These days investors do not like talking about stock market and even get irritated…but they are also the ones who have been unsuccessful or consider stock market investing as gambling.
While it’s important to gain insights from those who have been unsuccessful (you can avoid same mistakes), it’s is even more important to listen to those who have been successful and amassed enormous wealth from their investment in stocks.
In this article we would like to share with you a recent interview of Rakesh Jhunjhunwala on ET Now in which he opines that this is the best time to buy equities, but there’s a caveat (read below).
You can watch the entire interview in the video shared, while key highlights of the same are as below:
- Best time to invest in equities, if investment horizon 4-5 years
- Leaving top 40-50 stocks, the valuations for rest of the stocks are very low as if there’s “chori ka mall” i.e. the guy has stolen goods and ready to sell at any price
- Never seen such dislike for equities; retail ownership of stocks at lowest levels
- Return reward ratios are unbelievable and some stocks can even deliver 5-10 times return but over a period of time
- The importance and value of manufacturing assets (referring to core industries) will go up in value because of lack of new projects and depreciation of rupee
- He believes that he is buying an asset today not for what it is earning today but what it could be earning 5 years later and so not bothered on quarterly basis
- Companies with 15-20% growth, 20-25% return on capital, good corporate governance and low debt profile will command premium valuations
- Doesn’t check his portfolio holdings on daily basis and more concerned about Portfolio Company’s business performance than market valuations because if the company performs the stock will ultimately deliver good returns
- He believes that US will not stop QE and Ben Bernanke is confusing the markets. The quantum of QE may be lowered but won’t be stopped any sooner.
Despite the fact that we have highlighted key points, we would suggest you to hear his views in his own words in the above video.