I focus on themes and companies that may not be popular, but have potential. In 2003, when the infrastructure theme was gaining momentum, I realised that the valuations for power stocks were cheap, but were being ignored. We recommended stocks of ABB, Siemens, Bhel, Cummins and Tata Power, and were proved right when ABB's share price rose from Rs 250 to Rs 4,800, in 2007.
Cardinal rule for investors
Buy low and sell high. It sounds simple, but investors find it difficult to implement it. Mostly, they begin investing when the froth starts to build. The key principles: invest in companies with strong fundamentals and quality management, and do it at the right price.
There is a gradual realisation that one should invest in the stock market for long-term wealth creation. The investor base has enhanced substantially in the past few years.
Opinion about current valuations
At 17,500, the Sensex is fairly valued and the markets are showing intrinsic strength. If the monsoons don't play truant, the Sensex may scale 20,000 this year, but a weak monsoon could take the Sensex to 14,500-15,000.We expect the Sensex to hit 25,000 levels in two years.
Rajen Shah is Chief Investment Officer, Angel Broking
An engineer by qualification, Rajen Shah's foray into the stock market in 1989 had him hooked. The hobby turned into full-time profession in 1996, when a Gujarat-based media company requested him to bring out a 20-page stock market-related newspaper. In 2000, he joined Angel Broking to set up the company’s research wing.
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