Excellent philosophy Sumit. I am sure it will do great.
Investing in SME sector requires real confidence in one’s own analysis (I largely invest in SME sector only). I prefer that for the following reasons:
- Unlike earlier days when information was not readily available, now information is easily available even about SME companies.
- When a widely known stock is looking undervalued, most probably it is because market knows something I don’t know. I have experienced these in many value stocks like DHFL, ITNL.
When a SME stock is undervalued, it is more likely to be a value pick. - New developing sectors start in SME only… We have Macfos, the first electronic e com operator, Anlon technology- the first listed service provider to airports, Zeal Global- the first listed GSSA… And we can give many examples. Probably I love to analyse new businesses, and try to guess it’s competitive advantage.
- Theoretically, small stocks does better than index in long run.
- Further volatility is higher, and thus we get more opportunity to buy at discounted price.
Thus, to an entrepreneur investors, SME does give a good opportunity. Once these stocks are recognised by market or bigger HNIs, it gives good return.
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