Holding Period Return

Tweet Buster: Tweet Buster: What the Snakes and Ladders Game tells us about investing in a bull market

By James Swift
Over the past year and a half, several stocks across the spectrum have given multibagger returns, but it was the preferred stock of ITC retail investors that stole the thunder last Thursday with just a 7% rally, triggering a memes party on Twitter and other social media platforms. While traders are still debating the reasons for the tobacco-hotel conglomerate’s sharp rise, analysts say the underdogs could lead the next leg of the rally on Dalal Street.

In this edition of Tweet Buster, we sift through the social media channel to bring out the best in investing, market strategies, and the dos and don’ts of navigating a volatile market.

The goldfish investor

Edelweiss Mutual Fund Managing Director and CEO Radhika Gupta took a story from Ruskin Bond and said investors should be like goldfish. “Lots of noise, news and social media are there to fuss you around, squirm, scream and change direction. Don’t get hit. Corrections are coming, like those neighborhood cats. But they also end. “she said. noted.

Invest vs trader

Value investor Vijay Kedia likened futures trading to milking a bull.

For options traders

Zerodha co-founder Nithin Kamath said from September 27 that market stop loss (SL-M) orders will not be available for options because NSE is shutting down the installation. “This should help avoid abnormal transactions and significantly reduce its impact.”

For higher and more stable yields

Kalpen Parekh, of DSP Mutual Fund, said that we are unaware that higher returns come with a lot of temporary uncertainties and therefore we cannot manage volatility. “The FD have taught us that we get stable returns every year. Equities have taught us that we get higher returns. Both of these results make us strive for higher, stable returns.”

Investing is a game

Parekh said that in the game of snakes and ladders there are three snakes between the numbers 90 and 100 that take you all the way. “It’s important to be lucky and careful with higher numbers. This is also true for valuations in such high ranges. Large corrections or low returns occur from such high valuation levels.”

Protection against volatility

Parekh said that a fund with lower volatility and return can still generate a higher return than a fund with higher fluctuations and returns. “Low volatility funds keep our anxieties low and we end up staying invested longer. We own DFs as long as the returns are linear.”

For ITC fans

Independent market expert Sandip Sabharwal said ITC’s capital allocation was very poor. “Very few companies had the cash flow they did, but the strategy was always a mash-up. Management is too comfortable with comfortable offices, good salaries, ESOPs, etc. No motivation, ”he said.

Market vs economy

Sabharwal said short-term stock movements and the long-term direction of the economy are two different things. “The stock markets cannot go up directly. If they have a period of frantic movement, the decline will be painful for those who do not recognize the risks,” he said.

Gems by Ian Cassel




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