Days of making easy money over; investors can keep 8-10% in cash: Aniruddha Sarkar
Aniruddha Sarkar, Chief Investment Officer & Portfolio Manager, Quest Investment Advisors, points out that valuations have become very rich across the board in the market. So, it has become very important not to get into companies where there is big froth. Look for companies with a mismatch of valuation and the underlying value. Within that, the easy part of the money has been made. In the last 24 to 36 months. all of us have made money in the market, some have made more, some have made less but the easy money has gone.
Sarkar says that while he is keeping 4-5% cash, investors can keep more than 8% to 10% cash because he does not see any major correction in the market.
You have been in the quest of outperformance or alpha. How have the last few months been for you – challenging or okay? You have navigated comfortably because the clamour for a massive correction is getting louder, but have you raised your cash levels? How are you approaching this?
Aniruddha Sarkar: The last couple of months have not been very easy for all of us in the market and typically, what happens is when the markets are volatile, that is when the real test of a portfolio happens. Thankfully in the last couple of months, amid elections, budget, whatever is happening in Bangladesh, what is happening in the rest of the world, in the Middle East, our portfolios have done well and that is because we have been trying to focus on very few sectors, looking at companies within those sectors where earnings are supporting the valuations.
One concern in
