Disappointing to see Indian investors preferring gold and real estate over equities: Madhusudan Kela

In an interview with ET Now, Madhusudan Kela, Chief Investment Strategist, Reliance Capital, talks  about the factors influencing the markets and his trading bets. Excerpts: 

ET Now: You believe in three things -- bet, but bet big, always look at the size of the opportunity and buy company which has some kind of an competitive advantage. 

Madhusudan Kela: When I hear all these debates about bear markets, actually I now start closing my eyes because to my mind, this market provides such wonderful opportunity and it has provided such wonderful opportunity in the last three years. Actually, the job of an investor to my mind has been easy in the last three years than it was in the bull market because in the bull market, to make money, you are taking disproportionate risk.

So to answer your question, these companies will be there in plethora of sectors. I would hate to pick one sector. This is a 20-year learning. Just to illustrate the point again, auto sector has been going through a tremendous upswing in the last four years. You analyse the performance of all auto companies and the answer will lie there. If you invested in Eicher Motors versus in Escorts, just to name a company, there would have been a disproportionate difference in returns. So I am saying let us not pinpoint a sector. I told you the last time we interacted that there are two strategies -- touch me and touch me not. So from those touch me not areas is where we will have to pinpoint investing areas.

ET Now: Real estate is one touch me not which you are able to touch. 

Madhusudan Kela: Yes, but not the sector as a whole, but a few companies in that space. 

ET Now: Why do you like banks? I would imagine that when you say banks, the PSU banks are part of the touch me not category? 

Madhusudan Kela: Again, I would not categorise it fully. There are some PSU banks which may have gone through tremendous amount of restructuring... Sorry to digress a little bit, but one big thing which I have learnt as an investor in the last 20 years is people get biased positively or negatively. When they get biased negatively, they just close their eyes to any opportunity which is arising and when they get biased positively, they are unwilling to listen to any negative news. 

As an investor, I have learnt this -- never be biased, never close your eyes to any opportunity. So today when you tell me PSU banking space is a sector which will not be looked at, I will never ever consider that. I will again be in a look out mode within the PSU banking sector, i.e. which is the bank which has done aggressive provisioning in the last two-three years, which is the bank which is ready and which has relatively cleaner portfolio. So whenever that cycle turns, maybe that bank will lead this time versus the other banks. So there will be stock specific opportunities in all these sectors.