In like a bear, out like a bull

IT IS said that in politics there are no permanent friends or permanent enemies; only permanent opportunities. A similar rule extends to the stock market as well, where there is no place for permanent bulls or permanent bears. Only those ready to swear by this axiom can hope to survive the rough and tumble of Dalal Street, where fortunes are made and lost every day. A late entrant to the world of equity investing at 32, it did not take long for Radhakishan Damani to figure this out. And that is the main reason why the 50-something broker-turned-proprietary investor, Damani is still said to be in the pink of financial health, even as most of his contemporaries have either faded into obscurity, or been forced out of the market altogether.
    With the market having rallied by more than 25% in less than a month, most market watchers are now pinning hopes on a steady, if not dramatic, recovery. But Mr Damani does not seem to be as sanguine. While he is said to have squared off most of his short positions in time and even built up sizeable long positions by the time the rally gathered steam, he does not want to press his luck for now. Circles close to the shrewd investor claim that he has sold off a significant chunk of the positions he had built in stocks like Tata Motors and Century Textiles.
    Patience being his prime virtue, Mr Damani is now sitting on a tidy packet, waiting for fresh macro and micro indicators before deciding on his next big bet. Market talk is that Mr Damani is among the few local players who have been consistently making money on his trading calls over the past one year, even as the market has been going through one of its most turbulent phase. Grapevine is that he paid an advance tax of Rs 1,000 crore during the October-December quarter. But brokers who execute his trades say that the number is grossly exaggerated, and also that some of his calls in the recent past have backfired, as the market abruptly changed course. But they admit that the winnings from his right bets have ensured that his name never figured among market participants rumoured to be in financial distress. And while Mr Damani goes to extremes to stay away from the media glare, he nevertheless enjoys a strong following in market circles. For instance, he was among the few players who took a contrarian view on Tata Motors when the stock price plunged on a deluge of rating downgrades by broking houses. The stock has been one of the best performing frontline stocks over the past month, gaining over 50%. He is also said to have bought a huge chunk of United Breweries shares last month, though people close to him say it is too early to say whether that is a trading call or a long-term bet on the spirits sector. On the other hand, Mr Damani is said to hold a bearish view on the banking sector, perhaps a reflection of his views on the broader economy. For much of last year, Mr Damani's big wins have come through his bearish calls.
    And while he may be soft spoken and come across as an indulgent professor, the promoters of at least one real estate company and a wind-mill maker, who saw their market capitalisation plummet, will vouch that appearances can be deceptive.

RADHAKISHAN DAMANI