I believe the bottom is in place and we are probably in a new bull market. In an interview with MintGenie, Vijay Kedia, Managing Director, Kedia Securities Pvt Ltd explains how the stock market is a place to make the easiest money in the hardest way.
The market has been moving sideways for some time. It has not breached the 17,700 mark. Can we safely say that it has hit the top for the time being?
I don't know about the top, but in my view, we have made the bottom. I have dug the data of the last two decades and observed that after 2003 bull markets are becoming longer and bear markets are shorter. First time in the history of stock markets, in 2003, the bull market lasted for more than four to five years.
And despite the Lehman bros crisis, which was like one in several decades, the market bottomed out within nine months. The same thing happened when Covid-19 came, which was again once in a century kind of crisis, the market bottomed out in nine months. Therefore, I believe the bottom is in place and we are probably in a new bull market.
Metal and power continue to be the top performing sectors for the past few months. What is driving the growth of these stocks?
Metals have turned soft after a steep rise last year although still higher than two years back, which is very good for the economy. For the simple reason, that metal producers are say 10 but consumers say 90. If metal rises exceptionally, it means that the majority of industries face a crisis. In the current scenario, everyone makes a decent profit which is good for all. This is good for all investors concerned.
As far as the power sector is concerned, India’s annual power demand which grew four per cent during 2017 - 2022 is likely to double and grow 7.2 per cent annually during 2022-2027.
The number of Demat accounts has doubled since 2020. Apart, PF and NPS money is also pouring into the stock market. How much time more before DIIs overtake the FIIs as buyers instead of remaining just jobbers in the market?
The stage is set; the game has begun as the DIIs are leading. The FIIs’ sales of $30 billion worth of stocks have been digested by DIIs in the last 15 months and FIIs just bought $6 billion back and the index is near ATH. What does it say? It says what did not happen in 30 years of history of FIIs, has started happening now. In times to come, people will stop talking about the FIIs’ daily buying and selling figures as they are becoming irrelevant.
You keep saying “One share can change your life”. Which is that one share that you think will create wealth for those willing to accumulate and hold for the coming decade?
It is very difficult to name the share now. I keep on changing my portfolio every 10 years. Now my major portfolio consists of technology shares such as telecom product manufacturing companies, E-commerce companies, leisure and holiday companies and capital goods companies. They should turn out to be multibaggers.
Only two per cent of people make wealth out of the stock market. What sets them apart from other investors?
They don’t understand my quotes. if they understand and follow some of my quotes, the ratio will change. Some of my quotes are
“Stock market is a place to make the easiest money in the hardest way.”
“If you are smoking you may die in 20-30 years but in future trading, you may die the next day.”
“Rome was not built in a day but Hiroshima and Nagasaki were destroyed in a day.”
“Chase the story behind the stock, not the money on the table. Money will make you rich, but the story will make you wealthy.”
“Regret is a lifestyle disease of equity investing.” Etc.
A lot of talk of Indian markets getting decoupled from global markets. What's your view on this?
It may decouple but the process won’t be fast because ultimately every country is connected in some way or another. Maybe, a few sectors will decouple in a big way and few not and a few may suffer badly.
Could you tell us one trait of Rakesh Jhunjhunwala’s investing behaviour that you admire?
In my view, the most important thing in wealth creation is courage more than money and knowledge. Money and knowledge can be hired but you need to have the courage to die to see heaven. He had that kind of courage. He was not a big bull but a rare lion.