ETMarkets Smart Talk | Scientific investing over social media tips: Vikas Gupta urges method over hype

In an property wherever banal tips are conscionable a scroll away, Dr. Vikas Gupta, CEO and Chief Investment Strategist astatine OmniScience Capital, makes a compelling lawsuit for ditching the sound and embracing a structured, evidence-based attack to investing.

In this exclusive ETMarkets Smart Talk, Gupta cautions investors against falling for hype-fueled recommendations from WhatsApp oregon Telegram groups, and alternatively advocates for his 'Scientific Investing Framework' — a disciplined method that filters retired superior destroyers, overvalued stocks, and low-growth companies.

He stresses that existent wealth creation lies not successful chasing trends but successful applying dependable fiscal principles consistently. Edited Excerpts –

Q) We are seeing immoderate volatile swings successful the markets, acknowledgment to the back-and-forth from Trump connected tariffs and present immoderate geopolitical concerns amid tensions betwixt India and Pakistan. How are you looking astatine each this?

A) The Trump Tariffs decidedly started a caller question of volatility successful the planetary markets. Interestingly, the Indian markets which were consistently seeing FII exits until Trump took over, started getting the FIIs backmost aft that.

Now the imaginable India-Pakistan warfare could initiate a caller circular of FII exits successful the abbreviated word erstwhile the warfare really starts. However, the betterment should beryllium beauteous quick.

We deliberation the tariffs are an accidental for India fixed the comparative tariff vantage betwixt China and India. An aboriginal indicator supporting this is the 100% displacement to India from China (by 2026) for US-destined iPhones announced recently.

Since Apple is simply a person known for its meticulousness and absorption connected quality, this determination should beryllium followed by a batch much companies taking the plunge.

On immoderate imaginable dip owed to a imaginable warfare betwixt India and Pakistan is apt to supply a short-lived accidental successful our opinion.

Q) It looks similar we person entered a low-interest-rate environment. What should the plus allocation strategy beryllium for an idiosyncratic successful the property bracket of 30–40 years?

A) Yes, India has entered a low-interest complaint situation and a fixed-income oriented allocation could extremity up being risky for idiosyncratic who has a “low risk” illustration astatine the property of 30-40.

For a 30-40 twelvemonth old, with nary near-term (<5 years) liabilities, no-debt, afloat security coverage, and unchangeable income, the “ideal” allocation is astir 100% equity aft creating a contingency money of 3 twelvemonth of surviving expenses.

If idiosyncratic is not capable to person the hazard tolerance to tolerate 30%-50% drops successful portfolio values and markets oregon portfolio values remaining down for 3-5 years, past they person to commencement with immoderate maximum equity allocation they tin tolerate and amended themselves and bid themselves to make higher tolerance implicit the years.

Because, fixed the apt aboriginal of debased involvement rates, agelong beingness cycles (close to 100) and escalating wellness attraction costs, adjacent post-retirement allocations would request important equity allocations truthful that radical don’t tally retired of wealth successful their aged ages.

Ironically, a debased oregon nary equity allocation strategy, which seems debased risk, mightiness crook retired to beryllium precise risky successful the agelong run.

A health-related analogy would beryllium similar diabetes oregon smoking cigarettes which some look to person nary contiguous antagonistic impacts successful the near-term but amusement their disfigured heads successful the 20+ twelvemonth period.

Of course, nary of the supra tin beryllium taken arsenic fiscal advice, for that 1 should consult their fiscal advisors. But this is much for the advisors to deliberation about.

Q) What is your instrumentality connected the results that person travel retired from India Inc., and what are your expectations for the adjacent fewer quarters?

A) We would say, arsenic expected truthful far, though a batch much to come. As expected Banks and Housing Finance are doing reasonably good successful presumption of gross and nett growth.

IT is struggling for maturation and is apt to proceed for a fewer much quarters until US economical situation stabilizes. Industrials, logistics and commercialized services are apt to bash good successful presumption of revenues implicit adjacent respective quarters.

Q) Gold is backmost successful the limelight arsenic it deed the Rs 1 lakh people successful the carnal market. Is it nary longer conscionable a harmless haven but besides a money-making machine? It has been outperforming equities for the past mates of years.

A) Whenever the economical situation turns uncertain, golden rallies. This is not astonishing since if you are selling equities past what bash you buy? Either fixed income oregon gold.

Sometimes erstwhile the economical fundamentals are weak, oregon adjacent hard currencies similar the USD are weak, oregon involvement rates could rise, you are near lone with gold. Due to this golden rallies.

After a important rally, the goldbugs commencement comparing equity scale returns (without dividends of course) to golden returns implicit a circumstantial semipermanent play which is favorable and “prove” however golden is superior to equities. This is simply a playbook seen galore times earlier.

Of course, “it is different” this time, similar each clip determination is thing different. This time, the US is creating a planetary economical rearchitecting done tariffs etc.

This has created a concern wherever the US system seems to beryllium heading for near-term uncertainty adjacent if it mightiness payment successful the acold future. Further to go an export powerhouse, the USD would person to beryllium devalued eventually. Trump has been favoring a anemic USD for decades, astir apt arsenic aboriginal arsenic 1980s arsenic a young businessman.

In that sense, if the USD weakens and is nary longer THE reserve currency, golden is apt to beryllium a safer concern during uncertainty. Even a anemic USD would inactive marque US equities rather charismatic since they would beryllium exporters with innovation and present an further debased USD arsenic a driver.

However, golden doesn’t nutrient thing and decidedly the satellite cannot spell backmost to a gold-backed currency authorities since determination isn’t capable golden successful the satellite for that.

So we would not deliberation of golden arsenic a semipermanent superior concern plus to turn wealth. It is simply a bully portfolio stabilizer and tactical stake during times of uncertainty.

Q) How should 1 beryllium looking astatine the small- and mid-cap abstraction successful FY26?

A) By definition, the bulk of Indian market, but the apical 250, is smallcaps. There are astir 1250 smallcaps which are really larger than INR 1000 crores marketcap, truthful they are really rather ample successful size.

This is wherever 1 volition person to absorption attraction to physique a wealthiness creating portfolio. We would caution against companies beneath INR 1000 crore marketplace headdress and penny stocks etc.

Also, adjacent present a batch of mid and smallcaps are rather overvalued. So 1 has to beryllium cautious to sift done each the stocks to observe the hidden gems. It is surely not going to you from a WhatsApp oregon telegram forward; rather, deliberation of that arsenic a trap.

What you person to observe has to beryllium utilizing a bully banal screener and a model specified arsenic our Scientific Investing Framework.

Very briefly, debar Capital Destroyers, i.e. precocious indebtedness companies, debar Capital Eroders, i.e. debased RoE companies, avoid, Capital Imploders, i.e. precocious PE (>40) companies, and debar no-or low- maturation companies. Of course, 1 tin marque each measurement much blase but the 1 I gave is bully capable to statesman with.

Q) Where is the worth successful the marketplace aft the caller autumn we person seen?

A) Banks, Power, Housing Finance, Construction EPC, Logistics, Manufacturing, Commercial services etc. is wherever we spot the worth successful the existent markets.

Even successful these sectors 1 should beryllium precise cautious and selective, applying the Scientific Investing Framework.

Q) How are FIIs viewing Indian markets? We person seen immoderate nett buying successful the past fewer sessions, but for the month, FIIs person pulled retired much than Rs 13,000 crore from the currency conception of Indian equity markets.

A) We deliberation FIIs should beryllium classified into 2 factions astatine least. One faction is short-term “hot traders” who determination successful and retired responding to short-term trading events. Another faction is the semipermanent investors.

We deliberation the blistery traders would proceed reacting to events and creating volatility. The semipermanent investors person nary enactment but to allocate much for the long-term.

If FDI similar iPhone accumulation is coming and apt to allocate much and much implicit the adjacent decade, however tin semipermanent FPI not bash that?

Q) Have you made immoderate changes to your strategy oregon portfolio to equilibrium retired the volatility arising from outer factors specified arsenic tariffs oregon geopolitical concerns?

A) Our portfolio is overweight connected what we tin “strong home companies”. These are companies with not excessively overmuch babelike connected export revenues nor person excessively overmuch expenses which are babelike connected imports oregon planetary prices.

Our 2nd penchant is for “strong planetary companies” but these are not contiguous to overmuch grade successful either our Indian oregon US portfolios.

So our portfolio is fundamentally rather insulated from geopolitical concerns. However, it volition and does fluctuate with the markets.

(Disclaimer: Recommendations, suggestions, views, and opinions fixed by experts are their own. These bash not correspond the views of the Economic Times)