stock market nifty: Tweet Buster: Investing lessons from cricket; Ian Cassel-style microcap ideas

NEW DELHI: The only index that went up during the week gone by was the fear gauge – India VIX – which shot up by 13 per cent to 25.34. After six straight days of back-to-back losses, Nifty is down 2.5 per cent year to date. But on Twitter, there were more frenzied reactions to the GameStop saga than the domestic market. And then, there was the usual pre-Budget guesswork.

In this edition of Tweet Buster, we sift through the world of 280 characters to spot investing strategies and lessons from market mavens so that you don’t end up losing money amid the volatility.

When to borrow
Sharing his personal experience, Zerodha CEO Nithin Kamath said the first lesson of personal finance is to borrow only when you are sure that it can earn a return more than the cost of money.

International investing
For those looking to invest outside India, Kalpen Parekh, President at DSP Mutual Fund, said although international equities will have volatility similar to the Indian equities, one can invest overseas because some of these business models aren’t available India, and their returns may help lower fluctuations.

2030 or 20:30?
Parekh’s piece of advice for all those worried about the rough patch on Dalal Street: “Be a 2030 investor – not the one to worry about portfolio value at 20:30 every day.”

Respect the wicket
Parekh turned to cricket to explain how simply respecting the wicket and last more on the crease can help generate more returns.

Asian Paints to get derated?
Independent market expert Sandip Sabharwal warned fans of the Asian Paints stock that it could see a reasonable derating over the next few months, following Grasim’s entry into the paints industry with huge planned investments.

Valuation gap
Kochi-based ace investor Porinju Veliyath said the valuation gap between big stocks, that are chased by funds, and good stocks, thrown away by funds, is too big to ignore.

Spotting microcaps
Microcap investor Ian Cassel shared tips on how to find microcap ideas. “Networking, message boards, private forums like MicroCapClub, expert transcripts, screening, relationships, and just brute force A to Z turning over rocks one by one. You have to do it all”.

Being small is an advantage
Cassel said small astute investors can go places bigger money can’t and build up investment knowledge in an area where few others would bother. “You can live a comfortable life fishing the same small pond because you know where the fish are.”

It’s all about behaviour
Behavioural finance expert and author Morgan Housel said the Gamestop episode is a reminder that investing is not the study of finance. “It’s the study of how people behave with money, and sometimes those behaviors are incredible. In eight months we’ve seen oil go from $50 to negative $67 and Gamestop go from $3 to $234”.