2 weeks Ago
Samir Arora , Founder, Helios Capital , says he will not buy any stock which has disappointed recently because the bull market of that size is over and it does not matter what they are doing because somebody has started a sector fund, and therefore money will go into this sector or that as this theme was popular. He prefers to go for the winner or guys who are growing much higher than the market and that is why he likes food delivery companies like Zomato and Swiggy. At least for two-three years, he can imagine them growing at 30%.
There’s a lot of excitement going on in the primary markets. We have had some big bang IPOs and new ones are slated to come out this week, including Swiggy. Any thoughts on what we have seen over there? Would you have any recommendations as to what one should do? Samir Arora : We are anchors in Swiggy on both FII and mutual funds, but we get very little.
But the bottom line is that we are playing the thesis that this sector is a growth sector and the number of growth sectors will be reducing quite fast now for at least the next six-nine months because I do not expect the guys who have disappointed recently to suddenly say next quarter everything is good. Therefore, from that big picture and the fact that it came at a fair discount, to the holding that we have in Zomato, the normal impression of the investor or fund manager analyst is that since we have one, why should we care to buy the other? But then we realised that if you look at our history whether it was the IT companies in 90s or the banks or infra in 2005, when the sector moves, everybody moves. So, we thought we should buy the second stock.
On Monday, you bought ICICI Bank . But other than the private banking names, what else? Samir Arora: Wherever the results have been good, we are interested especially if we have that stock, because right now we are not in the mood to buy completely new names. We feel we are in the end game for this kind of correction because look at the big picture.
I believe this money has been taken out for two reasons. One is, oh, this money is going to China or second, this money is going to the US and I think it is because of the US event. Even there, the event will be over tomorrow, day after, three days later.
It is a case of buy on rumours, sell on news. Stock Trading Technical Trading Made Easy: Online Certification Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Dow Theory Made Easy By - Vishal Mehta, Independent Systematic Trader 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 Algo Trading Made Easy By - Vivek Gadodia, Partner at Dravyaniti Consulting and RBT Algo Systems View Program Stock Trading Market 103: Mastering Trends with RMI and Techno-Funda Insights By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Options Scalping Made Easy By - Sivakumar Jayachandran, Ace Scalper 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 Valuation Made Easy By - Rounak Gouti, Investment commentary writer, Experience in equity research View Program Stock Trading Commodity Markets Made Easy: Commodity Trading Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Candlesticks Made Easy: Candlestick Pattern Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Mastering Options Selling: Advanced Strategies for Success By - CA Manish Singh, Chartered Accountant, Professional Equity and Derivative Trader View Program Stock Trading Market 101: An Insight into Trendlines and Momentum By - Rohit Srivastava, Founder- Indiacharts.
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2%? All these stories were made later. But it is true that in the US, if Trump wins, then it may be more beneficial for the US than emerging markets, at least in the beginning, because of tax cuts and whatever else or tariffs on the rest of the world. But I cannot imagine in the big picture guys whose trade off is India or the US! If they are emerging market guys, they cannot invest in the US.
So, these things feed on themselves and later on if you look in hindsight, it looks so illogical because you have to tell me which investor is this, whose two choices are whether he should have money in India or in the US. But separately, I believe it is happening because of the US and not because of China. I do not believe this money is going towards China.
You made a very important point, which is that when the momentum reverses, it is not technical, it is also fundamentals. In the case of ICICI Bank, Sandeep Bakhshi comes in and it is a multi-year trend. Where are some other multi-year trends where the fundamentals have reversed? Can you give us some specific examples or names? Samir Arora: No, it is simpler than that.
You do not have to change that. What I am saying is, for example, companies will continue to do well for a number of years or quarters till they do badly and then they will do badly for a number of years. You can take it in the example of HDFC Bank.
HDFC Bank used to grow at 30% per annum, then in one quarter, whichever that quarter might have been, when they guided down to 20%, I do not exactly can show to black and white. But if I search, I can tell you there would have been 10 reports saying that this is a one-off and that next time we will go back to maybe not 30, but 28. It is in every sector.
In IT, when you are doing well, you just continue to do well and then one quarter you do badly and then that quarter you lose 5-10% but after that, do not go near it for a number of quarters. You Might Also Like: Look for stocks that can double in 5 years & keep return expectation moderate: Sunil Singhania It is both ways. But all I am saying is I do not think that if you are doing well and then doing badly for a quarter, you will immediately do well.
Even rationally, logically, I can explain. If a company has been doing well for long and then disappoints you, they have put everything into making an attempt and are trying not to disappoint you, but they are not able to find any angle on revenue and cost and are delaying this, deferring that and then they throw in the towel saying, we cannot continue at this pace, we cannot be running on a treadmill, let us just calm down, this is unsustainable. And then new things happen for a number of quarters.
But this is true for everything. Therefore, I am not buying anybody who has disappointed now on the basis that this is one off. Look at the excuses given by our consumer companies.
It is shameful that instead of coming out and just guiding down, they point to elections. Next time they will say it was because of summer, or the rains. I hope they do not say next time it was the US election because of which we did not buy Indian guys, did not buy consumer items, but can be just upfront about it.
But I will not buy any stock which has disappointed recently because the bull market of that size is over and it does not matter what you are doing because somebody has started a sector fund, therefore money will go into this sector or that as this theme was popular. Just go for the winner or guys who are growing much higher than the market. Which is why I like all these food delivery types.
At least for two-three years, I can imagine them growing at 30%, which is very rare right now in our market. You Might Also Like: Chakri Lokapriya on 2 safe areas to invest in this market US Election 2024 Another American Civil War if Trump loses election? What Trump victory would mean for US & the world (You can now subscribe to our ETMarkets WhatsApp channel ).
