​​​
  1. Porinju’s tip: Discount sale in stock market till March; ‘rare opportunity’ to buy solid shares cheap

Porinju’s tip: Discount sale in stock market till March; ‘rare opportunity’ to buy solid shares cheap

While the recent correction and rising volatility has spooked some investors, ace stock picker Porinju Veliyath advises market participants to use the rare opportunity and buy shares of solid businesses.

By: | Published: March 21, 2018 4:42 PM
Porinju Veliyath says a few valuable companies may be available at slightly expensive valuations. Porinju Veliyath points out that there might be good companies available at slightly expensive valuations of 30-40 times earnings, and such companies may never get cheaper. (Image: Reuters)

While the recent correction and rising volatility has spooked some investors, ace stock picker Porinju Veliyath advises market participants to use the rare opportunity and buy shares of solid businesses. Pornju said in a tweet that the current depression is a rare opportunity to part-own some of India’s solid businesses. The perennially bullish investor said that ‘Discount sale’ will not last beyond March.  “At least 20 million Indians are ready & waiting to invest in equities, for the first time. The current depression is a rare opportunity to part-own some of India’s solid businesses. Remember, ‘Discount Sale’ won’t be extended beyond March,” Porinju Veliyath tweeted.

Notably, the long-term capital gains tax on equities which was introduced in Union Budget 2018 also kicks off from April 1,2018. Its introduction had dampened the investor mood in February this year. While Porinju Veliyath has often advised investors to put their money into stocks of solid companies, he says that they must choose stocks very carefully.

In a recent interview to ET Now, the ace investor cautioned investors against investing in companies with poor corporate governance track record said that at least 25% of the listed players will out of business in the next 10 years. “For amateurs and new investors it may be difficult to invest in the markets. For them, it is safer to invest in companies with proven track record, with the big picture and how the companies going to shape up in the next 5-10 year period,” he told the channel.

The Sensex has shed close to 2%, wiping off 700 points since January-18, while the broader Nifty 50 has corrected by nearly 3% in the same period. Experts point out that the stock markets are likely to see heightened volatility due to domestic as well as global factors such as political scenario in India, increase in the 10-year US yields, rising crude oil prices and earnings downgrades. Saurabh Mukherjea of Ambit Capital says that he sees a 15% correction in largecap shares and about 30-40% correction in small and midcap stocks. Notably, the BSE MidCap index has lost more than 300 points in the last one month alone.

While investors may look for undervalued companies, Porinju Veliyath points out that there might be good companies available at slightly expensive valuations of 30-40 times earnings and such companies may never get cheaper. Further, Porinju Veliyath told in the same interview with ET Now that amid a 15-20% correction in the stock markets, these stocks may provide a good downside protection.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

  1. Govind Rajan
    Mar 21, 2018 at 6:14 pm
    The stock market investors of cur generation have not seen stock market down swings which is awaiting to happen in coming months. Last four years of upswing of indian stocks has been primarily due to a) crude price going down from 140 dollars in 2014 beginning to 60 dollars today, b) low cost foreign currencies USD and Euros flooding our markets and c) closure of other asset classes in india i.e, FD rates down by 200 bps and real estate has given negative returns in the last four years. All these are reversing and India is bound to see massive stock market corrections over the coming months. Political confusion and bank scams will only make that accelerate downwards.
    Reply

    Go to Top