Stock market crash | investment strategy: we are not yet at the peak of panic; staying put is a good option: Mihir Vora

“With the government’s focus on infrastructure development and PLI programs as well as a few other initiatives like the EV theme that is being rolled out, by ethanol theme and hydrogen economy – there’s a good chance that we also see a cycle of private sector investment kick off in the next one to two years,” says Mihir VoraSenior Director and CIO, Maximum life insurance.

What is your advice right now? Manish Daangi believes in staying put for a while, getting into stocks after five to six months, and not locking in your money yet. Would you agree with this strategy that it’s time to get out the shopping bags and look for opportunities?
I would tend to agree with the stay put approach because there are a lot of moving parts and of course although history has told us that after every geopolitical issue the markets tend to bottom out quite strongly, but as we speak, events are still unfolding on the Ukraine side and to that extent, it’s too early to go all-in or take aggressive calls. So watching and waiting for a major panic to occur would be a better option, but right now I don’t think we’re at the peak of the panic yet. So staying put is a good option.

Is there a high-conviction buy you’re seeing in the markets right now – in IT, autos, or one of the national stocks?
Relatively speaking, I’m more bullish on the thematic elements of the national recovery like consumer discretionary which includes autos, consumer and also financials, as many financials are tied to retail lending and housing finance. So this seems like the right place. Of course, with the government’s focus on infrastructure development and PLI programs as well as a few other initiatives like the EV theme that is being rolled out, by ethanol theme and hydrogen economy – there are we’re also likely to see a private sector investment cycle kicking off in the next one to two years.

So basically, domestic manufacturing should do well, infrastructure should do well, including road construction, etc. this consumer discretionary space versus software, etc., which are external sectors. It is necessary to go further for the national games.

What do you think of the rout within the broader markets that we have seen recently? Last week’s underperformance is evident. As for today’s carnage as well, is it likely to continue?
I don’t know about the carnage, but I’ve been saying for some time for a few months that overall valuations in the large-cap space are much more attractive than mid- and small-cap valuations. A valuation foam had built up in the small and mid cap space which is correcting itself.

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