Buy Stocks Lock, Stock & Barrel: Morgan Stanley Experts

Stock market analysts are normally circumspect about the state of the market. When they offer an opinion, they usually hedge it with a number of caveats so as to not to be caught on the wrong foot.

However, Ridham Desai, MD, and the other experts at Morgan Stanley are going the different path by advocating that investors should not wait for more correction but should start accumulating stocks now.

Ridham Desai is oozing optimism. “I am steadfastly bullish”, “this is just a correction in the bull market” and “it has given opportunity for those who got left out” he said. He also called it a “super opportunity for people to buy stocks”.

“I am very bullish, so I stay that way and these are corrections, they ought to be coming in every bull market …. this correction has flushed out a lot of big bulls, it has flushed out a lot of people with low conviction. So it has formed a nice base. We can never pinpoint where exactly it bottoms but people who buy stocks at these levels should be okay in a year or two” Ridham said.

Ridham added that private banks are in a “sweet spot” and that “We can’t get more bullish than what we are on private banks, we are very bullish. Some of the target prices we have on individual stocks suggest an upside of 40-50 percent over the next one year. It doesn’t get better than that”.

Ridham also advised investors to buy “bits of urban consumption whether it is in the auto sector, whether it is in media, whether it is in discretionary consumption, retail. Some of these are interesting sectors for the next few months”. He added that “I am convinced that the environment for the technology is not as bad as the share prices are suggesting and therefore technology also should do well”.

Ridham opined that the Index would touch about 32,500 by December and offer about 20% return. “Keeping the risk factors in mind, we think the markets should go up 20 per cent over the next 12 months, led largely by high earnings growth in the broader market” he said. He added that “In fact, you can expect high earnings growth in the next two quarters”.

Jonathan Garner echoed the same theme in his interview on the logic that the GDP could go up to 7% in FY17. “We have been ratcheting up our exposure to India now to quite a large overweight as the market has had a relatively poor year that is what we like to do, we like to buy low sell high and if our economics is correct that strategy should work quite well”.

Sanjay Shah went a step ahead. He advised investors not to worry about the crash in the markets but instead to “buy stocks lock, stock and barrel”. He advised investors to buy companies with strong balance sheet. “Buy growth, buy quality, buy strong balance sheets” he emphasized. “It is time to take your shopping bags out and go buy stocks” he exclaimed.