'For us, timing is everything'

Boasting over 27 years of experience in the capital markets, Sandeep Tandon is a known name in the industry. Previously, he has held positions at various reputed financial services firms, including GIC Mutual Fund, IDBI Mutual Fund, ICICI Securities and Kotak Securities. In an exclusive conversation, the CEO and Director of Quant Mutual Fund sheds light on the strategic use of predictive analysis in forecasting market trends. Further, he also addresses the prevailing market speculation and leverage, noting that both are currently minimal. Here are some interesting snippets from the interview. You have had quite the journey from mutual funds (GIC and IDBI Mutual Fund) to starting the equity derivatives segment at big names like ICICI and Kotak. What are the biggest takeaways from those experiences? At Quant, we have built a framework known as VLRT (Valuation, Liquidity, Risk Appetite and Time), and it has come from the learnings over the years at various organisations. We built this predictive analysis based on mistakes, and the idea is to not repeat the mistakes going forward. I firmly believe you will succeed in markets if you can control your mistakes. We have seen many people analyse their success, but we have examined and rectified our errors. That has played an important role in our success. Equity markets have undergone significant transformations over the last 30 years. How do you think they've changed the most since you started? I started at the time of the Harshad Mehta boom when markets were not only euphoric but also in a manic phase. I distinctly remember research being in its infancy. FIIs (foreign institutional investors) were just entering India and setting up research firms. At that time, research was very elementary, like cash flow-based analysis. I clearly remember that around 1995-96, I bought a book by Ashwath Damodaran on valuation, and I couldn't understand anything from the book because we had never thought in that manner. But look at the world today. There is an overload of information, and there is no scarcity of data or analytics. Now, time management has become very important in terms of understanding exactly what you have to read and what you have to ignore - a big change from a scarcity of information to an overload of information. That's the biggest challenge we are facing today. When did you first try the strategy that you follow at Quant? What convinced you that it would work in mutual funds? It's not fair to say that I started this strategy when I launched the mutual fund business. I have been following this strategy for the past 30 years, and I call it very pragmatic research. In traditional investing, you have to calculate th