In this edition of Tweet Buster, we dig deep into the world of 280 characters to not only spot money-making opportunities but also understand what not to do in a bull market so that you do not end up losing money.
Life of a stock broker
Zerodha CEO Nithin Kamath was frank enough to admit that the stock broking industry’s performance is directly related to the performance of Nifty. “Revenues are based on market volatility. The more the market moves, the higher the revenues generated,” he said.
How will the broking industry perform next few years? This is a question I get asked often, more recently.
I usually say, if you can tell me the Nifty direction or volatility, I can tell you what the broking industry will do. Because both are positively correlated. 😃
1/2
— Nithin Kamath (@Nithin0dha) July 19, 2021
Checklist
Edelweiss Mutual Fund CEO Radhika Gupta said there are three questions one must ask before buying an NFO:
- What exposure is this adding to my portfolio that I don’t have?
- Can I get the same exposure in an existing fund with a track record? What makes this special?
- Do I need to rush to invest now?
3 questions to ask yourself before buying an NFO:
1. What exposure is this adding to my portfolio that I don’t have?
2. Can I get the same exposure in an existing fund with track record? What makes this special?
3. Do I need to rush to invest now?P.S. Yes, I run an AMC.
— Radhika Gupta (@iRadhikaGupta) July 19, 2021
Heady days of bull market
Maverick value investor Vijay Kedia said making money in a bull market is neither a certificate of your intelligence nor a guarantee of your success. “One should keep on learning how to make better investment decisions, else it won’t take hours to lose money made over the years.”
📚 📖📝🎒 pic.twitter.com/0g7n2BzJvY
— Vijay Kedia (@VijayKedia1) July 24, 2021
Bulls vs Bears
Ravi Dharamshi, Founder and MD of ValueQuest Investment Advisors, said bulls will assume scalability and sustainability in all companies while bears will make the mistake of predicting cyclical downturn and assuming high valuations as a reason for market crash. “Bulls will be right immediately and bears will be right eventually.”
Mistakes that will be made by bulls – assuming scalability and sustainability in all cos. Mistake bears will make is predicting cyclical downturn and assuming high valuations as a reason for market crash. Bulls will be right immediately and bears will be right eventually.#market
— Ravi Dharamshi (@ravidharamshi77) July 22, 2021
For risk-averse investors
PMS fund manager Basant Maheshwari said the biggest challenge with a high-yield and zero growth stock is when the price goes up the yield comes down and the buyers disappear. “So prices remain range bound (for years) till growth returns back – if ever it does.”
The biggest challenge with a high yield and zero growth stock is when the price goes up the yield comes down and the buyers disappear. So prices remain range bound (for years) till growth returns back – if ever it does.
— Basant Maheshwari (@BMTheEquityDesk) July 24, 2021
Rating Cycle
Maheshwari said it is a total misconception to think that you can’t make more as an investor than what the company makes as a business. “Those people haven’t heard of P/E rerating and P/E derating – the tricks to financial freedom & years of under-performance.”
Its a total misconception to think that you can’t make more as an investor than what the company makes as a business. Those people haven’t heard of P/E Rerating and P/E Derating – the tricks to financial freedom & years of under-performance.
— Basant Maheshwari (@BMTheEquityDesk) July 23, 2021
Beyond stock tips
Maheshwari said the trick to making big money isn’t stock picking but allocation. “Losers don’t get it and winners don’t leave it.”
The trick to making big money isn’t stock picking it’s allocation. Losers don’t get it and winners don’t leave it. https://t.co/AxerGQTkGb
— Basant Maheshwari (@BMTheEquityDesk) July 21, 2021
Pecking Order
Independent market expert Sandip Sabharwal said ICICI Bank results were much better than the more fancied HDFC Bank and .
#ICICIBank results much better than the more fancied #HdfcBank, #BajajFinance etc
Plus value of its subsidiaries like#IciciSecurities#IciciAmc#ICICILombard #IciciPruLifeAlso continuously moving up
— sandip sabharwal (@sandipsabharwal) July 24, 2021
Don’t get swayed by the argument that “FDs are giving just 4-5%” to put more and more money at
Higher and higher levels in the stock marketsSometimes Asset Allocation requires not looking at short term returns but protecting you gains and capital
— sandip sabharwal (@sandipsabharwal) July 22, 2021
Investing Strategy
Kalpen Parekh of DSP Mutual Fund gave away some hard stats to prove how important is asset allocation.
If things go wrong – the best case scenario worked for Asset allocation (equal to all 5 asset classes) with still positive returns (6%) while the median returns aren’t much lower than Equities pic.twitter.com/EUrfnsUNQw
— Kalpen Parekh (@KalpenParekh) July 23, 2021
Lady Luck
Microcap investor Ian Cassel said all you need is a few big winners during your lifetime to beat the market. “Everyone will say you got lucky, but everyone else didn’t have the courage to find them, buy them, and hold them. In the end luck has very little to do with it.”
All you need is a few big winners during your lifetime to beat the market. Everyone will say you got lucky, but everyone else didn’t have the courage to find them, buy them, and hold them. In the end luck has very little to do with it.
— Ian Cassel (@iancassel) July 21, 2021
The market tells you more about yourself by how you react to it than any psychiatrist could. It’s the same as golf – it is very quick at exposing your weaknesses.
— Ian Cassel (@iancassel) July 23, 2021
