After the domestic stock markets rebounded on Wednesday, ace small cap stock picker Porinju Veliyath and Shankar Sharma are now looking at the space with heightened interest. In an interview to CNBC TV18, Porinju Veliyath said that the correction is small and midcap stocks is overdone and the space should give higher returns going forward. According to Porinju, all the negative news is already priced in, and he’s bullish on the markets from now.
Yesterday, Shankar Sharma said that he’s not interested in big names such as ICICI Bank, Axis Bank or even IndusInd Bank, but is looking at the smallcap space with keen interest. So where exactly is he looking to create wealth? “Anything which is commodity is looking good because that is a space that will do very well. All your industrial metals, oil related stocks, chemicals and speciality chemicals will do well. I really like the whole complex. In this debris of the market, that is the space which will give you very good returns and remember in a bear market, not everything falls,” he noted.
Shankar Sharma noted that a severe bear market is needed for creating serious wealth. According to him, the next few months will provide lots of interesting opportunities. “So if you are smart for the next few months time I think you will get some amazing opportunities. You need to have a lot of guts and I think that will build the foundation for a reasonable portfolio four, five years out,” he said.
Meanwhile, Porinju said that it’s time to watch buybacks and earnings very closely. “Time to keep an eye on buy-backs and creeping acquisition. After the price correction, panic & extreme pessimism, what remains is the recovery. This is not the end of equities. Many companies are expected to report impressive numbers, as per AGM reports & ground level facts,” Porinju Veliyath tweeted.