Vikas Khemani, Founder, Carnelian Capital Advisors, says he does not see a situation where markets are going to correct in a meaningful manner, unless something unpredictable happens, which nobody can make out and which will always be around the corner. So, taking money off the table for the sake of it is not a great idea. “Remaining invested in the market at this point in time, is one of the best advice one can give.”
I have heard a new term called Lakshmi Asan and you will be demonstrating Lakshmi Asan. Everybody in the stock market believes in Lakshmi Asan. So, tell us more about this.
I think you are good at that. You tell people how to make money.
No, we are the ones who propagate risk management but you are the practitioners. We are the messengers and that is the difference. It is the practitioner who has to tell us the secret of Lakshmi Asan, not the messenger. Only Lakshmi Asana. We should be invested in India. You will make lots of money.
Is yoga early in the morning a daily ritual?
Yes, I think we do yoga exercise three days a week and then three days of meditation.
And what about the seventh day?
Either running or something else or lazy Sunday.
Just drawing the connection. I am sure yoga brings about some benefit to your style of investing as well. Ever since you have been practicing yoga, I am sure things have changed in the way you have become an investor as well.
Absolutely. There is no doubt about that. Yoga and meditation go hand in hand. If you can do a combination of that, it basically brings calmness in your mind, fitness in your body and alertness in your body and mind. It definitely builds an all-round perspective. I feel everybody must do it. Also, it leads towards spirituality.
Most of the successful investors will tell you that a tinge of spirituality or insight into spirituality always takes your level to the next level in anything and especially in investing. So, yoga, meditation and spirituality are all interconnected. If you follow regularly, it will make an impact whether you are investing or doing anything else.
Which is that stock that you would want to flag where you would have had more patience, made more money and any error or mistake that you would want to highlight?
I would stay away from commenting on stock specific things. But I can only say that many times, markets test your patience. One of my largest moneymaker eventually ended up becoming a 100 bagger. So, the market tests your patience on many counts and if you are self-assured about your own analysis, about your own work you can stay put in those times and probably yoga and meditation helps in trying times to stay put and not get panicky and get carried away by that.
It is easy to keep patience but the other thing that a lot of market participants fail to do is stay away from FOMO. The fear of missing out is quite large and that is visible in the market now. What would be your advice around that?
I would say that if you act out of FOMO, you are bound to suffer and lose like it happened during the new tech euphoria. Everybody was participating in that and we all know what has happened. Time and again, the market oscillates between fear and greed and so when markets are fearful, nobody wants to buy.
But as the market turns around and things are doing well, everybody feels FOMO and people jump in and that takes you to the other side. The reality is that most of the unqualified or uninformed investors end up riding into the late stage of the euphoria and that is where they end up losing money. So, people should not participate out of FOMO. Market gives enough time, enough opportunity to everybody, every investor and there is a huge amount of money to be made through different sorts of styles.
So, FOMO is one I always tell investors to avoid. We never got any of the internet or new tech stocks throughout the whole euphoria. Money making and retaining money are two different things and one has to keep money also.
We are 10 points away from all-time high on the Sensex, 15 points away from an all-time high on the Sensex, which is one yoga asana which will depict the real picture? In my book, that will be Tadasana?
That is a real stretch….
Tadasana will be the best and it will keep touching higher and higher. It is like this: if a kid does Tadasana, its height keeps on increasing. It helps in increasing height. So, I guess our market's height will keep on increasing. We are still adolescent, we have a long way to become an adult and a mature man. Indian market is in one of its best phases and I see a great runway of creating wealth ahead of us over the next five to seven or ten years. Next decade belongs to India.
Indian markets, after a gap of nearly six months, have hit a new high. Now it's a formality whether the Sensex hit a new high first or the Nifty did. But benchmark indices look at that ring when you say that markets are at an all-time high. Let us hear that ring from you.
You do not have to do everything. Just stay. If you are interested, just enjoy it. India is just a reflection of one more milestone, according to me. I really do not get excited every day but it is great news in that sense. It is more vindication but in my opinion a lot more to come.
Everybody in the stock market should now innovate something like Lakshmi Asan. I am sure you will not do that Sunday break also. This asan, you will be happy to do it seven days a week, right?
But why should one not be tempted to log gains? It has been a good run up – 10% on the Sensex, 15% on the Nifty, 25 to 30% in average midcap stock. It is logical to book some profits and take some chips off the table.
If you take chips off the table, what will you do with it? Unless you need something like when you will invest somewhere else. So taking chips off the table for the sake of it, is not a great idea unless the market is not going to do well and is going to correct, which at least I do not think is likely.
In the short to medium term, I see a great run coming ahead of us led by liquidity. Of course, corporate earnings cycle is good but we will see massive flows coming from FIIs. In the last two years, they sold close to $40-45 billion. As the interest rates peak out, emerging markets begin to get that flow and India will receive a disproportionately large amount of that flow this time.
As that money comes in, everything will be the same, markets will do well. I do not see a situation where markets are going to correct in a meaningful manner, unless something unpredictable happens, which nobody can make out and which will always be around the corner. So, taking money off the table for the sake of it is not a great idea. Remaining invested in markets at this point in time, in my opinion, is one of the best advice one can give.