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This upcycle will likely last five or six Diwalis: Udayan

Udayan Mukherjee of CNBC-TV18 said that retail investor had been coming back into the market after five or six years and added that a large section of investors who did not participate in the 2003-2007 bull run should now look to become a bit more courageous towards equities

Discussing how the markets are expected to perform over long haul, Udayan Mukherjee of CNBC-TV18 said that retail investor had been coming back (into the market) after five or six years and added that a large section of investors who did not participate in the 2003-2007 bull run should now look to become a bit more courageous towards equities.

“It is time to probably be a bit brave and position oneself for the next up cycle which probably will be the five or six Diwalis,” he said.

Below is the transcript of Udayan Mukherjee’s interview with CNBC-TV18’s Latha Venkatesh, Anuj Singhal and Sonia Shenoy.

Sonia: The market is up, a whopping 25 percent between last Diwali and now and more importantly the mood among retail investors has improved, something that we haven’t seen in a very long time?

A: It has really been a very nice ride from last Diwali onwards to this one and the significant point is what you just touched upon that this run up to the Diwali in some small sense has heralded the return of the retail investor to the market after a gap of full five or six years. All mutual fund managers will bear testimony to that that the first signs of them coming back to the market into this forgotten asset class is probably the high point or the big story of the market from last Diwali to this Diwali much more than the fact that we have had a 25 percent rally between those two points.

Let us see what happens now onwards because the conviction of the retail investor or the high net worth investor, the domestic investor would have been tested a little bit by the correction in October and these are usually the good testing points which tell you how strong conviction is in this bull run or this uptrend in the market that we have all been discussing.

So this Diwali is a good time for reflection and to sit back and take stock for a lot of people who have missed out and not participated yet because I believe there is a very large population of investors who were there in 2007 who have still not summoned up the courage to enter the equity markets and this correction that is happening right now is a good point for them to reflect on whether they should be upping their weightage on equities as an asset class once again. Some people have already done it but whether more should join the bandwagon right now and ride the wave to the next Diwali is a very important discussion point.

Latha: What would you one maxim or word of wisdom that you want to impart to our viewers on this Samavat 2071?

A: I would say just be a bit more courageous this time around, you have been in a shell for the last six years, we have played out our down cycle almost. We are probably in the last innings or beyond that of the down cycle. Everything changes, we usually move in six year or five year kind of cycles. It is time to probably be a bit brave and position oneself for the next up cycle which probably will be the five or six Diwalis. That is my expectation and that is the best I can say for people who are still not in the equity market.

We are probably passing through a few dark moments out here where conviction will get tested but the next five or six Diwalis could be, if not like 2003 – 2007, probably a very good time for investing and making money from the stock market. That is my expectation I keep my fingers crossed and I hope people participate and make a lot of money over the next five years for themselves.

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