Home > Finance > Zerodha: Tweet Buster: Why Zerodha squared off all intraday positions after NSE tech glitch

Zerodha: Tweet Buster: Why Zerodha squared off all intraday positions after NSE tech glitch


NEW DELHI: Triggered by a sharp rise in bond yields, Nifty closed the volatile week with a cut of 3 per cent. A 26 per cent spike in fear gauge India VIX reflected the changing mood on Dalal Street. Led by a commodity boom, Nifty Metals was the only sectoral index that ended in the green with a weekly gain of almost 8 per cent.

In this edition of Tweet Buster, we look beyond puns and memes related to the NSE glitch to help you understand market outlook, opportunities and investing strategies so that you do not end up losing money in a volatile market.

A Wednesday!
After the NSE tech glitch on Wednesday, Zerodha CEO Nithin Kamath said it was a no-brainer for them to square off all NSE intraday positions on BSE. In this long thread, he said until 3.20 pm, they didn’t know timings would be extended. “So sticking to normal square-off timing was the right thing to do,” he said.

Zoom out
As the market mood turns bearish, Radhika Gupta, MD and CEO, Edelweiss Asset Management, says: “Bad days happen and they feel like the end of the world. But 3-5 years later, you barely remember them, and laugh at why they were a big deal. Market corrections are like that too. Today’s big event is usually small in the long term. Zoom out.”

The commodity risk
Independent market expert Sandip Sabharwal warns that the extraordinary rally in commodities is putting at risk growth and earnings growth for the next financial year. “Crude Oil has now doubled since end of October. Copper Up 40% in the same time, Steel up 40%, sharp rally across the board. Steriods always have side effects.”

SBI overhyped?
Sabharwal feels that the most overhyped stock in the stock market is none other than SBI. “Brokerages have crazily jumped in to upgrade the stock while nothing really has changed for them (except that it was cheap given the rally in private sector banks) It will mostly disappoint on most parameters in the next financial year.”

For the long haul
Kalpen Parekh, President at DSP Mutual Fund, reminds investors to remain focussed on the long term and ignore all short term fluctuations. “Long term equity returns ~ 12% is one side of the coin. Short term fluctuations frequently like today is the other side of the coin. The coin will always have these two sides – be aware of both.”

MF woes
iThought co-founder Shyam Sekhar said largecap mutual funds that avoided Reliance were hurt badly and now their

under ownership of metals, commodity and mining stocks will hurt them even worse.

Beware of the messiahs
Sekhar says in every cycle, newer messiahs emerge to justify excessive valuations at market peaks. “The herd always believed them. Only to be deceived later. That’s my memory of every bull run.”

Just Chill
Sekhar calls it #ChillMaadi (just chill) investing.

How to average up
Microcap hunter Ian Cassel said when buying a new stock he focuses more on valuation but shifts his focus to execution on subsequent purchases. “If you are doing it right you’ll be averaging up.”

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