Tweet Buster: Why Taleb sold his Bitcoin holding & Cassel on how long to hold a stock

Tweet Buster: Why Taleb sold his Bitcoin holding & Cassel on how long to hold a stock

NEW DELHI: As foreign investors pumped in over Rs 22,000 crore into domestic equities in the first two weeks of this month, Sensex gained 1.6 per cent last week to touch fresh record highs. The rally deepened in the broader market, as Nifty Smallcap index shot up almost 4 per cent.

Bitcoin touched a new high of $48,930 in Asian trade after MasterCard and US bank BNY Mellon moved to make it easier for people to use the cryptocurrency. The coin has gained over 60 per cent so far this year in a head-turning rally, but the Indian government is planning to ban it, including all other private cryptocurrencies.

In this edition of ‘Tweet Buster’, we scan the world of 280 characters to bring out the best of investing gems, money-making ideas and the do’s and don’ts of the stock market.

Bitcoin a failure?
At a time when the wind seems to be blowing in favour of Bitcoin, Nassim Nicholas Taleb, author of ‘The Black Swan’, said he has been getting rid of his Bitcoin as a currency is never supposed to be more volatile than what you buy and sell with it. “You can’t price goods in BTC. In that respect, it’s a failure (at least for now). It was taken over by Covid denying sociopaths w/the sophistication of amoebas.”

Is trading a sport?
Zerodha CEO Nithin Kamath compared trading in stock markets with playing a professional sport where only the fittest ones will survive. “Imagine waking up one day and saying I will compete in the Olympics tomorrow. Thinking that you will easily make a lot of money trading in quick time is as ludicrous an idea as that.”

MF portfolio strategies
Radhika Gupta, MD and CEO, Edelweiss Asset Management, shared her core mutual fund portfolio: Liquid/arbitrage fund, balanced advantage fund, mid-cap/small-cap fund, international fund – developed and international fund – emerging. “Why no large cap fund, everyone asks? I believe BAF gives you a similar upside with lower risk and drawdown. The addition of mid/small cap via SIPs is for the long term alpha. Barbell approach,” she said.

Fantastic Feb
Independent market expert Sandip Sabharwal said if Nifty ends February at the current levels it will be the best February for the market in the last 25 years.

Trading helps investing
Shankar Sharma, Vice Chairman and Joint Managing Director of First Global, said he is a better long term investor now, because he was a trader for a long time.

How long to hold a stock?
Microcap investor Ian Cassel said the key to investing is holding your winners as long as you can and selling your losers as quickly as you can. “Your holding period is directly tied to management execution. It could be 3 months or 30 years. It’s entirely up to them.”

Volatility vs risk
Cassel said to be a successful microcap investor you don’t need a high-risk tolerance but a high volatility tolerance.

ITC dividends are worth it?
iThought co-founder Shyam Sekhar appeared to be disappointed with ITC after its Q3 results were announced last week. “The management is not delivering enough on product verticals. FMCG is a slow gain game for ITC. The company is adding business when existing lines aren’t profitable enough. Dividend is a poor substitute for buybacks. We pay the price.”

P/E worries
Samir Arora of Helios Capital reminded investors that some consumer companies in India, from paints to biscuits to underwear, trade at near 50 to 75 per cent premium to P/Es of companies like Amazon and Netflix etc and at 200 per cent premium to companies like Google.

Not just FOMO
Behavioural finance expert and author of the book ‘The Psychology of Money’, Morgan Housel, said more powerful than FOMO (fear of missing out) is the opposite — denying or ignoring something obvious about an investment because admitting you were wrong is too painful.

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