In today’s edition of ‘Tweet Buster’, we sift through the world of 280 characters to bring out investing mantras, advice on what to buy and what not to buy in this market, and asset allocation strategies in complex situations.
MF checklist
Radhika Gupta, MD & CEO, Edelweiss Asset Management Limited, listed ten mutual fund mistakes investors should avoid. In this thread, she warns about the perils of investing in passive funds and also argues that investors should ignore one-year return statistics of mutual funds. Worth a bookmark!
1. Too much love A fund does well. You fall in love with the fund house. You have a large mid and small cap sc… https://t.co/9J4Sky4rNW
— Radhika Gupta (@iRadhikaGupta) 1618674571000
2. One for allApplying the same metrics to judge different asset classes. What matters to equity funds doesn’t… https://t.co/dVau60YLTN
— Radhika Gupta (@iRadhikaGupta) 1618674572000
4. Apples and kiwis 🍎 🥝 We have categories in MF but sadly all funds in a category are not comparable. Just bec… https://t.co/5kxRCeQmBj
— Radhika Gupta (@iRadhikaGupta) 1618674573000
5. Discretion on discrete returnsEveryone publishes 1y/3y/5y returns but they mean little. They matter only if… https://t.co/lCagt4aMZt
— Radhika Gupta (@iRadhikaGupta) 1618674573000
6. The monster of 1y return The single most badly used statistic in MF. And the single most published. It indi… https://t.co/D7UzimcsmB
— Radhika Gupta (@iRadhikaGupta) 1618674574000
7. Global gyaan What works for the globe should work for India. Different market, different rules. For instanc… https://t.co/M0i93GI85I
— Radhika Gupta (@iRadhikaGupta) 1618674574000
9. Copy thy neighbour Buy because someone is buying, sell because a WhatsApp group says so. Personal finance is… https://t.co/QMxXmQVBtp
— Radhika Gupta (@iRadhikaGupta) 1618674575000
10. Switching costs Lots of talk about MF fees. Do you know how much you pay in switching costs between taxes a… https://t.co/wvJuhx7PjQ
— Radhika Gupta (@iRadhikaGupta) 1618674576000
When gold meets crypto
Nilesh Shah, managing director of Kotak Mahindra AMC, said gold-backed cryptocurrency is an idea whose time has come. “Gold ETFs will take money out of India for import of gold. Gold-backed cryptos will bring dollars into India if we can market it like Swiss Bank marketing to HNIs,” said the star fund manager.
Gold ETF will take money out of India for import of Gold. Gold backed Crypto will bring dollars into India if we ca… https://t.co/Gr8eFEP6Z7
— Nilesh Shah (@NileshShah68) 1618566196000
For bookworms
Value investor and founder of Intelsense Abhishek Basumallick said: “Don’t go by what you read in foreign books on investing. Experiment for yourself to see what works for you in your own context & market. Just because a guru has said something does not make it right (or wrong!).”
Don’t go by what you read in foreign books on investing. Experiment for yourself to see what works for you in you… https://t.co/lhiIVpWTu5
— Abhishek Basumallick (@a_basumallick) 1618381980000
The ‘No Ads’ puzzle
Zerodha CEO Nithin Kamath explains why India’s largest stock broker doesn’t advertise. “Unlike buying a mobile phone or ordering a pizza, you don’t invest in stocks & MFs impulsively. Most often than not, we invest because of greed or because of our friends. And regulations don’t allow you to advertise greed.”
Unlike buying a mobile phone or ordering a pizza, you don’t invest in stocks & MFs impulsively. Most often than not… https://t.co/B1H1Oo3FWt
— Nithin Kamath (@Nithin0dha) 1618501951000
Asset allocation tips
Illustrating the effectiveness of asset allocation, Kalpen Parekh, president at DSP Mutual Fund, said a mixture of 50:50 in Nifty and gold show lower volatility than having an 80:20 mixture. “Asset allocation is magical – like Alchemy. If we can mix asset classes right around a disciplined framework – it can earn same returns for lower risk,” he said.
Asset allocation is magical – like Alchemy. If we can mix asset classes right around a disciplined framework – it c… https://t.co/OmCFbloxkJ
— Kalpen Parekh (@KalpenParekh) 1618647561000
Patience pays
“What matters is your ability to stay on the path. Pick a vehicle, a bus, that suits your need and disposition and then stay on it. Make a start. It could be with Index Funds or Active Funds or any other sensible investment vehicle. And then, just stay on.”
What matters is your ability to stay on the path. Pick a vehicle, a bus, that suits your need and disposition and t… https://t.co/hcduZFP7zP
— Kalpen Parekh (@KalpenParekh) 1618380829000
Sectoral Bets
Value investor Arun Mukherjee listed out five sectors which are likely to outperform the market going forward.
5 sectors or themes which will outperform the market going forward. Some past winners would be future winners too.… https://t.co/O0O8ManCDB
— Arun Mukherjee (@Arunstockguru) 1618662872000
Multibaggers
Mukherjee said in the last 22 years, SBI is up 13x, HDFC 100x and HDFC Bank 1,000x! “That’s the difference between ordinary and extraordinary! Only shows up in the long term!”
Interesting insight: Last ~22 years stock performance, SBI up ~13x, HDFC up ~100x, HDFC Bank up ~1000x! That’s the… https://t.co/DkxXjirUxp
— Arun Mukherjee (@Arunstockguru) 1618634178000
Covid 2.0 risk
Independent market expert Sandip Sabharwal said the State Bank of India (SBI) could take the biggest hit on renewed lockdowns as it was most aggressive on retail loans over the last one year and has one of the biggest MSME portfolio where there could be significant renewed stress.
#SBI could take the biggest hit on renewed #Lockdowns As it was most aggressive on Retail Loans over the last one… https://t.co/j0iAwf5GqV
— sandip sabharwal (@sandipsabharwal) 1618466742000
Investing gems
Microcap investor Ian Cassel says your best investments are the ones no one agrees with you on until after they go up 100-200-500%.
Your best investments are the ones no one agrees with you on until after they go up 100-200-500%
— Ian Cassel (@iancassel) 1618569045000
That stock you want others to buy – People like to look back and extrapolate forward. You’ll have 10x more people w… https://t.co/CffVTgoow2
— Ian Cassel (@iancassel) 1618482921000
