Dalal Street Voice: Stay put! Money-making opportunities generally arise in gloom and doom scenarios: Akhil Chaturvedi of Motilal Oswal

Akhil Chaturvedi, Chief Business Officer at Motilal Oswal Asset Management said that money-making opportunities generally come in gloom and doom, those who buy on dips generally perform better than those who buy in tail winded markets.

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In an interview with Zeebiz's Kshitij Anand, Chaturvedi feels that India has the potential to do achieve double-digit nominal growth leading to strong earnings growth translating in positive returns from the markets. Edited excerpts:

Q) Bulls have taken a back seat as bears take control. The benchmark indices have been pushed below crucial support levels. What is your take on markets?

A) This is once again a black swan event, out of nowhere we are in a war zone between two countries and on being largest commodity export country which is Russia.

The sanctions imposed by the west have caused commodity prices to soar including that of crude oil and this pessimism is being extrapolated to a doomsday scenario.

In such events, markets do react negatively, and as the situation reverses then markets are also likely surprised by the positive side.

Q) Crude oil boils to $130. What is the kind of impact you see on markets, economy and India Inc.?

A) Crude did touch $130 briefly on 7th March and then cooled off to $125 level very quickly. If it does remain at these levels then there would be a serious issue for oil-importing countries like India and China, whether it would mean more inflation, widening of CAD, depreciation of the currency, and finally all leading to slowing down of the economy.

However, I do feel the world including western countries cannot tolerate such high crude and gas prices and certainly, these would cool off in due course of time.

Q) Will rising crude oil impact earnings growth in the March quarter?

A) The impact of high crude oil prices will be felt with lag and not necessarily in arch quarter. The pain of high cure oil prices is expected to be seen in June or September quarter.

Q) What is the kind of impact you see on markets as well as reforms post state election results?

A) Difficult to comment in the short term, but our outlook on Indian markets from 3-5 years perspective is very positive.

We feel India has the potential to achieve double-digit nominal growth leading to strong earnings growth translating into positive returns from the markets.

Q) There is no stopping of FIIs as they pull out more than Rs 18000 cr from the cash segment of Indian equity markets in just 3 sessions. What is the trend you foresee for FIIs amid US Fed rate hike possibility and Russia-Ukraine war?

A) FII’s according to me will come back to India as it offers a unique growth opportunity to FII’s and the moment dust will settle we will see a reversal of flows as well.

Q) Are there any money-making opportunities that investors can grab amid the current gloom and doom ?

A) Money-making opportunities generally come in gloom and doom, those who buy on dips generally perform better than those who buy in tail-winded markets.

The ongoing correction had led to valuation correcting by 30% hence always a good time to grab.

Q) Given the fact that market is down more than 10% from highs – any mistakes (1-5) that investors should avoid making as volatility increases?

A)

-          Don’t exit now
-          Don’t see portfolio everyday
-          Do not react to news items

Q) How can investors look at asset allocation (considering he/she is in the age bracket of 30-45 years). Is it time to reduce equity in the portfolio and increase the percentage of debt?

A) Thumb rule is 100- AGE should be equity allocation, follow that and all should be ok!

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)