After two years of correction in small and midcap stocks, a veteran value investor believes the worst has passed and selective buyers may find opportunities. Speaking recently, he stated the segment has largely stabilized and highlighted Thomas Cook India as a recent portfolio addition. He also pointed to AI-focused midcap IT firms and healthcare as key themes for the coming decade. The investor noted that prior years saw sharp gains that attracted new retail money and created overvalued conditions requiring adjustment. Several stocks have risen 20 to 50 percent from lows in recent weeks. He advised against broad buying and instead recommended focusing on well-managed companies whose earnings faced temporary pressure from costs or external events. Valuations for such firms have been reduced significantly while underlying quality holds. The investor confirmed his fund holds no cash and has added positions including Thomas Cook and an unnamed smallcap hotel firm that declined sharply. His strategy remains bottom-up without sector limits. Midcap IT companies adopting AI solutions quickly may gain, while healthcare demand is expected to grow steadily. On defence, he noted strong growth but cautioned that many smaller names already reflect years of expansion in their prices.
