The philosophy at Kotak Mahindra AMC is to buy good businesses, run by good managers, and available at good price said Nilesh Shah, MD of the company.
"What are good businesses? Businesses, which over a business cycle will earn more than the cost of capital. Who are good managers? There is no thumb rule about good managers but experiences on the people who will not cheat with minority shareholders are by and large good managers.
People who have vision as well as execution capability are by and large good managers. What is good price? "You are not always lucky to get it at bargain price, but we believe in paying a fair price where you believe earnings growth will be higher than expectations of the market, then the price you are paying is generally having a fairness about it," he said in an interview to CNBC-TV18.
However, Shah said that with COVID-19 one must now look at companies, which are able to leverage digital ecosystem either to cut their costs or to expand their footprint.
According to Shah, there have never been such sharp bear and bull markets in a short span of time. He also added that fundamentals, flows and macros have come together to spur this rally. Shah believes that markets have also been triggered by fall in active COVID-19 cases.
Shah said that September quarter earnings were an eye-opener, but it is important to see if companies are able to sustain the September margins.
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