R. Chandra: Today, we have with us Mayuresh Joshi, Director of Research at William O’Neil India. Mayuresh, thank you for joining us. Could you start by telling us a bit about your journey so far?

Mayuresh Joshi: Thank you, R. Chandra. I’ve been with William O’Neil India for almost five years now, and it’s been an incredible journey. Our company, named after our legendary founder William O’Neil blends fundamental and technical analysis to identify strong stocks within robust sectors. O’Neill’s approach, known as CAN SLIM, has become popular worldwide. He was a pioneer in using technology, even in the 1960s, to map stock charts with key events and actions. Before joining William O’Neil India, I spent 12 years at Angel Broking, handling everything from compliance to strategic tie-ups and managing portfolios. My career in the financial markets has spanned nearly two decades, and I’ve experienced the highs and lows that come with it. This has given me a scientific approach to investing, focusing on logic rather than emotions.

R. Chandra: It sounds like you’ve had a fascinating journey. What initially drew you to the stock market and equity shares?

Mayuresh Joshi: My interest in the stock market began in college. I’d see my parents and seniors discussing stocks, and Economic Times, which was pink in colour back then, was often carried around as a badge of knowledge. We would have these elementary discussions about companies like L&T, which fueled my interest further. By the time I finished college, I was sure that this was the field I wanted to be in. Over the years, that interest evolved into a passion for research and understanding market dynamics.

R. Chandra: It’s evident that your deep interest and commitment to the field have shaped your successful career. Shifting to the current market sentiment and trends, how would you describe the sentiment in the Indian equity market and the factors driving it?

Mayuresh Joshi: The current market sentiment is influenced by several key factors. Over the last decade, with the focus on accelerated investments from the new government, we’ve seen a significant increase in capital expenditure. The budget allocations have risen to ₹11 lakh crore for capital projects, leading to visible progress in infrastructure, both rural and urban. Digital infrastructure has also improved significantly, especially post-demonetization. The China Plus One strategy is benefiting sectors like manufacturing and infrastructure, while foreign and domestic investment confidence has increased. Additionally, the services sector has seen growth, with significant contributions from IT services exports and remittances.

R. Chandra: Interesting insights. Which sectors do you think are set for strong growth over the next 12 to 18 months, and why?

Mayuresh Joshi: Sectors such as infrastructure and manufacturing are poised for growth. The government’s PLI schemes are incentivizing industries, leading to backward and vertical integration. Renewable energy and infrastructure are major themes for long-term growth. Additionally, a selective focus on domestic sectors like cement, waste, and water management is promising.

R. Chandra: How do global factors like interest rates and geopolitical events influence the Indian equity market?

Mayuresh Joshi: Global factors do impact the market, but their effects are often temporary. Geopolitical events, like elections or conflicts, can cause short-term market fluctuations. For instance, changes in U.S. leadership or international conflicts may impact investor sentiment briefly. However, markets usually adjust and stabilize over time. Black swan events, such as COVID-19, cause significant but unpredictable reactions. Overall, markets tend to recover and present opportunities even after major disruptions.

R. Chandra: Despite various predictions during election times, market reactions can vary. The recent BJP election results were unexpected for many, as there was anticipation for a stronger third term. What’s your viewpoint on this?

Mayuresh Joshi: The market anticipated an absolute majority for BJP, but the results were different. Initially, there was no major market reaction, but the market recovered quickly. Markets tend to adjust after a brief reaction to political outcomes. The belief is that key processes and investments will continue regardless of political changes unless there’s significant policy reversal or populism. Historical trends suggest that markets stabilize and don’t drastically change course due to election outcomes.

R. Chandra: Can you share your investment philosophy and how it aligns with William O’Neil’s approach to equity risk?

Mayuresh Joshi: Initially, I was a value investor but shifted to momentum investing influenced by William O’Neil. We analyze market phases—strong phases favour momentum stocks, while corrections shift focus to stable sectors. O’Neil’s approach involves identifying market tops and bottoms using distribution days and follow-through days. In a high-growth phase, momentum investing is effective, while during corrections, we pivot to stable sectors. Risk management is crucial, and we book profits if stocks exceed expectations or if there’s excessive price movement.

R. Chandra: How do you manage risk in your equity research and investment recommendations?

Mayuresh Joshi: Position sizing is critical, and we use an 8% stop loss as a guideline. If a stock drops 7-8% from the entry point with high volumes, it’s a signal to exit. We also book profits when stocks show significant returns or become excessively extended from their moving averages. For stocks with strong moves, partial profit booking is advisable, letting remaining positions run until they reach key moving averages.

R. Chandra: How has technology, such as AI and data analytics, influenced equity research and stock market predictions?

Mayuresh Joshi: Technology has significantly improved equity research. For example, tracking 500 stocks manually is nearly impossible, but with technology, analysts can now use data analytics and AI tools to filter and monitor these stocks more efficiently. This includes using factor research tools and creating curated lists based on various data points, which simplifies tracking and decision-making.

R. Chandra: How does technology impact your day-to-day operations?

Mayuresh Joshi: Technology has made the research process more manageable and efficient. For instance, AI tools help in identifying stock trends and generating alerts, which allows for timely decision-making, such as advising clients to exit positions before significant market drops like the COVID-19 crash.

R. Chandra: Can you share some examples where technology or your research approach led to successful outcomes?

Mayuresh Joshi: One example is the pre-COVID crash alert system, which helped avoid major losses by advising clients to exit positions early. Another instance involved a stock with a market cap below ₹1,000 crore that performed well despite its small size. Despite initial reservations, the stock’s strong fundamentals justified an exception to their usual rule, leading to positive results.

R. Chandra: How do you balance the demands of your work with personal time?

Mayuresh Joshi: The market demands constant learning and adaptation, but personal time is crucial. Weekdays are intense and require ongoing education and analysis, while weekends are reserved for family and relaxation to maintain work-life balance.

R. Chandra: Have you seen history repeat itself in the market during your 20 years in the industry?

Mayuresh Joshi: Yes, history does repeat in the markets. We’ve seen various rallies and crashes, like the 2004 rally, the 2007 crash, and the COVID crash. Markets are cyclical and corrections are natural; they remove excesses and present new opportunities. Though long-term investments can yield substantial returns, short-term volatility is expected. It’s important to stay invested for the long haul, despite inevitable market fluctuations.

R. Chandra: What challenges do you face in equity research, especially in the Indian market?

Mayuresh Joshi: Challenges include limited transparency in smaller companies and variability in corporate governance. Despite improvements in regulatory standards, assessing management quality and reported numbers remains crucial. Research involves creating various growth scenarios and adapting to dynamic market conditions. Analysts must anticipate potential outcomes and adjust their strategies accordingly.

R. Chandra: What advice do you have for retail investors regarding current market opportunities?

Mayuresh Joshi: New investors should consider mutual funds or advice from registered financial advisors. For more experienced investors, conduct your own research and focus on sectors you understand. Avoid following tips blindly from social media or unregistered sources. Educate yourself and make informed decisions based on your own research.

R. Chandra: How has your leadership journey at William O’Neil shaped your approach, and what lessons have you learned?

Mayuresh Joshi: Effective leadership relies on having a cohesive team and fostering an environment where ideas flow freely. I emphasize team collaboration and allow team members to make decisions within their expertise. It’s important to create a supportive environment and encourage team members to present and implement their ideas, which leads to better decision-making and innovation.

R. Chandra: How do you manage work-life balance?

Mayuresh Joshi: I start my day early with meditation and a review of the news and markets. My workday ends around 5 PM, after which I exercise for an hour. Dinner is at 7 PM with my family, and I turn off my devices by 10 PM. Weekends are reserved for family time and sports, like playing tennis.

R. Chandra: What are your future goals and advice for newcomers to the finance industry?

Mayuresh Joshi: For those starting in finance, patience and strong analytical skills are essential. Stay updated with technological advancements and continually improve your abilities. For investors, seek advice from professionals and educate yourself thoroughly to make informed decisions.

R. Chandra: We recently saw the Global Fintech Fest in Mumbai. What are your thoughts?

Mayuresh Joshi: Technology is rapidly evolving, and staying current with these changes is crucial. Even activities like video games can enhance skills such as hand-eye coordination, which are relevant in various fields.

R. Chandra: It’s been insightful talking to you. Any hobbies or interests?

Mayuresh Joshi: I was a professional tennis player and still enjoy playing tennis on weekends. I’m also passionate about sports and often watch old cricket matches.

R. Chandra: It’s been great speaking with you.

Mayuresh Joshi: Thanks for the opportunity, Chandra.