Sensex could touch 19000 this year: Rakesh Jhunjhunwala, partner, Rare Enterprise

[B. Karthick]

The market is likely to consolidate at these levels for some time, but
the Sensex could touch 19000 and the Nifty 6000 before the year ends,
says Rakesh Jhunjhunwala, partner, Rare Enterprise. There are plenty
of opportunities despite the sharp run-up in prices. Excerpts:

Where do you think we stand as far as the markets are concerned?

We stand in a fluid state because markets (Nifty) have had a
tremendous rise from 2700-2500 to 4700, and then corrected back to
4200-4300. And there's no question that the economic scenario
worldwide is still not out of the woods.

After such a big rise, markets need to consolidate. I don't think
we're going to make any major move either way prior to the Budget,
unless things internationally take an ugly turn, or there's a big
upswing. We'll get the real direction post-Budget and depending on how
things develop internationally. So, I'd say fluid. I won't rule out
Nifty going to 5200-5300. At the same, I won't rule out it coming back
to 3700.

Let's take the conversation slightly backwards. From March 9 is
roughly when global markets bottomed out. How have things looked?
Oversold to overbought ? Or do you think a 10% movement here or there
perhaps, and we would stabilise over a long-term basis.

I am hopeful that we would stabilise at 10% upwards or downwards.
Either we have a bear market, which will last long and will correct
the rise from 2900 to 21000. It will take a lot of time, or this fall
was just a long-term correction of the bull market.

I think this year at some point, you'll have the Nifty around 6000 and
the Sensex around 19000, though the situation is fluid and it could go
either way. Maybe a year later, you'll move upward and go above 6000.
Or we could come back to a level of say 3200-3700, and then you spend
2-3 years, consolidate and then the market moves.

You got to be cherry-picking now. Time has gone. Low-hanging fruits
have been plucked. If you miss March, April, May, you got to think,
look back and then perhaps start cherrypicking...

I wouldn't say that. There could still be a lot of cherry-picking
opportunities. Well, it's not my work to advise people in individual
investments. But generally, I feel there are a lot of opportunities in
the markets.

You have two sides Rakesh. It's rare to find the combination of a
perfect trader and a great investor. Let's look at both the sides.
What is the investor in you telling you and what is the trader inside
you indicating?

Well, the investor inside me is telling me that markets are going to
consolidate more than anything else. The market needs reason to break
or to go up, right? More reasons, right? Or more external data which
is favourable or critical. As an investor, I have no doubt about
India's long-term growth story and the growth rates. I have all my
wealth in Indian equity. And I think it will remain that way.

Last time when we interacted, you had indicated that you pretty much
have investments across the board. Is that still your mantra? Be
diversified and you've got investments which are spread across
sectors?

Yeah. I have largely not changed my investments. They are the same.

Things are foggy for real estate and IT. What's your sense, not purely
on stock prices, but on earnings and your assessment? Let's start with
real estate. We can endlessly argue on both the sides that demand
could come back. Some would say demand could never come back. They are
leveraged companies.

Well I would like to stay away from real estate.

It's a long story. They can't get those lands back to those prices and
I don't think they can have those kind of margins. They are not used
to paying taxes. You sell to associate companies and there is profit.
I can't understand all this. So it is better to stay away.

I don't know where the real-estate people want to raise money.
Everybody wants to raise money to buy distress assets. So, a person
who has distress assets is raising money to buy distress assets. I
don't know why...About technology, I think it's going to be neither a
very bullish sector, nor a bearish one.

It's one of the defensive sectors. But I think shortly the performance
of these companies - and this is my assessment and I don't have a very
good assessment, it's just my impression - will be better than what
people are predicting.

What is the one investment you really feel proud of when you look
back? That really could be called as your favourite stock pick. I just
want to understand how did you pick it?

No. The best is still to come. If you are trying to identify which is
your favourite investment, it is like you are trying to say who do I
love better - my daughter or my son.

But just on a relative basis. What I'm curious to understand is how do
you identify themes and how do you identify ideas?

I think, may be, Titan is one of the finest investments I have made.