Is volatility going to be the name of the game in 2024? Anurag Singh answers

Anurag Singh, Managing Partner, Ansid Capital, says “we should be a little fearful that a bull case and a soft landing has become pretty much a consensus case and that is exactly when trouble strikes. We do not know from which pocket it will come, but the market does not have too much appetite for bad news because it is already discounting the rate cuts starting March, April. So, we will have to be mindful.”

What do you believe is really going to be the call for the year ahead given that across the globe, we will be mapping out 40 elections. But that aside, how do you see the overall sentiment shaping up for the year ahead? Is volatility going to be the name of the game?
Anurag Singh: We are at a point where everything is almost richly valued. So, it is very hard to find value. Of course, in the US, there are pockets of value. Indian markets are very richly valued across the board. So, yes, the year, at least if I talk in terms of US markets, I think what we are focussed on is trying to park money towards the Russell 2000 stocks which are more of the midcap, smallcap stocks or S&P 600 stocks, plus the financials and consumer discretionary which did not have a good run.

We all should be mindful that just about seven stocks contributed to about 80% of the rally last year, except for the last two months which were pretty broad-based. I think that is where the value is and today if we saw a bit of a glimpse that some money is moving out, at least at the ETF level money would move out from Nasdaq more towards these S&P 500, S&P 600 or Russell 2000 value-based stocks, that is where we are. It is not very easy to find value. It is richly valued and you will have to struggle a bit. That is the broad thesis.


Is it too early to assume that the macros are reversing in the world?
Anurag Singh: Yes, that is where we are stuck. I think it has become and we should be a little fearful that a bull case and a soft landing has become pretty much a consensus case and that is exactly when trouble strikes. We do not know from which pocket it will come, but the market does not have too much appetite for bad news because it is already discounting the rate cuts starting March, April. So, we will have to be mindful.

But on the face of it, it looks like there is no apparent risk, at least not to the US economy and the Federal Reserve has a buffer, they are already at 5.5%. In case some trouble hits, they can always use that Fed put and come down and cut rates. So, at least in the US, there is no trouble on the horizon, at least which cannot be met with a Federal Reserve move. India is a different story and a bit of a different game really.