Prem Watsa is one of the most astute investors you will ever meet in your life. He is credited with having converted a measly sum of $8 into a fortune of $2B (Rs. 12k Cr).
What enables Prem Watsa to attain such incredible success is his keen sense of business. He knows which sectors are going to prosper. He buys the best stocks in the sector and holds them patiently till he gets the expected gains.
The news that Prem Watsa is likely to invest a sum of Rs. 950 crore for a 26% share in IIFL’s finance arm is a clear signal that Watsa expects the impending interest rate cuts to make the rate sensitive sector a profitable sector. Nirmal Jain, MD & CEO, India Infoline confirmed this news when he said “Prem Watsa is bullish on India and has been very supportive with both capital and strategic inputs“.
Another indication that the rate sensitive sector is the place to be in is provided by Mohnish Pabari. Mohnish recently broke his long-standing self-imposed exile from the Indian market to invest a huge fortune in three rate sensitive stocks – South Indian Bank, J&K Bank and GIC Housing.
In my view, the writing is on the wall and we cannot ignore it. We need to ensure that our portfolio is also top-heavy with rate sensitive stocks like Banks, NBFCs, Autos and real estate companies.
This way, when the interest rate cuts happen, we will not be caught napping.
If you are looking for stock ideas, you can turn to the recent recommendations of Nirmal Bang and other experts. Of course, it goes without saying that you have to familiarize yourself with all the risk factors and take an informed decision on your own.