How To Pick Stocks In Coronavirus-Marred Indian Markets? Mark Mobius Has A Formula
Mark Mobius is under no doubt that this is a good time to invest in Indian markets.
As markets recovered on Friday after declining for nearly a week, the next question is deciding on what to buy and assess stocks amid continued volatility, said the market veteran who has been bullish on India for some time now.
“What you have to do is pick your limits based on valuations and then stick with them,” the partner at Mobius Capital Partners LLP told BloombergQuint in an interview, suggesting that investors must look at businesses with strong financials and good management.
“We’re entering a period now where a lot of suppliers won’t be able to pay bills and a lot of companies will get into financial strife,” he said. “So, you have to pick companies that have strong balance sheets, companies that are able to pay dividends, and companies that have really solid management that can handle the crisis that we’re facing.”
Mobius prefers industrial stocks which are working on products for infrastructure building and are consumer-oriented. In previous interviews, he had said that these sectors are most likely to boom, given India’s demographics and the need to build better infrastructure.
When asked if he would invest in financial stocks that hit their 52-week lows, Mobius said that while he would give them a look, it’s likely that banks will see another round of high bad loans.
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“As shareholders, you can have a real problem going forward because these banks could be sitting on a lot of bad loans,” he said, suggesting that investors evaluate individual banks on the basis of their books.
WATCH | Mark Mobius On How To Pick Stocks In The Current Volatility