Market veteran says not sure Tech Winter is over-rated

Neil Parikh is a market veteran, who believes that one has to distinguish between new age companies and mature technology giants, especially when talking about the US technology sector. He said that he is not sure whether the space will bounce back anytime soon after the Covid 19 pandemic, shares of many new age companies went up multifold, as interest rates were low, funding was easy and that without any fundamentals.

Parikh said at the Markets Today Summit that mature technology companies such as Google Alphabet Inc, Facebook Meta Microsoft and Amazon are profitable and growing well. Parekh, who is Chairman and Chief Executive Officer at PPFAS AMC, said a 20 -- 30 per cent fall in technology stocks was not uncommon, as a result of an impeding Tech Winter.

We are not perturbed by the mature tech space. They are a good entry point right now. I would distinguish between the two. Parikh said that they were not too confident about the new age tech, but very confident about the mature space.

Parikh said investors have been spoilt for good returns in the last few years and that expectations are high. He said investors who came to the market over the 4 -- 5 years have not seen an elongated bear market. My worry is that the expectations are still high. The market saw a great run in the last two years. That spoilt a lot of people. Some people get it the hard way. The younger generation expects a 20 per cent return from equities, and getting a 12 -- 14 per cent return from equities is great. He said that is going to be tough to get.

Parikh said equity is a long-term product but investors are obsessed with last six months return. That needs to change, he said. There will be some pain in the next two or three years. They may not be that great and we may see some normalisation, he said.

Pratik Oswal, head of passive funds at Motilal Oswal AMC, said markets globally move in different directions, and that investing outside India does have its merits.

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