According to reports from Mint Money, DSP's Jay Kothari warns investors not to be misled by extraordinary market returns and emphasizes the need for proper research and patience. Kothari estimates that Indian equities have cumulatively underperformed emerging and global markets by nearly 70% over the past two years, a gap he believes will eventually mean-revert. Before the AI-led rally, Indian equities had compounded at roughly 20% compared with gains of 5–6% in Korea and Taiwan, with strong earnings and healthy return ratios still characterizing many Indian companies today. As Kothari explained, India's stubborn underperformance may actually signal a turnaround in the near future, with this unusually-wide divergence something markets haven't previously witnessed at this scale.
As reported by Mint Money, Kothari highlights a critical technology sector gap that has overshadowed India's underlying strengths. "Globally, all three components of tech—software, hardware, and semiconductors—are present. In India, there is only one. We do not have hardware and semiconductors, which have driven 50% of the growth in emerging markets and the world," he explained. Kothari advocates patience and measured global exposure rather than mechanically following technology-heavy benchmarks, focusing on companies that are mispriced rather than market cap buckets. He emphasizes that "Rather than focusing on market cap buckets, we're focusing on companies that are mispriced, not just because they've underperformed, since underperformance can even be structural."
According to Mint Money, Kothari flags important implications for capital allocation regarding the impending IPO rush. Increased IPO supply naturally diverts capital away from existing secondary markets, with foreign investors reportedly selling secondary holdings to fund IPO purchases. He cautions retail investors against blindly chasing hype-driven investment decisions, emphasizing that market momentum can attract investors without guaranteeing profitable outcomes. Kothari warns that "I'd strongly urge retail investors not to get swayed just because something is in momentum or high in decibels. Do your study, or trust somebody who has the ability to study that company, and then put your money to work because sometimes momentum will suck you in but won't let you make money."
As reported by Mint Money, Kothari warns against unrealistic expectations shaped by recent exceptional performers. "Some companies have delivered extraordinary returns over the past two years. This has blinded perceptions, making modest 15% gains seem comparatively disappointing," he noted. Kothari emphasizes that achieving 30-100% compound annual growth remains genuinely rare across markets, urging retail investors not to get swayed by momentum or high decibels without thorough research or trusted expert guidance. He stresses that "Time in the market matters more than timing the market" and advises investors to focus on fundamentals rather than short-term market movements.
