All of us are surprised, some are bewildered but everybody is scared now after the recent run up, given that we have not seen a correction. How are you managing money in this kind of a market?
That is the exact question everybody keeps asking all the time, at least the investors. They have seen this run up and some of them have been waiting for some correction to pick up stocks but that correction never came and they are in a bigger dilemma whether to enter the market now or not. We have been steadily advising investors — and we deal with long-term investors not with day traders — that if you like a stock and a stock has been recommended to you and you agree with that recommendation, just go and buy. Do not wait for the correction. Even if there is a correction intraday or for a period, when you believe in a stock, you know that stock is going to go up. So just do not try to time the market, just enter the market.
Coming back to the specific sectors or specific stock, we have been bullish on a few sectors and we continue to maintain our view there. We believe that the entire public sector spending, government spending is real and it has to happen. It is just a matter of time.
So construction, infrastructure, cement and related areas definitely deserve to be looked into and bought into. We have been recommending L&T for the last almost a year. It has seen some movement but I think it is just a trailer, there is a quite a lot of movement left.
The sum of parts in L&T is much bigger than the value we are getting from L&T today. The core business which is infrastructure, capital goods and construction are going to get a big leg up going forward. Some of these need to be looked at.
Other areas where we have been bullish for the last one and a half year, has been technology, IT in particular and we have seen what is happening in IT. There is still significant opportunity for this to move up even further from the current levels. There are a few other sectors or pockets.
In pharma and specialty chemicals, a multiyear rerating is going on but you need to be extremely stock specific because there are certain pricing pressures in the US as far as pharma and specialty chemicals are concerned. Prices have moved up quite a bit and one needs to be a little cautious while picking up specific stocks.
