Investors need to identify quality companies and invest in them from a long-term perspective and not sell the shares during periods of crisis, says Enam’s Manish Chokhani. Economy is poised to grow and consumption is bound to rise so investors need to have patience, he says.
“One has to be at the right place at the right time in the right economy… The companies that are coming to the markets now have a vision,” said Chokhani while highlighting the fact that promoters and entrepreneurs now continuously think of how to grow the company.
“Ultimately, we have to buy bottom up. Irrespective of what happens in the world, if you believe that a company will grow 4x in four years, then you will definitely buy the shares of the company. You will not bother what is happening in China or US. When the economy is poised to grow strong then consumption is bound to rise. Investors need to have patience,” added Chokhani while speaking at an event organised by Motilal Oswal Wealth.
The market veteran further said that well-known investors including Warren Buffett made the largest chunk of money from a concentrated portfolio of good companies though they also diversified to protect their wealth.
“You make money by concentration but you protect your wealth by diversification. The benefit of being a stock market investor is that you will have 15-20 stocks in your portfolio. All great investors have held onto their best bets and made money,” said Chokhani.
He further advised investors that one should always keep a specific amount of money aside that would take care of 2-3 years worth of expenses and should avoid leverage.
“India is a compounding machine and you only have to identify the best companies… risk taking ability of the country has gone up and new businesses are being created… look at the promoter and the opportunity,” said Chokhani while adding that it is the golden age for entrepreneurs in India.
“If you have a strong portfolio and if the stocks are not highly overpriced and you know the potential that the business will grow 3x or 4x in size, then even if the index falls, it should not make any difference to you. Do not be afraid of a market fall,” he said.
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