rakesh jhunjhunwala: Tweet Buster: 8 stock market lessons from Rakesh Jhunjhunwala

In this edition of Tweet Buster, we scan through the world of 280 characters to help you make money and understand market signs.

Primary market frenzy

Value investor Vijay Kedia said there are similarities between banks, hospitals, crematoriums and IPOs. “If everyone visits at the same time, it creates chaos, panic, frenzy and euphoria,” he said.

Lessons from Big Bull

Ravi Dharamshi of Valuequest Investment Advisors shared a list of eight lessons his colleague Prashant Desai learnt while working with ‘Big Bull’ Rakesh Jhunjhunwala.

Passive Investing

PMS fund manager Basant Maheshwari said index funds are only good to beat other asset classes but a very poor way to achieve financial freedom as index funds generate less than 15 per cent CAGR.

Mind game

Maheshwari said the market is a hardcore materialistic and unemotional person. “No philosophy works there – only psychology does.”

Earnings worry

Fund manager Shyam Sekhar said the real test will be in the next two quarters. “One QoQ dip will not shake the herd belief so much. YoY numbers will help deflect opinion and keep it on positive turf. This quarter is only a dip test. The real test will be in the next two quarters. Increasingly, it will get tougher to manage opinion. Till then, game on.”

Valuations Matter

Market expert Sandip Sabharwal said it has been proven every time that valuations matter. “Many technology stocks traded at PE of 100-120X prior to technology meltdown in 2000. Even high cash generating Infosys cracked 85% from the peak despite profits continuing to grow rapidly,” he said.

Sabharwal said TVS Motors is one company which always gives an excessively bullish outlook, the stock rallies after concall but the results mostly disappoint. He warned that the on-ground situation in two-wheeler market is not good. “The next three months are going to be tough for 2-wheeler domestic sales.”