Veteran investor Madhusudan Kela has given a clear message regarding the stock market. He says that now there is less possibility of getting fast and extraordinary returns from the market like before. In such a situation, investors should expect only 10 to 12 percent returns from the market every year in the coming times. He said in a program that volatility in the stock market has increased. But this should not be seen as fear. In his words, “Volatility is not the enemy, it is opportunity.”
There has been a lot of movement in the market in recent days. The budget came. India-America trade deal done. There was a sharp rise in gold and silver. There was selling in IT stocks regarding AI. Due to all these reasons, both rise and fall were seen in the market.
Madhusudan Kela says this movement creates real opportunities. They say that it is difficult to make big profits by following the crowd; Real opportunities arise when investors are able to think outside the crowd.
His focus is clear. Look for companies with strong and honest promoters. Maintain investment for the long term. He said that money increases with time. This is the power of compounding. He said it may be more beneficial to look for opportunities in select companies rather than benchmark indices.
He believes that large cap indices are now mature. Therefore, only limited returns can be obtained from them. The real opportunity may lie in smallcap and midcap companies. Especially those companies which can increase their profits with new technology like AI.
They talk about “Hidden Gems”. Companies and themes that are using AI applications to increase productivity and have the potential for margin expansion. Madhusudan Kela said that just as a “jockey” is important in the horse riding arena, similarly his leadership is also very important for the company. He says that it should be seen whether the person running the company is in focus or not. Can he survive tough times? Is he a long haul player?
He also praised Indian retail investors. Foreign investors were selling. But domestic investment through SIP continued. This provided support to the market. Today crores of Indians are looking at the stock market as a long-term investment. This is a big change. Earlier people considered the stock market speculative. Now it is being considered as a means of creating wealth.
Kela gave an example to explain the power of long-term investing. If a person invests Rs 11,000 every month in a mutual fund for 50 years, and the returns remain around the historical average, then in the long run this amount can reach Rs 100 crore. This shows the power of compounding.
Madhusudan Kela also admitted that there is concern about AI in the IT sector. Some people fear impact on jobs. But Kela believes that every new technology creates fear in the beginning. Later the same technology increases productivity. He believes that expansion of the Global Capability Center in India can compensate for the potential job losses in traditional outsourcing.
He said do not be hasty in IT shares. First there should be stability in earnings. His final message is clear. Have discipline. Don’t be afraid of ups and downs. Focus on the long term. Choose the right companies. Let time take its course.
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