Tweet Buster: Why most great investors start their stock picking journey with microcaps
In this week’s edition of ‘Tweet Buster’, we scan through the world of 280 characters to discover investing gems, market outlook, mutual fund gyaan and a lot more.
Active vs passive investing
DSP Mutual Fund’s Kalpen Parekh explains that there is a chance of getting beaten in both active and passive investing.
The only way to meet Nifty returns is to BE nifty : Passive investingThe only way to beat Nifty is to NOT be nift… https://t.co/ZVuqocAY9Q
— Kalpen Parekh (@KalpenParekh) 1621066567000
Are you overreacting?
Parkeh said that when the stock market moves up 100 per cent in about 230 working days, it creates an expectation that the default move every day should be up and to the tune of 0.5 per cent on an average.
When markets move up 100% in ~ 230 working days, does it create an expectation that the default move every day shou… https://t.co/p4GtPl4Djh
— Kalpen Parekh (@KalpenParekh) 1620885080000
Nifty vs Nifty Equal Weight
Parekh shared some data to prove that the Nifty Equal Weight index beats Nifty50 by a decent margin in the long run.
Since 1997 – availability of data Nifty TRI : 19 times (13% pa)NEW TRI : 28 times (14.9% pa) NEW = Nifty Equa… https://t.co/8xbEnCAAnx
— Kalpen Parekh (@KalpenParekh) 1620758223000
Wealth is for the believers
PMS fund manager Basant Maheshwari reminded investors that the primary job of a bull market is to occasionally shake the naysayers off. “The secondary one is to make wealth for the believers.”
The primary job of a bull market is to occasionally shake the naysayers off. The secondary one is to make wealth for the believers.
— Basant Maheshwari (@BMTheEquityDesk) 1621042546000
Expect the best from the worst
While replying to a tweet, Maheshwari said that during a cyclical recovery, stocks that are worst fundamentally actually give the best returns.
Clearly remember that. I just shared the idea you took the risk so keep riding. During a cyclical recovery the wors… https://t.co/EuWGRgq0QR
— Basant Maheshwari (@BMTheEquityDesk) 1620654860000
Gems from Ian Cassel
Microcap investor Ian Cassel said great investors like Warren Buffett, Peter Lynch and Joel Greenblatt started with microcaps because it is the only place in public markets where an astute investor managing a small sum has a structural advantage over institutions.
Buffett, Lynch, Greenblatt, they all started in microcap for a reason. It’s the only place in the public markets wh… https://t.co/4SoK5v1adp
— Ian Cassel (@iancassel) 1620992730000
Here’s a collection of some of his notable tweets during the week:
Often times the best opportunities for new capital are already in your portfolio. The ones that are executing. You’… https://t.co/FQ8mOcEsnS
— Ian Cassel (@iancassel) 1621111716000
Market drawdowns are only painful when you don’t have cash to take advantage of them. When you have cash you have c… https://t.co/ADeIh2F5GP
— Ian Cassel (@iancassel) 1620861127000
Investors tend to over-analyze when stocks are going down (fear) and under-analyze when stocks are going up (FOMO).
— Ian Cassel (@iancassel) 1620742391000
Great companies always make you regret selling them. Every PR. Every earnings call. You read the earnings call tran… https://t.co/ZlgtpXR182
— Ian Cassel (@iancassel) 1620685181000
Derating happens quietly
Fund manager Shyam Sekhar warned retail investors that nobody will tell them before a sector goes into derating. “People come after you only to talk about rerating. Rerating needs advertising. Derating works on the sly.”
Nobody will tell you before a sector goes into derating.People come after you only to talk about rerating.Rerat… https://t.co/AHr0zFyhzI
— Shyam Sekhar (@shyamsek) 1620643310000
Financial advisor Sandip Sabharwal said mutual fund investors should stay away from sectoral or thematic funds. “When a theme is working, salespersons will push that. However, it’s always better to be diversified in long term. Fads should be avoided,” he said.
Whoever invests in #mutualfunds should stay away from Sectoral or Thematic fundsWhen a theme is working the salesp… https://t.co/yT2SBFyalu
— sandip sabharwal (@sandipsabharwal) 1620998094000
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