Alpha Moguls | Samit Vartak’s Advice To Investors Who Bought Stocks Cheap
Samit Vartak says inaction by investors sitting on gains after having invested at low levels may be wrong.
As markets hover around record highs, inaction by investors sitting on gains after having invested at low levels may be wrong, according to Samit Vartak of SageOne Investment Managers LLP.
They should not think about the purchase price and past laurels of a stock and, instead, reconstruct the portfolio as if they are investing afresh, the founding partner and chief investment officer of the investment management firm said on BloombergQuint’s Alpha Moguls. And investors should give the highest weight to a stock based on expected returns, he said.
SageOne’s own assets under management have surged fourfold in the past few years to about Rs 2,800 crore, but it continues to invest based on expected earnings growth. Vartak hunts for stocks that can compound earnings by 25% over the next three to four years and are available at reasonable valuations.
While Vartak expects some new-age businesses to do well, he advises that larger allocation should be towards companies that an investor understands firsthand. He prefers building materials and real estate.
Vartak is cautious on his erstwhile favourite: specialty chemicals. Too many people are bullish on this segment, and it’s difficult to gauge which companies would be temporarily impacted by supply-chain and raw-material issues.
Watch the full interaction here: