Use market rally to get out of smallcaps; don’t try to enter now: Ajay Srivastava

“Enjoy the upside but do not get into the market at the top of the surf. When you surf, you do not enter the top of it because you will go down. I would say stay put today and enjoy the weekend rather than buying,” says Ajay Srivastava, CEO, Dimensions Corporate

Nifty is back to 17,100. Are you betting on financials as the FIIs stage a comeback?
Well it would have been better for the Indians at least and for everybody to have this rally on a Friday morning but let’s be honest; it is like a typical market. It will get over priced and it will get over optimistic in the short run. That is what we are seeing today.

In a nutshell, I would just say one thing. It is a tricky market. This is not a market to buy at these highs. I certainly believe that no matter where the recovery comes through, this is not a market when you buy at highs and make a profit. You need to wait patiently. If you have not bought anything, you need to wait it out and see when you get the right entry point.


Fundamentally, the wage inflation has to come down and demand has to go down; fiscal deficit has to come down. The government has already reduced spending. Therefore we need to figure out whether we are buying based on income profit expansion or on PE expansion.

If it is the first one, perhaps you will have a better time to do this thing. If you are buying only for PE expansion, then you got to think like a trader. The only one segment I do not like at all irrespective of industry is the smallcaps.

Given the way the economy is growing, we are talking about a 7% growth rate. When the economy grows at 7% and the larger companies want to grow at close to double digits, there is no way the smallcaps can survive.

Our model is simple. Get out of smallcaps; it does not matter. There could be an odd good story. Remember you can get out of smallcaps only on a good day. So today is the day. Just hold your hands; I do not think it is worth buying in a market like today’s. Let the buoyancy come through and then you will have time to buy. There will be enough times to buy a stock from now till October. As we go into the festival season, remember patience is a virtue. Enjoy the upside but do not get into the market at the top of the surf. When you surf, you do not enter the top of it because you will go down. I would say stay put today and enjoy the weekend rather than buying.