Shefali Anand on WSJ India writes: “How to be Warren Buffett in India.” She interviews 3 Indian mutual fund managers who follow the Warren Buffet style of value investing.
In India, typically value managers look for "relative value," meaning a stock which appears cheap compared to something else, such as its peers or the Bombay Stock Exchange’s Sensitive Index. This is in contrast to "absolute value," in which the stock is cheap compared to its intrinsic value.
"It’s very difficult to be style pure in an excessively growth market," says Anoop Bhaskar, manager of the UTI Master Value fund. One reason is that money managers are expected to beat a benchmark index like the Sensex. In the U.S., some veteran absolute value managers hold cash if they don’t finds cheap enough stocks. But when the market goes up a lot, those cash holdings can make them fall behind the market significantly. "A pure value fund in India can underperform for such a long time that investors and distributors just might give up on it," says Mr. Bhaskar.
