Weekly dossier: Gautam Shah, Sunil Singhania, Madhu Kela and others on markets, economy and the art of investing

The Indian market wound up the month of July with significant gains; the S&P BSE Sensex and Nifty50 rallied over 7 percent each in July.

Even as there are many negatives for the market at this juncture, it seems to have decided to focus on positives.

Better-than-expected Q1 earnings, doses of liquidity by governments and central banks and promising results of early phases vaccine trails are underpinning the sentiment.

Will the trend continue? How to invest in such a market? There are many such questions that one has to deal with at this juncture.

Eminent experts of the market, economy and investing dole out pearls of wisdom. Take a look:

Gautam Shah, Goldilocks Premium Research (to CNBC-TV18)

The market is disregarding any bad news so Nifty can move to around 11,600. We are seeing a banking-free rally after a long time and we believe the baton has passed from banking to technology.

IT services outperformance is going to continue over the next 6-12 months.

The metal sector is the dark horse and metals might do what autos have done in the last few months. We expect Nifty Metal to head to 2,700.

We expect the auto index to move towards 7,500 and then to the target of 7,800. We have been bullish on pharma and believe the index will hit 12,000 by 2020-end.

We see another 20-25 percent upside in Reliance Industries over the next 6 months. IT, pharma, metals and Reliance Industries are our key picks from Nifty.

Sunil Singhania, Founder of Abbakkus Asset Management (to CNBC-TV18)

Shopping and travel businesses will come back post-COVID-19. Move towards online has got accentuated with COVID-19.

Telecom is also a good play, given WFH and home entertainment.

FY21 earnings are going to be at least 20-25 percent lower so PE looks high.

PE ratio gives you a good indication of how cheap or expensive the market is. If you look one year forward, the PE does not look so expensive.

We are at a fair valuation today; not expensive and definitely not frothy.

The earlier you start investing the bigger the compounding effect. If you have a small sum of money, you should use the mutual fund or ETF.

A mutual fund will give you access to a basket of stocks with a small investment. I would advise using a SIP route to invest in mutual funds.

Kenneth Andrade, CIO, Old Bridge Capital Management

There will always be some worries in the market but we are getting back slowly. The recovery will be broad-based.

As we go forward, the next decade will not be a repeat of what we saw in the last decade. We are looking at reasonable weak macros, and India is probably will behave a lot like what happened in the 90s.

If we are right, it could well turn out to be a golden period of equity investors and corporate India. What happened in the 90s is that a lot of corporates turned their attention towards 100% of the world economy. And, we created large multinationals.

Naveen Kulkarni, Chief Investment Officer, Axis Securities

The biggest risk for the investors in the second half of 2020 is further lockdowns and challenges to economic recovery. The market is factoring in normalisation as the stock prices have moved up and valuations are breaching the long-term average levels.

However, localised lockdowns have continued which is preventing the economy from coming back to normal levels.

Also, the market is factoring in that vaccination will be available soon but it is difficult to figure the timelines and delays are likely.

So, the second half has significant risks posed from an operational perspective for economic activity.

Retail and Automobiles are high beta sectors that are likely to see a significant turnaround as the situation normalizes.

Retail should see improvement in traction as pent up demand will help while there could be an increase in demand in the auto sector as a preference for personal vehicles versus public transportation could be an interesting trend.

The outlook on financials continues to remain constructive. The HDFC Bank results indicated that the stress in the sector could be much lesser than expected and the sector could see a faster turnaround in the future.

Quality as a theme will continue to dominate. Auto as we indicated above will take time, but even in an automobile the two-wheeler and tractors continue to perform very well.

PVs are likely to pick up in the forthcoming quarters. So, financials are likely to gain traction and even in PVs, Maruti is likely to be a dark horse. CVs will take longer to revive and we maintain underweight outlook on CVs at this juncture.

Madhusudan Kela, market veteran (former Chief Investment Strategist of Reliance Capital) (to CNBC-TV18)

Investing is a very skillful job. It is not for any immature (person) who may think that someone will give me a tip and I will read some balance sheet and will be able to make money.

It requires years and years of commitment and experience and I am not saying that you need to be someone special to do it but you have to have first the commitment and the second thing is - this is not a job, this is passion, this is love, this is an addiction.

Even after so many years of experience, I am yet to comprehend how big an opportunity can be in the market at times.

It is so impossible to comprehend. Before you say how to identify, first of all, you have to be able to comprehend that this is the size of the opportunity, this is the size of excitement that we are talking about. This does not come every day, it may not come every year. Everyone gets it once in a few times in life that you are able to catch a really big idea. At that point in time, you have to make the most out of it.

The thing is - when you identify real stock and when you think it is a real winner, the question is - how much are you willing to put? You can borrow ideas, you cannot borrow conviction and your conviction in all these large ideas gets tested over a period of time.