But if we go by past data, much of this is nothing new. Covid cases were already rising, vaccines are still far from reality and the economy never stepped out of the slow lane. The only metric that’s changing is the liquidity tap, which was once the only driving factor for markets but is now showing signs of drying up.
In this edition of Tweet Buster, we go over what top names from the market believe went wrong, where does the opportunity lie now and some gems of investing that can go a long way in making you a better investor.
Mohamed A. El-Erian, Chief Economic Advisor, Allianz, in a tweet this week laid down the reason behind the meltdown witnessed across most markets around the world.
El-Erian tweeted: “The post-March rally in stocks had three big engines: Economic recovery, massive fiscal policy support and considerable liquidity. The weakening of (the) first two was masked by liquidity turbochargers and now this has been eroding too.”
A simple way to think about #markets:At its most robust, the post-March rally in #stocks had three big engines:Ec… https://t.co/wcClKGLLfg
— Mohamed A. El-Erian (@elerianm) 1601034147000
However, the possibility of a stimulus package by the US government is picking pace and it remains to be seen if this becomes a reality ahead of the November elections. If so, it could turn out to be a shot in the arm for the markets that are looking for fresh triggers to move higher.
Back home, a few reports were doing rounds that the Indian government too soon could come out with its second stimulus package. Independent market expert Sandip Sabharwal, however, took a dig at this bit of news piece and said ‘I guess I missed the first one whenever it was announced’.
Some reports suggest that the Government is considering “Another” Fiscal StimulusHmmmm, I guess I missed the firs… https://t.co/WPQojaRdfZ
— sandip sabharwal (@sandipsabharwal) 1600851831000
Market correction and volatility cannot be done away with and rather investors have to learn to live with them. This week a lot of D-Street mavens tweeted about how to take right investment decisions, what could be your shortcomings as an investor and how not to let a correction deter you from staying put in the market.
Kalpen Parekh, President, DSP Mutual Fund, said do not invest basis stories, invest where prices are reasonable.
Correlation of country gdp growth to stock markets returns may be random Don’t invest basis storiesInvest where… https://t.co/VkHYaKOJML
— Kalpen Parekh (@KalpenParekh) 1601130523000
Another tweet by Parekh reflected how investors’ lack of conviction is what’s often behind the stock market fluctuations.
When markets fall – I wish I had balanced portfolio spread across debt and gold apart from equities When they ris… https://t.co/3OqYMxX5eV
— Kalpen Parekh (@KalpenParekh) 1600934433000
Value investor Arun Mukherjee tweeted that one should only invest in assets that can generate cash flows. He pointed out that there’s no point in being ‘asset rich and cash flow poor’.
If you’re piling up assets that don’t produce a cash flow then you’re doing it wrong. No point being asset rich and cash flow poor.
— Arun Mukherjee (@Arunstockguru) 1600784350000
Mukherjee also had some investing tips to offer from the game of chess. Just like you cannot ‘undo’ a wrong move in chess, the same applies for market. One has to move on and always approach the market with a fresh mindset in such a situation.
G.Kasparov once said that 1 of biggest mistakes chess players make is trying to ‘undo’ a bad move,wn in reality, on… https://t.co/sA5IxRZ4Dj
— Arun Mukherjee (@Arunstockguru) 1601050768000
Market veteran Shankar Sharma welcomed the market correction and saw it as an opportunity to stand out of the crowd. “Bear Market is the BEST period for creating major distance between yourself and the rest if you have the ability to get it right. Bear Markets should be loved & welcomed.”
I have always held that a Bear Market is the BEST period for creating major distance between yourself and the rest:… https://t.co/O7EOvmBSuk
— Shankar Sharma (@1shankarsharma) 1600936515000
Also, here are a few books that investors can read and learn from the best names in stock market.
Best investing books for u guys:-1) 1. The Little Book that Still Beats Market-Joel Greenblatt.2) How to Make M… https://t.co/bV4Rfb49nW
— Arun Mukherjee (@Arunstockguru) 1601003493000
Besides some real ‘gyaan’, stock market investors also gave market tips and discussed asset classes and equity themes that look promising going ahead.
Arun Mukherjee has his eyes set on the next decade of multibaggers and he believes they are going to come from those companies that solve climate change or are involved with precision medicine to cure cancer, water purification and where there is the scope of value-added products.
Future multibaggers r going to come from those cos who solve climate change,or precision medicine to cure cancer.Wa… https://t.co/KBbH3DNl94
— Arun Mukherjee (@Arunstockguru) 1600838332000
Meanwhile, in the short term, Sandip Sabharwal has sounded the bugle and he says it is time to be cautious on the IT sector which has performed exceptionally well since the March lows.
Yesterday #Accenture reported resultsThey see slow growth on for another 2 quarters atleastReturn to normalcy by… https://t.co/cwh1wUiIEt
— sandip sabharwal (@sandipsabharwal) 1601004436000
Sabharwal also sees opportunity in correction in gold prices. He says he will be looking to buy the precious metal if it corrects 10-15 per cent more.
Good correction starting in #GoldWill be looking to buy 10-15% lower
— sandip sabharwal (@sandipsabharwal) 1600698686000
However, given the recent euphoria in the IPO market, he doesn’t find the quality and pricing of issues very desirable. Three new IPOs are set to hit the market next week but Sabharwal believes that investors would be better off betting on good companies that are correcting in this correction and could become cheaper.
The quality of issues in the Primary Market and the pricing leaves a lot to be desired.Investors would be better… https://t.co/cntBjlVmfs
— sandip sabharwal (@sandipsabharwal) 1601015893000