Gold will become cool, when cryptocurrencies become uncool: Nikhil Kamath

moneycontrol.com:

Nikhil Kamath, the co-founder of Zerodha and alternative asset management firm TrueBeacon, is buying gold and lots of it. The fund manager has already accumulated gold to the tune of 15 percent of the fund’s portfolio as he looks to hedge against the rising threat of inflation.

Kamath’s vote of confidence for gold as an inflation hedge runs against the current trend where global institutional and retail investors have been buying Bitcoin to protect themselves against runaway inflation.

“Gold, in my mind, will become cool when cryptocurrencies become uncool. There has been a big crash in cryptos, and if that crash were to speed up I think gold will suddenly start becoming more attractive again,” Kamath told Moneycontrol in an interview.

Kamath also talked up the case for the government to rationalize taxation on dividends, securities transactions, and equity derivatives.

Edited excerpts:

We have seen a very rangebound market over the past three months with bouts of selling pressure. Are you comfortable dipping into the market at this level?

I would say not yet, especially, when it comes to companies that are correcting a lot like Zomato, Nykaa, Paytm, and the rest. From the very beginning, their valuations did not make sense. I've been pointing out for a long time that buying companies, which are loss-making at 1,000 times and 1,500 times multiples, is not sustainable. Even at current valuations, I don't see where the rationale is to enter these stocks.

The markets are still priced to perfection, and ahead of the Budget and the inflation worries we have at hand, probably it is still not the right time to enter. And when you look at the correction, it's tiny, right? It feels like a big one but for a market that has rallied 100