I do not think cryptocurrencies are in the category of viable investments. It is speculation you could play with it, have fun with it but do not consider it as an investment, says Mark Mobius, founder at Mobius Capital Partners.
Are markets secretly pricing in tapering whenever it starts?
Tapering was uppermost in the minds of people just a few weeks ago, and now it is fading into the background because there is a realisation that perhaps the Fed will take cognisance of this new variant of Covid and maybe will not tighten the screws as much as we expect.
If the Covid variant spreads, what happens then? How do you think markets would adjust?
Last year when this Covid situation hit, there was panic. The market came down dramatically but recovered very quickly. People have been hearing about Covid, a big disaster, big problems, and now they are beginning to say that the last time it was not so bad, the market did well. So why should I panic about this situation?
Yes, the new variant is highly contagious, but it is not necessarily fatal. In other words, the deaths so far are minimal. So you may find a situation where people will realise that this new variant is not as serious, but people will tend to not react as strongly as they did in the first panic.
Your India exposure was limited to three stocks. Have you made it four or five?
No, we are sticking with those stocks, and we are very happy with them. We continue to look at possibilities, but so far, we are not making any changes.
Any reason you opted for a Persistent and not a frontline name like TCS or Infosys?
Yes, the whole idea about the fund was to be different from the indices. The ETFs are instruments that many-many investors are using because they’re based on indices. So for us to offer anything different from what people now have is to do something where the index is not involved. We make a point of not investing in companies in the index.
In our portfolio of three stocks, maybe two are in an index and not the main index. So that is one of the overriding principles that we have in our portfolio. The second thing is that we want to go after medium and small-size companies, which people have not noticed.
People are not into the idea that these companies will grow. They will gradually recognise the value of the companies, of course, then prices will go up.
PolyCab and Apollo, two stocks you own, in a sense, are commodity consumers. At a time when we are seeing a re-rating in the commodity complex and companies are struggling with maintaining cost, does it make sense to bet on commodities, consumers and not producers?
Not necessarily. If you look at the two manufactures, yes, they are using steel and steel prices are up, but it is only one part of their overall cost.
The other part is labour and other aspects of manufacturing. So the impact on pricing is not that great.
The good news, in addition to that, is that with the power of quality they can get a premium price. They can raise prices without having too much of an impact on demand. It depends on the individual company.
You will find that many commodity consumers continue …….