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Invest in companies which invest their capital conservatively: Uday Kotak advice

After receiving an enormous hammering over the last week, the Indian stock market rebounded strongly on Friday. The Nifty gained 1.57%, the Sensex gained 1.53%, and all sector indices closed on a green note. The Sensex and Nifty 50 accelerated by almost 1% last week following a strong uptrend stance, but experts claim that the upcoming week is expected to remain volatile and will track global cues such as IIP data scheduled for release on March 10, performance of global indices and US markets, concern over aggressive policy tightening by the US Federal Reserve (the Fed), rupee trend, FIIs flows, F&O Cues, and so on. Amid the volatile market, Uday Kotak CEO of Kotak Mahindra Bank has suggested investors invest in businesses which invest their capital conservatively.

Uday Kotak spoke about buffet nuggets through a Tweet and suggested 3 key investment advice for the investors. “Buffet nuggets: 1. Think of equity investing as buying businesses in their entirety, not as buying stocks. 2. Look to invest in businesses which invest their capital conservatively and which seek to exist forever. 3. Avoid impatient people and impatient companies,” said Uday Kotak through a Tweet.

“Addition: look for the businesses that are self financing I.e working on a negative working capital cycle . Those companies always have low assets and become a fountain of dividends in the later stages. That is a characteristic of a great businesses,” wrote one user.

“US treasury earned USD 32 Trillion in last decade 48% coming from individual IT while corp tax is mere 8 1/2%. India Copr tax at 25% while HNW 37%. So Individuals can make money by investing in good companies. He is a genius but admits he made mistakes earlier. Paytm must be one,” commented one another on the post of Uday Kotak.

“But how it is possible when 90% of public has become Fno gambler,stocks move 5-50% in one day,take kotak stock it is hovering around 1750 since ages now,these so called option writers have made investment in equity as joke,imagine companies posting solid number are beaten badly,” wrote another user.

On February 8th, the Monetary Policy Committee (MPC) announced a 25 basis point hike in the repo rate to 6.5%. On February 1, the Federal Reserve hiked its benchmark interest rate by 25 basis points, or 0.25 percent, to 4.75 percent. 

The chief executive of Kotak Mahindra Bank, Uday Kotak, predicts more interest rates are likely. In a Tweet, Uday Kotak recently said that “Global central bank balance sheets take huge losses as they bought long term bonds and de facto printed money. Who pays? Sovereign.Signs of sticky inflation in US. More interest rate hikes likely. And higher for longer. Remember airplane turbulence? Fasten seat belts worldwide!.”

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