Equity opportunity in Stock Market: Basant Maheshwari

If you are alive 60 days from now, you will regret losing the equity opportunity of March 2020, says Basant Maheshwari

You have to come out of your comfort zone if you want to accumulate wealth in the ongoing turmoil in the equity market, says Dalal Street veteran Basant Maheshwari.

Stock investors have lost in excess of Rs 50 lakh crore so far this year, as fears over the coronavirus pandemic triggered an unprecedented selloff in domestic equities.

Mumbai-based Maheshwari in his recent letter to investors said sitting on cash may give one peace of mind at this point, but no one has ever become successful operating from the comfort zone.

“The game right now is to wait for clarity, but as we have seen in the past, if you are waiting for clarity, then you will have to pay the price of clarity. People who stayed in cash in 2008 didn’t buy till the Sensex had doubled itself in 2009,” he said.

That bull run saw the emergence of multibaggers like Page Industries and Pantaloon, which surged up to 40 times in the next few years.

“In 60 days from now if we are alive, then we will regret the opportunity of March 2020. If we aren’t alive, there will be nothing to regret,” said the co-founder and partner of Basant Maheshwari Wealth Advisers.

So what’s going to happen 60 days hence?

Maheshwari visualizes three scenarios: a) the world will find a cure for coronavirus, or b) the world may control Covid-19 like China has done it. New cases are dropping in France, flattening in Iran and peaking in Italy. c) In the worst-case scenario, the disease would spread all over.

Maheshwari said in the best case scenario, the market will go up in circuits. “It won’t stop till it reaches an all-time high. It will discount the next two quarters as the post corona world heaves a sigh of relief. If having nothing to lose is the biggest advantage, for the enterprising, the greatest advantage is being able to live through this.

“The markets are currently discounting death. If we can find a cure for death, we will start celebrating life,” he said.

The market veteran believes if there is a slowdown post corona, then the markets will still rally. “It will rally just to celebrate to price in death with life. It will rally to tell investors that we are fine losing 2-3 quarters, but happy to be living. It will look ahead,” he said.

The market veteran advised investors not to lose this opportunity. “Corona won’t come again. And if it does, it wouldn’t matter if you had your money in stocks or had stuffed all of it under your mattress,” he said.