Tweet Buster: What IPOs can tell you about market outlook? Plus, Sabharwal’s mantra on value investing

NEW DELHI: In 10 out of the last 11 trading days, the domestic equity market has ended in the green. Despite the fast-rising Covid cases and a slow economic recovery, bulls have managed to put up a great show. How? Liquidity push by governments and central bankers the world over.

However, time and again the lack of a “real” stimulus from the Indian government has plagued many analysts and economists. When Finance Minister Nirmala Sitharaman announced some liquidity measures this week, it again left the Street unimpressed, with some top market names forecasting more economic pain ahead.

In today’s edition of Tweet Buster, the stock market mavens react to the government’s latest stimulus announcement, discuss investment opportunities and dole out some tips to make money in the market.

Street Reacts to Stimulus
In a bid to stimulate consumer spending and capital expenditure, the finance minister announced Rs 36,000 crore worth of measures. These included Rs 28,000 crore in LTC voucher scheme and Rs 8,000 crore in festival advance scheme. In addition, sops worth Rs 37,000 crore were also announced to kick start the capital expenditure cycle.

However, many were left unimpressed.

Capital Mind’s Deepak Shenoy reacted in just one word to the stimulus.

PMS fund manager Basant Maheshwari was at his sarcastic best. “The stimulus announced today will not only accelerate India’s growth but also help revive Global GDP,” Maheshwari tweeted.

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Meanwhile, independent market expert Sandip Sabharwal raised concerns on economic recovery. Sabharwal tweeted that without “real” fiscal steps we are consigned to a low growth for a long time.

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Economists and rating agencies have flagged the need for more direct fiscal support to revive the Indian economy. International Monetary Fund’s Chief Economist Gita Gopinath this week itself called for more direct fiscal support and additional monetary easing to help India recover faster from the economic downturn. IMF expects India’s FY21 GDP to contract by 10.3 per cent as against 4.5 per cent it had estimated earlier.

Investing Lessons
Volatility is a feature that markets cannot do away with and being an investor one must learn to live with it and the Street’s ever-changing cycles. Here are a few tips that can help make you money.

– What to buy now?
Given the current run up in valuations, Sandip Sabharwal cautions investors to pick up only what’s cheap and has growth triggers going forward. He believes that next year investors will learn that valuations matter.

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– How to pick the right fund?
DSP’s Kalpen Parekh has a 4-point checklist on how to pick the right fund to invest in. Take a look!

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– Focus on long-term
Value investor Ian Cassel reiterates the importance of investing in the long-term.

Cassel says selling quickly for 5-10 per cent gains can give you good income but wealth can be generated when you hold for 100-1000 per cent gains.

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– Markets still disciplined?
Helios Capital’s Samir Arora believes that given the sombre listing for IPOs despite hefty subscription is a sign that the market is still disciplined.

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