Vijay Kedia said he never bought companies such as Coal India, REC and ITC but he has no regrets, even as it was a bad choice. He said he bought two IT stocks after Covid-19 that delivered him multibagger returns in two years Smallcap investing being a bottom-up story is rewarding but at times frustrating. Returns don't come by easily even after two-three years of investments, leaving investors with dilemma of whether to wait for the story to play out or cut exposure to the stock altogether. Seasoned investor Vijay Kedia says as long as the investor is in the sunrise industry, he should not be bothered much. This is even as his cost of acquisition was high and the stock has not deliver returns for some time. That is because Kedia believes one should stay in the sunrise industry at any cost. So, as long as one believes the "sun is rising" and the story is intact, Kedia said one should stay put.
"Sometimes Sun is under clouds. This is the stock market. You are never 100 per cent right. Even if you are 50-60 per cent right in this market, that's enough," Kedia said.
IT stocks Kedia exited
Kedia said he never bought companies such as Coal India, REC or ITC but has no regrets, even as it was a bad choice. He said he bought two IT stocks after Covid-19 namely Intellect Design and NIIT and the stocks delivered him multibagger returns in a span of two years.
But 12-18 months ago, Kedia decided to exit those counters. "For me, the theme was over, at least for the two companies. There are exceptions as well. Stocks in IT sector such as Persistent Systems and Cyient are still trading at record high levels. If I find the story in my companies to have plateaued or the growth has stagnant for 2-3 years, I would exit," he told Udayan Mukherjee, the Global Business Editor at India Today Group.
Pharma stock & patience
Shareholding data showed Kedia has been holding on to a pharma stock Neuland Laboratories via Kedia Securities since December quarter of 2019. During this period, the stock has had a rollercoaster ride. Kedia bought the stock when it was in the Rs 300-400 range. The stock went from Rs 300-odd levels to Rs 2,700 level and from there to Rs 1,000 levels only to rebound and hit record highs now.
"This is how your patience is tested in this market," Kedia said.
Temptation to sell shares
Kedia said he is not averse to banking and NBFC stocks and that he had bought shares of Canara Bank a year ago. But Kedia said he does not keep on holding such stocks, which are highly liquid in the market.
“Whatever little bit of money that I have made in the market is because of the illiquidity in my stocks. That stops me from selling when the market is down. If I believe the market is going to fall 10 per cent, I won’t be able to resist my temptation to sell,” he said.