Home Investment Products Stock Market Vijay Kedia: Risk se ishq hai! Vijay Kedia’s love affair with unpopular stocks

Vijay Kedia: Risk se ishq hai! Vijay Kedia’s love affair with unpopular stocks

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Vijay Kedia: Risk se ishq hai! Vijay Kedia’s love affair with unpopular stocks
It is a bonus to me when the inventory isn’t in style and no one is aware of about it. I can’t advocate these shares as they could be dangerous, says Vijay Kedia, MD, Kedia Securities

What would be the dominant theme or the dominant emotion for 2021?
It is rather troublesome to evaluate how 2021 goes to pan out, however I’m totally invested and I can sense that the market is admittedly euphoric however it isn’t that the primary time we’re seeing this euphoria. In my profession of 25-30 years, I’ve seen many cases of euphoria available in the market and that’s a part of the sport. The one factor is when the climate is windy, then you must deal with your cap! That is the precept I’m making use of on this market. I’m attempting to spend money on shares which may be known as all-weather shares, regardless of euphoria or gloom.

For long-term traders, the most effective technique could be to stay invested on this market however after all one must be cautious. Cautious is a phrase which all the time flows with each investor available in the market however that is part of the sport.

In certainly one of your tweets you had mentioned that there are three feelings available in the market — cautious, fearful and cheerful. How would you want to use them?
I’m cautious and fearful on a regular basis. If you end up investing available in the market, you have no idea what will occur tomorrow, like we by no means predicted what will occur in March and we by no means knew additionally that there could be this V-shaped rally. So, I’m all the time cautious and fearful. I’m doing yoga and meditation and am attempting to be cheerful each time. So, all these three issues are going collectively however after all for the brand new traders who’re becoming a member of the occasion now, they need to be fearful because the market isn’t low-cost.

When you say that the climate is windy and it’s essential watch out, then why are you totally invested?
Suppose Titan will get a sense that gold costs are going to crash $500 from right here, do you assume Titan will promote its shops or will they promote all its gold within the shops? No, they may proceed to do their enterprise, whether or not gold value falls $500 or it goes up $500. They may attempt to stability their threat to be within the sport. That is what I’m additionally attempting to do. I’m attempting to spend money on all-weather shares.

When earnings restoration occurs in 2021 or second half of 2022, do you assume these costs are unlikely to maneuver larger as a result of markets have already priced in earnings restoration?
It depends upon what sort of restoration you’re anticipating in your portfolio. In case your visibility is for FY21 or FY22, then actually it’s there within the value but when your visibility is past FY22, say for FY23 or FY24 or FY25, then you can see worth in lots of pockets.

Additionally, when you examine the value available in the market from March lows, then you’ll actually discover shares to be very costly as a result of many shares have gone up by 10 or 12 or 5 instances. However when you examine – -I’m speaking about midcaps and small caps –from their 2018 and 2019 lows, then you can see that there’s nonetheless worth in lots of pockets. There are lots of midcaps that are nonetheless low-cost in comparison with their worth — not simply from their ‘18 and ‘19 comparability however from their basic perspective. You would possibly get worth in lots of pockets however one must be fearful and cheerful on this market.

What sort of market do you assume we may very well be gazing within the subsequent two or three years? Proper now, the flavour is PSU and tech. What sort of market do you assume we may very well be gazing when it comes to a method and when it comes to a sample?
I’m altering my portfolio somewhat bit and investing into tech shares and product- primarily based know-how firms. It might be from IT or from telecom or from whichever space the product primarily based know-how has come. I’m balancing my portfolio and promoting some previous shares and investing into these new tech shares. That doesn’t imply that different shares wouldn’t rise or client shares or cyclicals wouldn’t rise.

What are you promoting?

I’ve diminished my holdings in a few of the previous shares and that we’ve mentioned earlier additionally. I’ve diminished my holding a bit in Sudarshan Chemical compounds and Timken.

Why are you product-based firms as a result of India doesn’t have a star on this house to this point.
The job of an investor is to spend money on the seed. When you enter the inventory when the story is out, then what’s the enjoyable? When any firm develops a product, it takes 5 to 7 to 10 years to get the acceptance within the worldwide market. It takes 5 to 10 years and billions of {dollars} after which additionally you aren’t certain whether or not your product shall be accepted or not. There have been Indian firms that are creating these merchandise for the final 5 to 10 years and the product which may very well be accepted or would want say billions of {dollars} have been truly developed in India. Because the whole world is altering, all enterprises are going for digitisation, their time has come. Their merchandise usually are not inferior to these produced by Fortune 500 firms and they have their power and their area of interest due to the decrease value of growth.

Since everyone goes for digitisation and everyone can’t afford to deploy the product of Fortune 500 firms, they need to search for the businesses that are giving the identical product at an inexpensive value. There lies the chance for Indian firms.

In accordance with public info you have got made a big funding in Tejas Networks. You purchased into Tejas when the market opinion is in opposition to it and the enterprise goes by a ache level. What provides you the boldness?
Inform me one firm in India which spends 10% of their income yearly in R&D. Tejas is one such firm. It isn’t a name in any respect or a suggestion. I purchased at Rs 45-50 as much as Rs 60. I can’t say at Rs 110 or Rs 120 or Rs 130, go and purchase Tejas. Please do your homework. What made me make investments on this firm is that 10% of R&D spent is yr on yr and to this point they’ve invested greater than Rs 1,000 crore of their R&D. In June or July. the inventory was obtainable at a market cap of Rs 400-500 crore and the corporate has Rs 300 crore money within the financial institution they usually have developed a product. It takes time to develop a product if you must compete with Nokia or Ericsson or Huawei, which is what Tejas is doing.

Now that this product has been developed and it’s utilized in fibre to dwelling and 3G, 4G and 5G. They’ve good technical information and are competing with all Fortune 500, Fortune 50 firms on the planet. Due to their atmanirbhar theme, I believe their time has come and that’s the reason I’ve purchased the shares.

I could also be incorrect, however one must be available in the market.

One marquee funding out of your secure has been Vaibhav World. Once you invested virtually four-five years in the past, it was Vaibhav Gems, a jewelry exporter. Now they’re a platform firm. Did you see this coming?
I’m not a visionary. I can’t see what is occurring one kilometre forward from the place I’m. I can see possibly 10 meters or 15 meters with a torch and so once I transfer ahead to see 20 meters or 30 meters or 10 meters, then I get to see 10 meters additional. So once I invested in Vaibhav World, they’d a platform however that platform was TV solely. They might make their merchandise right here in Jaipur jewelleries and promote within the USA on TV channels. They’ve their very own channel. However when the pattern modified, from TV, they converted to on-line promoting and OTT promoting, cellular promoting and no matter digital platform is obtainable on the planet.

Once I invested they had been solely within the USA. Later they switched to the UK additionally. Now two-third or possibly 60-65% gross sales are coming from the USA and the remaining the UK. So think about an Indian firm from Jaipur promoting a product within the USA, it isn’t a joke. Earlier, they didn’t carry out nicely. They carried out nicely however they rose they usually fell they usually learnt from their mistake.

Once I purchased the Vaibhav World shares, their gross sales had been round Rs 1,000 crore and the closest competitor, QVC, had gross sales of round Rs 80,000 crore. It match into my precept that you simply attempt to hunt fish within the ocean, not a crocodile within the pond. I believed the market alternative is large and promoters should have learnt plenty of lesson from their falls up to now and by chance it’s working.

Be it Sudarshan Chemical or Vaibhav World or Atul Auto, the shares the place you have got traditionally invested, usually are not tracked by brokerages. They don’t seem to be the entrance league shares. Is there a specific framework that you do not need to purchase largecap shares or shares that are tracked by the brokerages or have an excessive amount of public view on them?
Sure I’m merely making use of my SMILE system which is small in measurement, medium in expertise, giant in aspiration and additional giant market potential. Since this system has labored for me within the final 10-15 years, I’m okay with this. It is a bonus to me when the inventory isn’t in style and no one is aware of about it. So each time I make investments and if I speak to folks my buddies, they don’t imagine what this firm is doing and what are they into. Then they search and say
aarey yeh toh bakwas hai, aarey yeh to chor hai, aarey yeh to yeh hai aur woh hai (It’s all garbage). The identical sample is occurring right here and I’m utilizing that sample to my benefit.

I really feel that probabilities of multiplying your cash in an unpopular inventory is immense. You will get your amount as much as no matter urge for food you have got, So you may get the shares and get them low-cost and in response to my restricted knowledge, they’re straightforward to grasp. I can’t perceive an organization like Larsen & Toubro.

That’s the reason I’m investing in all these unpopular, untouched shares and, after all, I’m taking a threat. There’s a nice threat and so I’m not recommending, I’m not telling everyone that you simply go and spend money on such firms as a result of this may very well be deadly. It is rather dangerous however
lakin abhi kya kare, apne ko toh threat se ishq hai (I can’t assist it, I’m in love with threat).

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