Stock market veteran Raamdeo Agrawal is of the firm belief that corporate earnings will play a key role in guiding the stock markets next year. In an interview with ET Now, Raamdeo Agrawal of Motilal Oswal Asset Management company said, “Corporate earnings could play a key role in the market movement for 2018.” He also predicted the capital expenditure cycle to get better in the coming year. On being asked about the state of the economy, Raamdeo Agrawal said the economic recovery may be slow in 2018, but it will be a prolonged affair. Sharing his market outlook for the coming year, he said the first half of 2018 will witness a massive fundraising exercise. He also expected the rising crude prices to pose an intermediate challenge in 2018. Stocks in the capital markets have outperformed the economy, he said. “Nobody can forecast markets correctly, yet we waste so much time doing it,” said Raamdeo Agrawal.
A few days back, the market expert also told ET Now his secret of making money in stocks. He advised the significance of diversification saying that while there may be many stocks which turn out to be multi-baggers, a few stocks will end up punishing the investors. “In 20 positions, some stocks will be reasonable, some you’ll also be punished. My experience is that one-third will disappoint you, one-third go as per plan, and one-third end up surprising you. Those surprises more than take care of the disappointments. Since the picks are good companies, the disappointments are marginal, around 5-10%,” Raamdeo Agrawal had said. “We make money in stocks because disappointments can be x, while surprises can be multiple x,” he added.
Earlier in the month, the market veteran in an interview to CNBC TV18 had also advised investors to hold onto compounders to create long-term wealth. “This is after two and a half months kind of study, so, one of the things about investing and making a lot of money in the market is that you need compounders and India produces a lot of compounders like HDFC Bank, HDFC, Infosys.” According to the co-founder of Motilal Oswal Financial Services, investors trying to time the markets could end up with poor returns.