Be careful when you buy stocks, don’t be an Abhimanyu of D-St

Stay busy measuring your risk-taking ability or simply keep counting money: the choice is yours. Veteran stock investor Basant Maheshwari believes the bull market is here to stay and is far from any risk of a crash.

However, he advised investors to pick quality stocks and don’t become the Abhimanyu of Dalal Street.

When a car is in momentum and your foot is on the accelerator and the road is clear, do not try to put on the breaks very early, says Maheshwari. The message is clear: one should stay invested and not panic just because the indices have hit levels that were never seen before.

ALSO READ: Basant Maheshwari tells you how to be a midcap champion

The Nifty50 crossed the psychologically important 10,000 mark and closed above it on Wednesday. The Sensex, too, hit a fresh lifetime high powered by unabated capital flows amid optimism over quarterly earnings.

In a chat with ET NOW, Maheshwari said the ongoing rally is picking up steam and has started discounting the outcome of the general election in 2019.

Investors who believe the market is looking expensive after the recent runup may end up abandoning the bus too early.

In a bull market one must understand that things will be expensive and if they are not expensive, then it is not a bull market, said Maheshwari.

There is a problem with midcap and smallcap investors who try to become champions in a bull market. But they tend to get stock with their investment and become Abhimanyus.

It is easier to get in, but difficult to get out. In the Mahabharata, there was this story of Abhimanyu who was smart and could get in, but could not come out.

Investor should understand that they should pick quality stocks even in a bull market to ensure that they do not end up becoming the Abhimanyu of Dalal Street.

“You have to become the Arjun of Mahabharata. A standard format is: you buy quality names and stay with them. I would not suggest going randomly and picking up midcaps and smallcaps and trying to find out the next turnaround company. One out of every five stocks may turn around, but maybe you would be buying the other four and not the fifth one, which has just turned around,” Maheshwari said.

At present, Maheshwari is holding the recently-listed Avenue Supermart and is already counting the money that he is likely to make in this stock. “We are super bullish on Avenue Supermart and at least over the next one or two years,” he said.