Top investor Porinju Veliyath says that the current composition of stock market includes 10% bulls, 20% bears and 70% monkeys.
The traditionally thought metaphors of ‘bulls’ and ‘bears’ in stock market are only a minority, as Porinju Veliyath says monkeys make up the highest percentage. Explaining the current composition of the markets, Porinju Veliyath, MD of Equity Intelligence India said, “ The other day I was talking about the current composition of market players. We have 10% bulls, 20% bears and 70% monkeys. This is an opportunity for the first 10%. This composition changes with time.” Decoding the investor psyche in the stock market currently, the Kochi-based portfolio manager says that investors in India miss the ‘big picture’ while investing for the long term.
“Investors should not feel that equity investing is just secluded, wherein you look at the charts to buy and sell, that’s a very low end activity. Long-term investors who want to create wealth by investing in equities must look at a lot of things. Politics, the social structure, the changing landscape of the economy, the structural changes, how the corporate world is changing, the frauds, whether they are coming down or not. There are ‘n’ number of factors to consider, ” said the expert. Speaking about the prospects of PSU banks, post the mega reform, Porinju Veliyath said that there’s no clarity in the space. “I will not be doing anything in PSU banks, because I have better things to do in life,” he quipped.
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Porinju Veliyath is known for spotting small-cap multibaggers. He had spotted names such as Wockhardt, Orient Paper, Kitex Garments, Force Motors and Biocon, which have multiplied many times over since he spotted them. Many of these stocks still form a part of his over Rs 1,000 crore portfolio. In an interview to ET Now, Porinju Veliyath had predicted Samvat 2074 to be a comeback year for two small-cap laggards.
“Two companies which I mentioned earlier also haven’t performed yet. From the railway segment, Texmaco Rail and Titagarh Wagons. One is around Rs 2,000 crore market-cap. TWL is around Rs 1,500 crore market-cap. Strong balance sheet and execution capabilities. I think investors should really watch these two companies in 2074, for reasonable gains, not multi-baggers I would say,” Porinju Veliyath told the channel last month.