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Shyam Sekhar | Basant Maheshwari | Tweet Buster: Tweet Buster: Shyam Sekhar’s funda of ‘BeerMug’ investing; why momentum stocks always disappoint in the end


Amid profit booking in consumption, metal and realty stocks, domestic equity benchmark indices slipped into bear’s grip for four straight sessions and snapped the winning spree of the past two weeks. Investors were worried about subdued earnings announcements and mixed global cues.

In this edition of Tweet Buster, we sift through the world of 280 characters to bring out the best of
gyaan from market mavens to help you make money in a volatile market.

Managing Money

DSP Mutual Fund’s Kalpen Parekh said personal finance is more valuable than markets. “You realise this when personal events trigger high expenses. What worked for my granny (no capital) & parents (moderate income) was decent health insurance & investments held for decades as they didn’t have time to track prices daily.”

Remove the froth

PMS fund manager Shyam Sekhar said most quality trades finally become ‘BeerMug Investing‘.

Good but expensive

Sekhar said in past cycles, operators took vulgar companies and made them look good. “Now, they take good companies and make them trade at vulgar valuations. That is the difference.”

PE headache

Dalal Street veteran Basant Maheshwari said growth is the anti-gravity to high P/E stocks but when the P/E is high and the growth <20% sooner or later you will fall at 9.8m/sec^2 before making a huge thud ! “Too many chemical and consumer names qualify for that category.”

Beating inflation

Maheshwari said the best way to play inflation is by buying companies that are causing it rather than by buying the ones that are fearing it.

What not to buy

Market advisor Sandip Sabharwal for most highly valued stocks this results season might create big downsides due to massive input cost pressure and inflation.

Sabharwal said housing finance company results show significant margin stress. “As banks with a much better and cheaper deposit franchise compete more in this market standalone HFCs might see profitability pressures sustain.”

Sabharwal also advised investors to exit out of “Consumption” themed mutual fund schemes. “Most hold crazily valued #BAAP stocks in very high percentages. Most who invested in them must have already made huge money.”

You get what you deserve

PMS fund manager Porinju Veliyath said stocks that were defying gravity will be back to deserving levels. “Newbies might learn it the hard way!”

Momentum investing

Deepak Shenoy of Capital Mind said a momentum stock will always disappoint, at the end. “This is what “the end” means. But like you loved a Gavaskar, a Tendulkar and then a Kohli, it doesn’t mean you don’t care about the game because a player went out.”





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