Why Equity and How to Identify Leaders of Tomorrow

In the first episode of our webinar series, “Crystal Gazing Next Decade of Wealth Creation”, we hosted Mr. Hiren Ved Co-founder & CIO, Alchemy Capital on – Why Equity and How to Identify Leaders of Tomorrow.

The last 4-5 years have brought many disruptions & technology is one of the biggest disruptive factors. The FANG companies ( Facebook, Amazon, Netflix, Google ) is a great example. Leaders of tomorrow as per Mr. Hiren Ved have nothing to do with small, mid, or large-cap, but to identify what will create huge wealth over the next decade. Broadly, he covered 4 categories where he foresees the leaders of tomorrow should emerge from.

1) Science and Technology Businesses

2) Internet & E-commerce Businesses

3) Platform Businesses

4) Brands

In all of these four categories, he discussed lots of companies as examples to explain how and what context some of these businesses could be Leaders of Tomorrow. Hiren also rightly advised investors – to not approach Equity with fear or greed, but, with wisdom and discipline. He explained 2 types of risks. Being aware of these risks is important. And, staying away from equity markets is not the solution, but being aware of some risks, taking them knowingly, and staying away from some risk is the solution.

Risk 1: Volatility

The Risk that is be assumed and not to be worried:

• Investors should not really worried about large market risks.

• Quality may lose value for a temporary time

• Volatility is part of the time

• Equity Investors should learn to live with a Temporary fall in value.

Risk 2: Lack of quality in the portfolio

This is the Risk to Focus on : –

• This is what leads to permanent loss of capital (E.g RCOM, Unitech etc)

• This should be understood. Investors should stay away from this risk.

Market Views: –

▪ The correction which may happen now will not be as severe as March 2020 as then, there were a lot of uncertainties which is not the case now.

▪ Markets may fall but few companies will not follow much.

▪ Looking at index and then trying to invest is not a good strategy as you may lose out on many opportunities.