All investors seem to agree that equity valuations are not to their liking. They would prefer to buy when valuations are cheaper. Yet, they don’t want to stay away and are willing to compromise valuations to participate. More interestingly, they seem to be avoiding debt exactly when it is a…
The interim budget was hardly an event. There was hardly much given away as freebies, concessions or incentives to voters on election eve. On the policy and taxation front, the budget assured continuity. Beyond giving the assurance of continuing to work for the poor, farmers, women and youth, the budget…
Investor behaviour in SIP programs is a good indicator of behaviour, expectations, and conviction. If you look at where investors would start a SIP without the slightest hesitation, you will be surprised by how much that choice is driven by recency bias. While every investor knows that applying recency bias…
The rising froth in the PSU space only showcases the extremities of investment behaviour. We are prone to swing to the other extreme when we remain too long at one extreme. This is exactly what we see in the PSU trade. Cut to 2001. We were just recovering from the…
Searching actively for new ideas in a broadly overvalued market does not mean compromising on our investment principles. Active pursuit of investment opportunities is a constant activity for investors, professionals and individuals alike. There is no escaping that activity. But performing that activity responsibly is the duty of every one…
When it is very easy for companies to raise capital, it is also the best time for investors to take out capital. The excessive liquidity sloshing all over a sector or theme makes it possible to both raise capital as well as release capital. What we are seeing in our…
Expectation setting is a very intrinsic part of investing. Setting our expectations correctly prepares us better to face market volatility. This is all the more crucial when we exit a hugely productive year of investing. The natural tendency would be to expect a similar year after a hugely successful one.…
What works in one year rarely works in the next. If an asset class performs well for two consecutive years, its capacity to perform well in the third is relatively limited. Only under conditions of euphoria do you see such performances happen. Looking back at 2023, it belonged to small…
FII buying, when done at high velocity, causes a sudden market reset. Sentiment reverses swiftly. The market’s attention shifts to focus intensely on what the FII’s are buying. Selling slows down in the parts of the market seeing FII buying. Buying gathers momentum in FII favourites. Momentum gets induced in…
Nobody wants to be under-invested in equity right now. The visibility on the political front changed the market view of many market participants, of both experienced and new entrant genres. The fear is that liquidity will make it even more difficult to invest in the market, and waiting for a…
With the current madness of the IPO market, I am reminded of something I wrote in 2012. Here is that piece. IPO and stock investing are almost synonymous to the investor. Investors view IPOs as the most preferred entry point into the stock market. The reasons are historic. IPOs had…
The week saw IPOs collect Rs. 3.67 Lakh Crores. This clearly signals a euphoric response to IPOs from Indian investors. The investor appetite for equity seems unrelenting even as other asset classes take a back seat. This would mean that companies waiting on the sidelines to IPO will now hasten…