Don't exit Maruti; add on dips: Sandip Sabharwal | Economic Times

People should not look at exiting Maruti now because vis-à-vis the rest of the market, it still has reasonable value, says Sandip Sabharwal, analyst, asksandipsabharwal.com.Do you think Maruti has hit the break and the massive runup we had seen between 2017 and 2018 is going to be hard to repeat?Companies which are giving cautious outlook are getting punished by the market, Companies and managements which are coming out and giving a bullish outlook while operating in the same ecosystem are getting rewarded. So, that might not always be good for the long run. If this correction in Maruti continues, it will be an opportunity to get into it. Currently we are not holding Maruti but I am looking at it very closely and would look to buy it on further dips. People should not look at exiting now because vis-à-vis the rest of the market, it still has reasonable value.We saw a meltdown in Bitcoin, but it did not have any impact on other asset classes. We have seen colossal damage in some of the Chinese internet stocks and yet no other asset class or no other stock or ETF is feeling the pain. How do you explain this?When the entire cryptocurrency basket corrected significantly almost half from the top, I also felt that it would have a ripple effect on the other asset classes. But it hardly created a wave. As for the Chinese meltdown, the emerging markets index yesterday bounced 3% for this year just because of the kind of collapse we have seen in China. Indian markets are up 14-15% odd. So that is the scenario in which we are operating in today. Many of the Chinese internet companies have gone from multi year highs to multi year lows in a period of 15-20 days and that is the sheer volatility of the market. That happened because of the kind of liquidity that exists in this market and the liquidity generation has not stopped. The US Fed and the ECB and Bank of Japan keep creating further liquidity. At some stage, the economic marginal benefits of incremental money printing will not be felt and it could be a negative given the inflationary data. One part of negativity is already getting built up which is not yet reflected in many of the asset classes but might get reflected over the next few months.