'Stay invested in the stock market, everything is for the long haul'

Veteran value investor Ramesh Damani is ignoring doomsday warnings about a US tech stock correction and noises surrounding corporate earnings growth trajectory back home, staying loyal instead to his credo of long-term investments, using a bottom -up approach. He remains unconcerned about short term market corrections, advising investors to

- Ram Sahgal & Satish John

“remain invested” and benefit from the power of compounding. Damani notes that domestic liquidity is more than enough to absorb any selling from forcign portfolio investors (FPIs). He believes that when FPIs return to the market, a “melt-up” could occur, thanks to domestic buying. Edited excerpts:

What are your takeaways from the earnings? What are you picking?

Luckily, I don't look at broad macros like GDP, inflation etc. which impact earnings; I look at my stocks bottom -up, and I generally have a mixed bag. Some have reported very good earnings, or some have reported disappointing earnings, for whatever reason, may be because of rupee depreciation, or because of the US slowdown. But overall, the market seems okay. Liquidity is good; visibility is decent. So, on the whole, my advice to most people is to remain invested. There's obviously a lot of fear going on that the US markets are likely to fall, but that’s been there for three years. I mean, we can't live our lives in fear all the time. We buy good companies, good businesses, and remain invested in them, which is what we're doing, right?

You said there were some laggards and some outperformer s. What’s worked for you?

I don't have any commodity-based companies, but some of the defence stocks did pretty well. I was happy with the numbers that came out. A couple of auto ancillary and engineering companies also did well. Some of the media stocks didn't do very well. I don't have as much exposure to IT stocks anymore.

But overall, I expect good and bad numbers. I don't expect uniformly good numbers or bad numbers, because I'm putting more money through, you know. So, I'm willing to take a longer view than most people, and unlike most people, I don't sell when a bad quarter (earnings) comes.

So, you're there for the long haul?