NEW DELHI: Even as the Sensex gained 1.9 per cent last week, investors remained worried over the spike in Covid cases, pace of vaccination and withdrawals by FPI investors. On Twitter, two issues dominated discussions – why is the stock market going up when cases are rising? – and Sebi‘s new rule on compensation of key personnel in mutual fund houses.
In this edition of ‘Tweet Buster‘, we not only discuss these two issues but also dig out market gyaan and investing strategies to stay financially safe in trying times.
Dalal Street’s smile fake?
Zerodha CEO Nithin Kamath started a new debate on Twitter when he said he feels “disgusted” the way stock markets have gone up despite the second wave of Covid. “I know money shouldn’t care, but maybe it should. Maybe why today’s capitalism is broken?”
I don’t know if I am the only one, but stock markets going up the last 3 days not caring about everything happening… https://t.co/9RhsLzpDQ5
— Nithin Kamath (@Nithin0dha) 1619627460000
Zerodha and True Beacon co-founder Nikhil Kamath blamed the disconnect between the rally in stock market amid increasing Covid cases as an example of economic depersonalization or derealization disorder.
Economic depersonalization/derealization disorder
— Nikhil Kamath (@nikhilkamathcio) 1619590305000
Skin in the game
Radhika Gupta, managing director and CEO of Edelweiss Mutual Fund, explained how Sebi’s order on compensation of AMC employees is going to be “extremely problematic in implementation”.
The circular on skin in the game, while a good idea in spirit, is going to be extremely problematic in implementation.
— Radhika Gupta (@iRadhikaGupta) 1619624986000
Oxygen crisis vs credit crisis
Fundoo professor Sanjay Bakshi recalled a famous quote by Warren Buffett: “Credit is like oxygen. When either is abundant, its presence goes unnoticed. When either is missing, that’s all that is noticed.” He said as of now, the oxygen crisis is deadlier than credit crisis.
“Credit is like oxygen. When either is abundant, its presence goes unnoticed. When either is missing, that’s all th… https://t.co/XaodlU9Tqp
— Fundoo Professor (@Sanjay__Bakshi) 1619157826000
Fund manager Basant Maheshwari said metals are are a once in a decade opportunity. “When you get it make the most out of it,” he said.
Metals are a once in a decade opportunity – when you get it make the most out of it. https://t.co/QN0Au2SWN1
— Basant Maheshwari (@BMTheEquityDesk) 1619691505000
Eat your own food
Amid the debate over Sebi’s new rules, DSP Mutual Fund’s Kalpen Parekh said whenever his team meets any global investor, they always get asked: “Do you invest your own money in your fund that you are recommending to us?”
When we meet any global investor, a very important question each one of them ask us is : Do you invest your own m… https://t.co/dWjU238kUh
— Kalpen Parekh (@KalpenParekh) 1619637221000
For long-term investors
Smallcap hunter Arun Mukherjee said investors gave a 7-point checklist that investors must follow while picking new stocks.
Look for companies that over the years consistently:✓ Grow sales✓ Maintain margins✓ Capture market and mind sha… https://t.co/7eLFZQS83m
— Arun Mukherjee (@Arunstockguru) 1619783200000
What after steel?
Dalal Street veteran Shyam Sekhar ran a poll on what is going to be the next big theme after steel. The results was a tie between infrastructure and PSU reforms.
Steel worked big.What is your next big pick theme?Go for this rapid fire poll. Vote, RT and build up an opinion score.
— Shyam Sekhar (@shyamsek) 1619751311000
Investment advisor Sandip Sabharwal said each market cycle is different. “Using last cycle moves to predict the next cycle usually goes wrong. Last time consumption led the rally as actual impact on incomes was low, inflation was low & stimulus was present. This time these lack. Next cycle cyclicals will outperform.”
Each cycle of the market is differentUsing last cycle moves to predict the next cycle usually goes wrongLast time… https://t.co/82Ayoc1raf
— sandip sabharwal (@sandipsabharwal) 1619767166000
Trading vs Investing
Explaining the difference between investing and trading, microcap investor Ian Cassel said investing is done with an intention to hold, while in the latter case the intention is to sell.
The difference between trading and investing: Investing – your intention with every purchase is to hold. Tradin… https://t.co/VQQiqjmSX5
— Ian Cassel (@iancassel) 1619875469000
3x will lead to 2x
Cassel said if you are looking for a stock that can double, look for the one that other investors think it can triple.
For a stock to double, other investors need to think it can triple. So .. to find a stock that can double find a stock that can triple.
— Ian Cassel (@iancassel) 1619732167000
Other gems from Cassel
Invest in undervalued companies that can get overvalued. Fairly valued isn’t good enough.
— Ian Cassel (@iancassel) 1619691960000
It’s okay being down in a position you believe in. The issue is being down in a position you no longer believe in -… https://t.co/rLwvuFR5Uj
— Ian Cassel (@iancassel) 1619529114000
All successful investors have two things in common. They are extremely disciplined and they understand the downside… https://t.co/yZLmTsOdGV
— Ian Cassel (@iancassel) 1619517882000