December 4, 2021

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Tweet Buster: What happened when Benjamin Graham broke his own rules

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NEW DELHI: As investors continued to worry about rising bond yields, Sensex witnessed weakness but still it managed to log 1,305 points, or 2.65 per cent, gains for the week gone by. FPIs have chosen to book profits and pulled out over Rs 5,000 crore from the domestic market in the first week of March. In signs of easing nervousness on Dalal Street amid vaccine rollout, fear gauge India VIX dropped over 9 per cent.

In this edition of Tweet Buster, we scan the world of 280 characters to find out how market veterans are reacting to the emerging market dynamics and try to spot money-making ideas, investing strategies and behavioural tips.

Time for bonds now?
Radhika Gupta, MD and CEO, Edelweiss Asset Management, said one should buy equities when prices fall and buy bonds when yields rise.

Counter-trend Outlook
Nikhil Kamath, co-founder and CIO of Zerodha and True Beacon, said frothy stock valuations have compelled him to take a counter-trend outlook and hedge 60 per cent of portfolio. “Fund managers usually don’t voice binary outlooks. At the frothy valuations we sit on today, we take a counter-trend outlook and are 60 percent hedged. The trend is up, and no one can time when the trend changes. We would rather miss 50 % of the upside vs. risking principal.”

Count the screens
Zerodha CEO Nithin Kamath, who stopped trading after starting the discount brokerage firm, shared how his brother Nikhil Kamath’s trading desk looks like.

Lucky mascots
iThought founder Shyam Sekhar advised investors to stick to their lucky mascots. “Some stocks just keep giving you money again & again. They are your lucky mascots. Every cycle, you can go back to them when they are out of favour. Buy them. Hold them. Sell them when cycle peaks. Cycle Repeats.”

Stay away from noise
Sekhar said investors should built their positions quietly, hold them patiently and sell carefully. “Never talk about your positions while doing all three. Focus on what you need to do. Noise affects your investing.”

Contra bets
“If you took a contrarian call and bet on select PSU stocks instead of FMCG, insurance and auto stocks at the market bottom, where would you be today in return terms? Choices matter in delivering superior returns,” Sekhar said.

Warning for home loan takers
To all those trying to take a home loan to take advantage of cheap interest rates, independent market expert Sandip Sabharwal has a piece of advice: When repo rate goes from 4 per cent to 5 per cent, rate will go to 7.7 per cent.

Time to be cautious?
Sabharwal said just when all brokerages went heads over heels to upgrade Indian equities, crude oil decided to stage a rally. “History has shown when all the FII brokerages turn extremely positive together, normally it is the time to be cautious.”

Rules are meant to be broken
Microcap investor and founder of MicroCapClub Ian Cassel recalled that in 1948, Benjamin Graham, widely known as the father of value investing, broke his rules.

Maturity sign
Cassel said a great sign of investment maturity is when you can buy a stock at a higher price that you passed on at a lower price. “Sometimes a stock is a better buy at a higher price than it was at a lower price. It needed time to mature and develop from a speculation to an investment.”

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