원문 보기
there is mayhem on the last Street second circuit second lower circuit for the second time in in about ten days the question is what should one do now I'm serious market dislocations caused reflexively hurt the financial stability as well so what to do in a time like this rom the overall of multi-level Financial Services joins us right now on the show to talk about that mr.
Grewal good having you thanks much for taking the time out and speaking to us at Bloomberg Quint promoter when when people announce buybacks they believe that there is not just the business sentiment that is pricing in rock bottom but also economic sentiment that might come around you have done this is this a sign that you believe that the prices are factoring in the worst yeah I mean if not it has factored in in the days to come clearly I mean this reminds me of my experience in 289 and 2092 so I have seen in by 35 years 3 this size delusion they say that Corrections of this type which is once in a decade current situation and in second decade this is the one and we are facing right now so clearly price and value correlation will will break down in the sense that price will go well below the value underlying value and the value is best understood by the owners of the businesses and when we say we will pass a buyback resolution it's an enabling resolution and because you cannot just go and buy buy back your shares so we have enabled resolution unfortunately there is a 20% tax so I can pay 20% lower price than the price I could have paid otherwise so anyway I think now starting in all the companies I think you will see price definitely touching value and probably even lower than hmm how how are you determining this value is terrible and just not just for your company but I'm just asking market wide because when when these dislocations happen and I've heard a lot of people say that this is something that is a bit of an unprecedented event because we don't have a template for this in the past at least in the last 20 years so how are you judging what's happening the market right now and what could happen are two economy and markets going at in the next three months no there is a template in the sense that this is not about coronavirus or lockdown or anything like that this is about the fear and and fear as I said three times I mean like in 2008 there was a massive fear about the world coming to an end because of the global credit crisis and mortgage crisis in US and so I mean of course the reason underlying will be different in 2000 it was a dot-com bust in 92 it was the hearse amitabh collapse so these things do happen and the framework is that of how do you handle fear because there are only two emotions in the stock market it is greed and fear right now clearly market is in the grip of intense fear can it become even more intense that it's a unknown territory I mean now you can go by the what has happened in the past when worse has been in 2008/9 when it went down by 65% and again valuations where we're even now valuations were almost same as that was in 2008 9 and us mother of all the markets they also they are predicted almost 1.8 times to GDP before the collapse look everybody was saying that collapse had to happen nobody knew it is going to happen because of the health reasons coronavirus and those kind of things but ultimately the impact is not because of Gordon Juarez here it is about the second impact that is the impact on the businesses and the damage to the franchises or the business per se that's the fear in the stock market now airlines are sure hotel such a tourism assured now all the automobile companies are shutting also I mean of course this is for two three months or maybe a few weeks here there but market our market is compounding sorry extrapolating machine they market says I don't know what is gonna happen next month or the month after that it is for the investors to figure out but today I am extrapolating whatever is happening now well into the future that happens in optimism agreed and that is what gives the grid and right now now downtown is being extrapolated so that is out of fear you reckon mr.
Aggarwal that concurrent shocks concurrent demand in supply shocks at the same time can actually take the prices lower I mean 2008 in that sense was it slightly different than what the current situation is or would you believe it's an Apple to Apple comparison no no no never it is Apple to Apple comparison particularly the backdrop in which it is happening is very different one there is a use social media you have by the minute you are connected to the world in 200 also you are connected but now more so with the whatsapp internet internet on the phone I think everybody is like there is no big difference between whether you are in u.s.
or here you're just talking to everybody so seamless global connectivity with social media around so that's a big difference and second is a reason underlying in the sense that it was a straight business issue banking issue this time is started with the health and now the health is giving kind of birth to business issues I mean where if you I mean if there was only coronavirus and the world was functioning the crazy thing about coronavirus is the solution which is found is the most primitive right now but there's no there is no vaccine or there is no antidote so they are saying that just lock down the whole world not even City and you might have seen in China was locked down so still we made a new high in the world I mean you has made a new high despite China was locked down when it is struggling spreading to Iran and more putting it le Europe and if they started knocking the door in u.s.
then all the hell broke loose so it's all about fear of end of the world and that behind that what is the story that will always be different of course so let me ask this to you almost everybody is using this statement right now that when the when your own house is on you don't bother about the outhouse the foreign flows which are well going out yes will they take a really long time to come back and if that is to happen mr.
Kerbel whenever this issue ends we do it we can't quite climate so I'm not asking you to time it but whenever this issue ends will the money take time to come back because India - in arc in all probability will see economic dislocations we don't quite know how worse this situation will get in India for now it's contained what we don't know if this will spread let me tell you the stock prices are not made by a buyer or seller because for every byte there is a seller and for every cell there is a buyer the colour of buyer and seller could be different if a fire were selling the companies are buying a Chennai's are buying promised to mutual funds are buying a license buying insurance companies are buying so there is always you know buyers and sellers the stock price goes down despite buyers and sellers be in equilibrium is a fact that there is an opinion the negative opinion so today's opinion will make today's price tomorrow's open make tomorrow's price if the world is fearful today and we don't know whether tomorrow it will reverse all for some some reason it will reverse it will reverse for sure one day I don't know what is that day is that then I'm quite sure there'll be 3 2 or 3 10% of circuit and you will not get the stock I mean you bring all the that is a 5 money domestic money you will not get that stuff today you ask 100000 you get a million so today the seller it is buyer's market at some point of time to become completely seller's market so the best time to buy is when it is a buyers market it is a deeply buyers market and if you know the underlying value of the company that ok if it is if I am planning any company and and if it say like say Motilal solid I mean I have the benefit of having a company which in this state but please don't think it has anything I'm just giving an example the my company's own Book value set to 40 to 30 to 30 rupees now the stock is coding it about 500 or whatever I don't know I have not seen the price today but it might be some pride now what is the underlying value and what is the franchise value this is that what is the earnings power of the company for any company irrespective the name I think what on a network it can earn if you keep it simple if you if it can earn say risk-free ten percent I would say price-to-book one if a company I mean even after I'm quite sure kourin eyes and not end up the world in three months six months one and whatever okay I think we'll just try and repatched that feed with mr.
Agarwal but they will be interesting to know what is his thought about whether this is time-bound or otherwise and then talk or more about what was happening within the country as well and how could we look at Indian investments we continue this discussion after this very very short trade a car
Comments 0