Volatility is inherent in small-cap investing, and it’s crucial to always keep that in mind. During challenging market conditions, small-cap stocks can experience corrections of up to 50% or even more.
Before investing in small-cap stocks, it’s important to adopt a long-term perspective. Therefore, it is advisable to have a minimum investment horizon of 3-5 years.
Best Small Cap Mutual Fund?
Hello Arvindji,
I would like to learn more about your background in terms of investing. How did you form an interest towards investing and also what thought process made you focus on mid/smallcap investing or say scuttlebutt investing. There are many investing styles out there but what was the thought process behind sticking to the current one that you do and a little bit about your investing journey. I guess you would call yourself a growth investor right?
There are numerous themes that I find appealing, and one theme that stands out to us is our bullish outlook on India’s manufacturing sector.
Small-cap investing is attractive during a bull market, but staying invested after a significant correction in a bear market can be challenging. In such a market, conducting thorough research and building positions in companies becomes advantageous, as entering quickly in favorable markets can be limited due to rapid market reactions. To invest in small-cap stocks, it is advisable to have a long-term horizon of 3-5 years and to recognize volatility as an integral aspect of this asset class.
Hi YS_Bhargav, I believe that capital has not been a challenge in the past few years, and technology has been evolving rapidly. Over the last decade, we have witnessed numerous small players transform into industry giants. Therefore, I do not think this is the case in the current world.
Holding companies for a longer period is becoming increasingly challenging. It is essential to closely track their performance.
Some sectors that are well poised include solar modules, textiles, electronic manufacturing, and capital goods.
It can be challenging as small-sized companies tend to react quickly. I am also exploring the correct method to navigate this situation. It depends on each scenario.
Hello Arvind, @ArvindKothari
Saw your recent picture with RK Damani ji, Nemish and durgesh shah. Inspiring stuff 
Who were your idols growing up and can you share any lessons that you’ve learnt from your Gurus or mentors ? It would be great to know for all of us.
Thank you so much for doing the AMA @ArvindKothari, this was really insightful.
We’ll close the AMA with this. We’ll record a podcast with Arvind and dive deeper into some of these things.