INSUBCONTINENT EXCLUSIVE:
Going with the flow is no big deal
The real test is when you need to take your boat up the stream
This life mantra applies everywhere, even in the equity market.
Market mavens on Dalal Street enjoyed their good times over the past four
years and fetched good followers on social media when midcap and smallcap ideas were selling like hot cakes
Even since market sentiment turned jittery since the beginning of 2018 amid challenging macroeconomic headwinds, these same experts are
finding it difficult to generate alpha for investors.
For a difference, they are being honest and are admitting it
The Nifty Midcap100 and Smallcap100 indices are down up to 21 per cent from their respective highs hit in January 2018, while Nifty itself
is down 3 per cent to 10,768 as of June 7 from its high of 11,171 hit on January 29
Smallcap czar Porinju Veliyath, who shot to limelight in the last bull run aided by his bold and aggressive bets in the smallcap space, was
first to accept his wrong calls in a letter to his clients, after being caught unawares by the extent of value erosion in his portfolio
within a short period.
Last week, Ambit Capital acknowledged its worst buys and sell calls of past 12 months.
The brokerage said Tata Power,
calls, and some of these stocks have tumbled up to 40 per cent in last 12 months.
The financial services firm also accepted that D-Mart
Some of these stocks have since rallied up to 180 per cent.
With a 175 per cent jump, Jubilant FoodWorks is the best performing stock in
Mukherjea resigned last month after an eight-year stint
Market veteran Aveek Mitra, founder and chief adviser at Aveksat Financial Advisory, accepted his wrong calls in a tweet dated June 6
We invested in a few new stocks and kept a few where valuations seemed alright
Now a few of those are down from our advised levels
Liberty Shoes, Shalimar Paints, LEEL Electricals, Cimmco have slipped up to 53 per cent so far this calendar
LEEL Electricals has plunged to Rs 136.60 on June 7 from Rs 287.60 on January 1, whereas Cimmco has declined to Rs 72.90 from Rs 126.
His
about the underperformance in his PMS since January this year.
These mistakes do happen in the professional life of equity fund managers and
important: First, before investing largely in smallcap and microcap stocks, we professionals need to follow this strategy only for those
investors who can take very high risks
Also we need to ensure that their risk profile matches this kind of investment strategies
Secondly, before investing we need to ensure that management quality, balance sheet and valuations of these smallcap and microcap stocks are
