Investors too positive; one should recognise risk in this very big bull market: S Naren

economictimes.indiatimes.com:

S Naren, ED & CIO, ICICI Prudential AMC, says “more than valuation, I would be more worried about sentiment that people are just too positive and we have always seen that when people are too negative, it is a very good period to invest and when people are too positive, it is a time to be more circumspect.”

What is the sense that you are getting about the market?
S Naren: We are at an all-time high. Just now, we have reached an all-time high. So, it is a very special feeling.

You must have so many market highs in your entire span of career which I cannot even fit in one conversation. But we have seen these type of market highs earlier as well. Where do you think the market is as per valuation because India right now is at a very bright spot as compared to the other economies definitely. Is valuation a red flag in certain areas for you?
S Naren: Clearly valuation in largecaps is more comfortable than midcaps and smallcaps and microcaps. More than valuation, sentiment is the problem because India is one of the most structural stories over the next decade. So, it is a sentiment which is more worrying that people are much more positive particularly on the direct equity side and derivative side. So, more than valuation, I would be more worried about sentiment that people are just too positive and we have always seen that when people are too negative, it is a very good period to invest and when people are too positive, it is a time to be more circumspect.

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