Porinju Veliyath: Long & Short of Markets: Porinju opens up on value investing & a tough winter for richie-richs

Charlie Munger, one of the two titans of Berkshire Hathaway and Warren Buffett’s buddy, once said, “Big money is not in the buying or selling, but in the waiting.” Our own ‘Smallcap Czar’ Porinju Veliyath seems to have lived by this principle as he sat tight through the 2018-2020 bear cycle in the broader market when his portfolio bled. Now, the ace money manager believes the value cycle is beginning and may work wonders for value investors over in the next 2-3 years. Read this and more in this weekend’s edition of ‘Long & Short of Markets’.

Sleeping titans of Dalal Street
Hitting new all-time highs every other day, the blue chip index Nifty50 might appear overvalued but historic PE ratios indicates otherwise. The top 10 stocks by free-float market capitalisation have delivered a stellar return of 56 per cent against a 13 per cent return by the remaining 40, implying that the bottom 40 are trading at historic low PEs. Here’s more about Nifty’s valuation.
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‘Value’ vs ‘Growth’
In his first media interaction during the last few years, ‘Smallcap Czar’ Porinju Veliyath said the much needed alpha for value investors can be found in niche businesses and emerging companies. He believes valuation comfort can be found in the ignored pack of ‘smallcap blue chips’ in this bull run. Here’s the full interview.
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Commodities, stocks play see-saw
India Inc’s earnings have been beating Street estimates post lifting of the pandemic lockdowns and this is one of the main reasons for the recent bull run which has been the fastest recovery the market has ever seen. But a danger is lurking around the corner. Rising commodity prices could thin the margins due to rising input costs, says BofA’s Amish Shah. Read here for red flags that could undermine the bull run.
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Jan was too ‘cold’ for richie-richs
Top PMS managers like Basant Maheshwari, Saurabh Mukherjea, Bharat Shah and Shankar Sharma could not deliver positive returns in January, with some lagging their benchmarks by wide margins. The only ones who made money are those focused on the broader market. Here’s the PMS review for January.
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RBI’s invisible hand
Budget’s push for a massive fiscal spending shook the bond market as yields surged to 6.13 per cent post Budget Day. The soaring of borrowing costs would have burnt a bigger hole in the government’s pocket. But RBI’s direct and indirect intervention in the bond market has softened yields, pleasing both the government and the traders. Here’s the full story.
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