We will see the greatest bull market ever after Sept: IIFL Sec

Warren Buffett is no longer the icon that he was; he has missed the greatest rally in history, says Sanjiv Bhasin, Executive Vice President.When do you see this action topping out or do you feel we are just getting started? That is where the opportunity lies. So IIFL Securities has taken the bull by the head. We were one of the few who very actively engaged with people and told them that this could be the time to change your icon. Warren Buffett is no longer the icon that he was. In fact, he was most bearish and still is and he has missed the greatest rally in history. So I will make no bones about it. Yes, this euphoria and the ground level will continue to be a discrepancy. Stock prices are not depicting what is on the ground level but the caveat here is what will happen once the vaccine and normalcy returns which slowly but surely we will. I am very-very positive after September. I can actually stick my neck out. Maybe after September, we will see the greatest bull market ever and that means that the broader market outperformance is something which you should be actually giving credence to because where did you see stocks double in the last three years; they were only underperformers. You will have to take it with a pinch of salt that yes, this proverbial noise is going to be there. Everyone is sitting at home but that is the opportunity the stock market is depicting. A vaccine could be the silver edge but I am very-very optimistic given that the broader market is outperforming. So yes, in three months we can see a test of maybe 9,500 but I will still stick my neck out and say 11,000 is coming in the month of July.We have been talking about the strength that one is seeing selectively in some of the two-wheeler makers. Do you think there is still an opportunity to buy into any of the two-wheeler names or for that matter an Escorts, VST Tillers, Swaraj Engines or even the big boy M&M?The stocks have run up a lot. You cannot argue from the lows but do not weigh them from the lows. Look at the underperformance you have seen from Hero Moto and Mahindra in the last two years. And that was all because of the BSIV-BSVI and some slowdown on the rural side and so on. Now the rural market is up and running. It is the best place to be. The crop has been good, the rural incomes have risen and you have got the lowest cost of subsidy and I think food is now going to be a huge supply given the government’s prerogatives. So I see no letup there. All I can suggest is that for the next 12 weeks, you should do a SIP including in Hero Moto and Mahindra but please add Eicher Motors. I think it can surprise on the upside in the next few quarters. Please add Exide because we know that batteries are the one which are going to be in demand and please add Motherson Sumi given that Europe’s flavour on the auto side has moved. So buying a basket of stocks even at expensive valuations may play out well because the market senses what is going to do well but you can always catch that through a good mutual fund. So autos and the discretionary side continue to be one of the best places to be. Telecom is the second one. Do not ignore cement and steel because we think the rebuilding and the reconstruction will start to add up in a very-very big way. So these three four big themes are there on the consumer discretionary side. Also you have seen the likes of Nestle tell where the sales are like. ITC has come out of a long hibernation and is seeing all its businesses except the hotels do extremely well and the valuations are still one-third of what Lever is. So there is a whole host of ideas. All you have to do is stick your neck out and start doing an SIP for the next 12-16 weeks. After September, if we are correct, then we could see a very-very good upside in the stock market over the next one or two years.

from Economic Times https://ift.tt/3im3WZv