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3 hours ago
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"Why are we saying what do you think, say, what is the number? Now, the second thing they will say is that the premium is very high to other markets. That other market includes China, because of which all the emerging market, this thing goes white," says Samir Arora, Founder, Helios Capital.
A bit of a differentiated view because everyone else is telling us that we need to calibrate and moderate our expectations, because we have done so much better perhaps in the last four years. But you are saying this is normal and we should still anticipate 15% kind of return from Nifty this year.
Samir Arora: No, first of all, it is not a matter of discussion. The Nifty number is real. So, please, you after this, properly do it on a screen for three years. Now, do not do two year, then I will do seven-year, three-year is a normal this thing. And for three years, you put…, or even you do put five years, seven years, whatever you want to put and then also put it in dollar. And then just put it in perspective that take the same number for 10 years and 15 years, or 20 years.
And if the last three-year numbers are lower than 10 years and 15 years in INR terms and in dollar terms even more so because that 10% depreciation just happened like in 22 and then another four-five since then. So, it is not a matter of discussion. It is what it is.
Why are we saying what do you think, say, what is the number? Now, the second thing they will say is that the premium is very high to other markets. That other market includes China, because of which all the emerging market, this thing goes white.
So, I am not saying some great bull run is going to happen. But this idea that the market will fall 15% or 30%. If you see the previous three bad years that were there, which is say 2008, 2000, or 1992, where people would be better off raising cash at the end of the previous year, then those previous years were very-very big. In 1991, the market Sensex was up some 60-70%.
In 2007, because that time NSE 500 and all were also there, they were all up some same 60-80% and same thing in 1999 and then 2007.
You do not fall after a 10% move. I mean, you may fall, but you do not anticipate it every morning saying that, oh, so much has happened, the market was up 9% in rupee terms, I think it deserves a crash for that. Now, the second thing can be what are the results?
And the results are not good. But that seems to be induced by bad policies, one of them from the RBI to make everything so tight, the loan growth so tight, forcing poor HDFC Bank to immediately after a merger, say, bring your credit to deposit ratio down to 80s. How?
So, you randomly forced a slowdown in this thing, you made MFIs that instead of three, you should have two, you told the NBFCs that you cannot grow more than 25%. All these things induced and now they will correct over time and slowly, slowly, you will be okay in life.
I take your point partly, but just to kind of counter it a bit, do you think it is fair to only look at let us say valuations or return only from Nifty perspective because it is the broader markets which have run up almost 20-25%, more than that actually if you look at the three years CAGR.
Samir Arora: No, if you look, please look right now, if you give me one second, I will tell you right now, look at it right now. Do not look at smallcap index, look at the 500 index, which is the S&P 500 equivalent. You see for three years, it will be around 15.
No, so that is what I am trying to say the broader end of the market has done better and I am not talking about the top just say 100 companies, but beyond that.
Samir Arora: 500, we are talking about 500 companies…. So, I was saying generally, that in every market you can say, oh, these 10 stocks have gone up. Actually, it is whole thesis of our fund, I mean, philosophy, which is available online and all is that every day, literally every day, I mean, broadly, every day, some 150 stocks, 200 stocks are massively beating the market and some 100 and 150 stocks are massively being beaten by the market that is a big picture.
So, all the time, you will find, now if you say, no, I am only looking at this, I am only looking at that.
Therefore, the best way to say, what is the mutual fund industries entire industries returns because that is the total investors who are there, do not say this smallcap fund because if one smallcap fund has done well, in line with the index, that means, okay, do not buy a smallcap right now I agree.
But you cannot say the market, you keep seeing the market where it is not the market. It is a number of stocks, but then you have to see money weighted returns, money weighted returns are the entire returns of index or the market or the flexi-cap guys.
Now, do not say that one defence sector has done well, okay, then do not buy defence stocks. Somebody will say some other platform, we do not believe because we still like the platform. But if somebody says platform stocks have done too well, okay, do not buy them.
But the point is, you cannot brush and say that the market has gone up too much, because the market is the 500 index as far as practical sort of measuring of it is concerned. But please tell me what do you come up with or I can do it in one second, if you let me turn around and show you my back.
English (US)