stock specific opportunities will do well and these opportunities lie across sectors.
Banking overall is not expensive, but in banking stock specific opportunities whether it is pharma, capital goods, manufacturing, in all sectors of the market, you will find these stock specific opportunities. Of course, it is left to you to dig deep and find the opportunities. Broad markets seem slightly expensive, particularly in the small and midcap space.
Who do you think is going to win this race when it comes to Q-comm platforms? Is it going to continue to be Zomato or do you think Swiggy can catch up? Anshul Saigal: This is a game of high execution and the margin that you get out of better execution because the margins overall are small, that benefit that you get out of good execution is just priceless. Whichever player in this space executes better as a result of that margin differential will do well over a long period of time. They will have greater capital available to deploy behind their business.
More and more people will flock to their network and as a result, this business will do well. Of these two companies that you mentioned, one is clearly head and shoulders ahead and it looks like that company is taking market share from the other. Unless there is a new player which comes in with a better offering, it looks like in this two-player race, one player is clearly ahead.
But what caught my eye is the combination of puja essentials and tonic. The person would be basically having gin and tonic and then going and asking for forgiveness from God by doing puja. Quite an interesting combination.
But this is how we see this segment of the market. Have you looked at any of these Adani Group of companies and if yes, what would you recommend as a buy? Anshul Saigal: Some of the companies in this group are very interesting, very forward-looking businesses. Of course, there is the airport business, but the green hydrogen business and new energy technology businesses in this space are quite interesting.
Some companies which cater to this segment of the market are actually futuristic companies and will do very well in the future. You Might Also Like: Make global diversification your New Year resolution as asset allocation within a country is not enough: Devina Mehra Companies like Adani Power, Adani Green Energy will, in the future, have quite a large market to cater to. Some of these companies have indicated significant investments over the next decade to the extent of $10 billion.
Now if a group is putting that kind of investment behind one segment of the market, which is green energy, then one can imagine what kind of upsides from that segment they are foreseeing. Of course, the government also has given tailwind to this segment by providing regulatory thrust to the green energy segment and this group is well-placed to take advantage of that. One will have to go deeper and read the annual reports, but this group offers interesting opportunities in the green energy space.
You were briefly alluding to IT as a sector. What is the expectation because soon you will have the quarterly numbers which are going to start off with IT? Anshul Saigal: Yes, and if you look at the valuations in the IT sector, particularly the frontline companies, you will notice that most of these companies trade at between 25 and 30 times price to earnings for growth which is either in single digit or low double digit. Now, this sort of a setup is not in our judgment set up for material upsides.
Of course, in relative terms, you may see upsides or relative outperformance in this space because the markets in general are expensive and this is a defensive space. People may flock towards this space to prevent downsides. But on an absolute basis, upsides from here look capped in our judgment.
Of course, there will be the odd stock specific opportunity, which one will get in this space. For instance, if you look at the performance of HCL Tech over the last 6 to 12 months, it has far outstripped the sector as a whole. Such outperformance in stock specific opportunities will always be available.
But overall, on an absolute basis, to expect material upside from here will be a stretch in this sector. You Might Also Like: Nifty 50 fairly valued; challenge could be in broader market in 2025: Anurag Singh (You can now subscribe to our ETMarkets WhatsApp channel ).
