Master Class with Super Investors: Key learning from veterans

He also added, “You have a limited time, but what are the stocks or what are the key things to focus on like growth, return on equities (ROE), free cash flows, capital allocation so if you focus on 4-5 key metrics it becomes relatively easier to sort of look at the whole universe and figure out what would do well over the next 4-5 years.”

When asked where the Indian market right now, Rajasekhar Iyer said, “We are fairly not in a bear market right now. If you look at what happened in the last week itself, RBI governor resigning, BJP losing the elections, and you got a new RBI governor who people are not sure about and still the market went up. So, I would say we are in the middle of the bull market, what phase of the bull market? I don’t know, but we are in a bull market.”

Speaking about bull market, Raamdeo Agrawal said, “This is very different kind of bull market but I still call it bull market because there is no earnings growth and yet market is going up. So, it is an earnings less kind of a bull market where you are stretching the same stocks 30 PE, 40 PE, 70 PE but it is a bull market.”

He further added, “It doesn’t excite me because the fun is to buy cheaper stocks and lots of them but today wherever you go after doing the book after doing the screener and everything and where you reach there you realise that you are the last guy to reach there, already 100 guys are there. So, it is a very deeply researched market and fully priced in bulk of this stuff where I could reach so far. So, kind of not that exciting.”

Hiren Ved, Director & CIO of Alchemy Capital Management said, “I feel that we are in a midst of an uptrend. I think 2018 second half was very much like 2013 second half. You had a few macro headwinds back then. I remember P Chidambaram was brought in as the finance minister and Raghuram Rajan came as the RBI governor. The rupee depreciated by 20 plus percent, small and midcap stocks corrected very sharply, there was elections in six months, so very similar setup in 2018. You had the oil prices going up, currency coming down, worries about Fed increasing rates on top of that you had the IL&FS problem, so you had a perfect storm in August, September. Usually a perfect storm is where the bottom is really made when there is no visibility and people are scared. Now there is elections six months down the line. So, such similarity and I tell investors that history is a great lesson. Whoever invested in the second half of 2013 was laughing all the way to the bank in 2014 to 2017. The only difference I feel is that in 2013 markets were incredibly cheap, this time around markets are not that cheap. So, it is that much more difficult. However as long term investors you should always welcome a crisis because at least now I think if nothing else a crisis is what will give us an opportunity to pick a few stocks and that is what happened in August-September.”