A: That’s a very difficult call to take. We have to play it scrip to scrip. It is difficult to take it sector to sector.

Q: You had concerns about spaces like real estate etc. Do you think they have corrected enough?

A: I have been a real estate stock bear and have been wrong earlier. I still feel there is space to go there.

Q: Any other clear space where lots of excesses have happened?

A: In the infrastructure sector, there is lot of excess valuations. Stocks will take time. It will take time for the excesses to wear off.

Q: You have been a big bull of that space and have had big holdings like Praj, and Punj Lloyd? Do you think there were excesses at the top in those kinds of areas as well?

A: Suddenly the valuations were quite high.

Q: But have they corrected enough after this big fall?

A: They have corrected. But for them to really gain their old highs it will take time.

Q: India has been one of the biggest under performers in the last three months. Do you think there are local problems as well, which we need to content with over the next one year?

A: The way to tackle inflation is to increase supply. To keep interest rate high in the face of low interest rate worldwide, is a local problem. A friend of mine told me sometime back that the true bottom of this market will be made the day the election is announced, but that has been the history of our markets.

Q: Does politics present a threat to this market?

A: We have seen the worst of whatever the threat could be. I don’t think they are going to impose price controls anywhere. Also, India has grown a lot without the politicians. So, I am not afraid if Mayawati becomes Prime Minister, but I hope she will not. I think politics has done no good. If god were to grant me one wish, I would ask him to let anybody be the Prime Minister of this country, but let not that government be supported by Communists, because if you were to listen to the Communists we were to get everything free and don’t have to work for anything.

Q: Does government policy worry you? We have seen quite a bit of price control etc in the last one-month? Does it worry you significantly?

A: Not at all, because we have been hearing all this for so many years but India has trudged along. Do you think anything has changed in the last 12 years?

Q: What about steel? If I remember correctly, you bought some steel stocks earlier, didn’t you own Tata Steel?

A: Yes. I bought some steel stocks even lately. They are not going to impose any price controls. SAIL and Tata Steel are placed very well as far as government rules are concerned. If steel prices go up, they benefit because they have captive commodities.

Q: What is essentially different about what is going on now in the market and what you saw in 2001 and 1992?

A: Valuations in these times never got to 1992 levels. In 1992, we were trading at 65 times earnings, 2001 at 35-32 times earnings, and this year we peaked at 21 times maybe 2009 earnings.

Q: In some pockets like infrastructure etc we did go to 30-40 kind of P/E multiples?

A: Yes, maybe but that was not a very large part of the market. After all, the largest part of the market is the Sensex and Nifty. The bull market that started in 2003 cannot end at less than 30-35 earnings or at least 25-30 times for the index.

Q: Let me paint a bearish scenario. The bears say that interest rates go up even from here, which may not be justified. But in our country sometimes we do things which are not justified. G