Even as the domestic stock market barometer Sensex and Nifty closed in the red on Friday after fresh global sell-off dampened investor sentiment, Shyam Sekhar also known as Mr Contrarian, as his stock picking ideas are generally different from the prevailing market sentiment says that investors should avoid buying microfinance, housing finance companies and NBFCs in the current market.
“There has been a lot of indiscretion in the way we have institutionally procured midcap shares. So, one should be very careful in what we buy in the midcap space. I am basically very cautious on some parts and I have no hesitation in naming them. First, carbon stocks. Second, microfinance. Third, housing finance companies. Fourth, NBFCs. These are some of the spaces where I think one should be very careful,” Shyam Sekhar of iThought told ET Now.
So what exactly should the investors look to buy now? “Large cap, I am looking to buy one good metal stock. In the case of TISCO there is a rights issue I would like to where it stabilises post that dilution and you have SAIL so it is not very difficult to see where to choose, I have not bought much but I am still studying that so that I could scale up my position and use the volatility to buy into one metal stock,” Shyam Sekhar said in the same interview.
As the volatility continues to rise globally, causing investors to believe that a major crisis may be in offing similar to the one witnessed in 2008, Shyam Sekhar doesn’t see it as a crisis scenario. “I do not believe that this is 2008 because in 2008 the index was overvalued more extensively than it is today and if you look at what has happened to the index though the index PE looks amplified, you remove the private banks and then you look at the valuations on the index it does not look all that scary,” he told the channel.