tweet buster: Tweet Buster: Cyclicals vs Coffee Can portfolio; the risk factor in IPOs and NFOs

As BSE’s crackdown on smallcaps and penny stocks hogged limelight last week, largecaps were back in focus. While both the midcap and smallcap indices ended in the red, Sensex ended over 2% higher to touch fresh record highs. Most analysts say traders should focus more on largecaps as the rally in broader market seems to be taking a pause. In this edition of Tweet Buster, we scan through the world of 280 characters to spot money-making opportunities and the do’s and don’ts of investing in a bull market.

Cyclicals vs Coffee Cans

PMS fund manager Shyam Sekhar said in the battle between cycles (cyclicals) & coffee cans (portfolio), cycles have a history of kicking the cans down the road. “You should know (how) to play the cycle. Ride it smartly. And, go to safety before the party ends. The can will stay where it is and can be picked up later. No disrespect to either.”

Time to ditch FMCG?

Sekhar said FMCG stocks look expensive to him right now. “I have bought FMCG stocks before. I will certainly buy them again. But, right now, they look expensive to me. When I get more value for the buck, I will surely look at them. Blindsided investing is not my idea of investing,” he said.

Risk factor

Amid the rush for IPOs and NFOs, DSP Mutual Fund’s Kalpen Parekh reminded investors that IPOs are nothing but stocks and NFOs are nothing but funds that invest in stocks. “The risk is exactly the same. That of equities and stocks as an asset class. There are good NFOs and good IPOs, just like good stocks and good existing funds. And vice versa too,” he said.

Re-rating candidate

Value investor Safir Anand gave out five reasons why deserves to be re-valued given valuations – profitability, diversification beyond pizzas (Biryani, Chinese), more user interface, rights outside India and a tested cash flow model.

Laregcap picks

Among largecaps, Anand is bullish on SBI, , ICICI Bank and HDFC Bank. “This excludes IT. I continue to dislike autos, infra,” he said.

Capex boom

Independent market expert Sandip Sabharwal said as significant capital expenditures are being announced by companies across the board, the capital goods sector should see a good phase in the next two years. “Also a space that is under-owned due to years of underperformance. The challenge is to find stocks at reasonable valuations,” he said.