Samir Arora, Founder & Fund Manager of Helios Capital, says while the market is delivering, same sectors are doing better and better and the ones that were doing badly are still not out of the woods. Excerpts from an interview with ETNow.


ET Now: The pet theme for everyone has been that there is a tsunami of local liquidity flow, which is coming into equities. The tide has turned, real estate is down, gold is not going anywhere and this is just the beginning of a retail equity cult.  

Samir Arora:  True, but I do not think that can be used to justify prices or the market going up. At the end of 2007, everything that you say should be good in the market was there. The currency was strong, FII flows were strong. domestic flows were strong, capital expenditure was high. And eight days later, the market had fallen about 10 per cent.  

There is pension fund money and mutual fund money, and all that is good. But generally, I am bullish, my net is very high, but I would not use this as an excuse beyond a point to say that the market cannot fall.  

ET Now: Do you think the best gains of this calendar year are behind us, because we have seen a trail blaze in moves. In dollar terms, the Nifty50 gains now are something like 20 per cent. Do you think a large part of the gains or projected gains for this calendar is behind us?  
Samir Arora:  
If you look at India versus markets in the rest of Asia, emerging markets or even Nasdaq, we are not very different. Most of the US stocks would be up more than 20 per cent this year. If we ask me what is the global issue, we do not know.  

All we know is that we are not going to correct broadly if the world does not correct. Therefore, we should look at what is happening in India, and not feel we are the only market that is going up.  

Also if you extend the period – who says that performance should be valued from December 31, 2016 – let’s say from October 30, 2016, then in November and December, the market fell 10 per cent or 9 per cent and also before that. Therefore if I look at it from November 30, in eight months the market is up approximately 10 per cent. What is the big deal? It is okay. It was always okay. The market seems to have done it in a very good way, but I am not satisfied and, therefore, now I must retire. I have this money converted into cash.  

But you have to be open-minded and we will be react when the world wants to react. You should broadly know what you like and what you do not like. Beyond that, do not pre-empt anything, because these things can go on for a long time. There is nothing wrong in that scenario.  

ET Now: So, are there new ponds to fish into or do you think the best strategy right now would be to just sit tight wherever you have been making money and ride the tide? 

Samir Arora: Actually, I have seen it is a very good strategy. There are two kinds of momentum in the market; one is of fundamentals and one is of the market or stock prices per se. Generally, what is doing well continues to do well till a point. But when it does not do well, you lose 5-10 per cent in a quarter or so. Look at GE. Under Jack Welch, GE did well for about 10-12 years, 15 years; Levers did well for about 10-15 years and they squeezed everything out. And then the new guy came, and the story was over for 5-10 years.