Buy­ing dips is bet­ter strat­egy than selling ral­lies: Da­mani

Mint ST - - GLOBAL -

What is your in­vest­ment style or les­son? Do you look for cor­po­rates with good gover­nance, or do you look for an un­der­ly­ing theme, such as a tail­wind in a par­tic­u­lar sec­tor? What is your mantra?

It is a mix of all this as you would imag­ine. Of course, you look for sec­tors that are go­ing to do well, you look for cor­po­rate gover­nance, but at the end, all great busi­nesses, all great in­vest­ments, boil down to the same thing—that you want to buy things which are cheap, and you want to buy things which are run by peo­ple of in­tegrity. A great busi­ness bought cheap is the best in­vest­ment ad­vice that I can still give. It has worked like a charm. You re­ally don’t need to do much. As War­ren Buf­fet has said this is not a very high IQ busi­ness. It is a busi­ness where you have to just think, read, un­der­stand and place your bet ac­cord­ingly. So, it is very clear.

For ex­am­ple, in In­dia, in the mid 90s, it was ex­pected that IT was go­ing to start do­ing well and sub­se­quent events have proved it right. In 1990’s, we knew eco­nomic lib­er­al­iza­tion was go­ing to be a dra­matic change that took place.

So lot of themes kind of pre­an­nounced them­selves and you have to have the faith and see where it takes us. There have been dis­ap­point­ments on the way, but that is part of the in­vest­ment game. So, all we still look at is to find great busi­nesses and val­u­a­tions we un­der­stand.

This whole eq­uity cult that we saw last year so much com­ing into mu­tual funds. If we had the kind of FII selling 5-6 years ago, the mar­ket would have col­lapsed, but this mar­ket stayed put be­cause of the do­mes­tic buy­ing sup­port. Do you think this eq­uity cult will be in­tact even through this volatil­ity?

I hope so, and I think it will be. It seems to me that the Dow fi­nally ap­pears very tired, the lead­er­ship has been un­der pres­sure, the FANG stocks have been un­der pres­sure. The yield curve is get­ting in­verted, and that sug­gest on­com­ing re­ces­sion.

Be­sides, there is talk of a trade war, which could be very damp­en­ing for the US, and there is gen­eral fear that the econ­omy is go­ing to go into re­ces­sion.

All this ben­e­fits us. So money moves out from de­vel­oped mar­kets to emerg­ing mar­kets. As in­ter­est rates rise in the US, trade war set­tles, I think we will be bet­ter placed. So, as long as oil re­mains around $60-70 per bar­rel, we will chug along.

I think the mar­ket’s fear of elec­tion un­cer­tainty is per­haps over placed. There is good chance that state elec­tions might dis­ap­point the mar­ket, but I think peo­ple will vote dif­fer­ently be­tween the state elec­tion and na­tional elec­tions. I think the mar­ket will over­come those sort of fears be­cause the coun­try it­self is in a sweet spot in terms of con­sump­tion, growth and de­mo­graph­ics.

So, I will not be par­tic­u­larly wary of this bull mar­ket end­ing. I would say that buy­ing the dips is a bet­ter strat­egy, than selling the ral­lies. The first Wiz­ard se­ries that you did was 10 years ago, where you fea­tured the likes of Rakesh Jhun­jhun­wala and Raamdeo Agrawal. Since then, you have come a long way. You are now not just the chair­man of D-mart, you are also a grand­fa­ther. You have seen such a long jour­ney. What is the one trait that you see in this new breed of suc­cess­ful fund man­agers that you have in­ter­viewed? What helps them wade through a lot of these murky times?

Just to put some per­spec­tive on what I am do­ing. You are right, the first se­ries I started with a won­der­ful pro­ducer, Nan­dini, who used to be with CNBC. We did Wiz­ards of Dalal Street. The peo­ple we pro­filed have all gone on to be­come gi­ants in their field. I am very proud of the fact that we have got them at a fairly nascent stage in their ca­reer.

Cou­ple of years back, with my pro­ducer Nimesh, we did a se­ries called Wiz­ard of Dalal Street, A Fresh Breeze. We tried to find some younger stal­warts who are go­ing to make a name for them­selves in the fu­ture.

What we thought was that two years after I did the ini­tial show, let me go back and re­visit them, how they are han­dling the tur­bu­lent time that 2018 was, what are the prom­ises for 2019 on­wards.

So, we are do­ing this con­tem­po­ra­ne­ously. We have done one show, we will do an­other cou­ple of shows over the next cou­ple of weeks. We will see how the later in­ter­view­ers speak of them­selves.

How­ever, gen­er­ally, I find, like I found on my ear­lier shows, that what dis­tin­guishes this batch and the older batch is sim­i­lar. It is the pas­sion they have for the mar­kets. I think they are all sur­prised that they get paid to in­vest in the mar­ket.

They would prob­a­bly do it for free any­way. It has been a great priv­i­lege to ac­tu­ally have seen some of the best minds in In­dia speak about some­thing they all love so pas­sion­ately. I am go­ing to give a shout out to my grand­son; as you men­tioned, it has been the great plea­sure of my life to play with him. So, thank you for men­tion­ing him.

Are there any themes pre-an­nounc­ing them­selves now? Quick ser­vice restau­rants?

That would be a good ex­am­ple of what I have been bet­ting on. Some of the stocks are still fairly cheaply val­ued. The sin stocks will prob­a­bly do well. The gam­ing stocks. PSU stocks.

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