Mahesh Patil of Aditya Birla Sun Life MF says while there may be a temptation to sell stocks after they have achieved target price, holding on to winner stocks even beyond will provide value.
The market rally in 2017 may make a few investors jittery in holding onto winner stocks, as valuations may seems out of place. Top fund manager Mahesh Patil has a word of advice for such investors- hold on to winners. Commenting on the popular market adage, “Selling your winners and holding your losers is like cutting the flowers and watering the weeds,” Mahesh Patil of Aditya Birla Sun Life MF told ET Now, “In the markets, one always has a target price based on certain valuation parameters but we are not able to actually gauge how the future would hold for some of the good companies, they continue to do well and they might look expensive.”
The co-chief investment officer at Aditya Birla Sun Life MF advised investors to hold on to such stocks, as they may provide value. “There is always a temptation to really book profits in stocks once they reach a target price but as long as the compounding continues and as long as the companies continue to deliver, the compounding continues over a longer term as that will really create immense amount of value,” Mahesh Patil told the channel.
In the same interview, Mahesh Patil explained that he’s holding onto private sector banks. “Unless we see a material change in terms of our view on private sector banks, we see some margins under pressure or comparative intensity increasing because of PSU banks. We will continue to hold that. There is enough room for private banks to continue to gain market share despite the fact that PSU banks will be coming back into the market going forward,” Mahesh Patil observed.
Further, the fund manager is betting on a turnaround in the telecom sector. “Telecom is one sector where we have recently turned positive. That is a sector, still undergoing some kind of a pain. You will see one more quarter of pain in the telecom sector but that is a sector which over a longer term can come up as pricing environment improves, already consolidation we have seen that happening very faster than what we had expected earlier,” Mahesh Patil said.