Tweet Buster: Risk of blindly chasing multibaggers; smart & dumb money

NEW DELHI: This week's market moves helped the bulls take the equity indices to four-month highs on Friday, extending their rally into the fifth straight week. Even as some seasoned investors kept on pointing at the dichotomy between the market and the economy on Twitter, others chose to share stock-specific advice and investment tips. Here is a sampling of what was buzzing on Dalal Street this past week:

Samir Arora of Helios Capital made fun on soaring PE valuations of stocks using some very famous dialogue from the movie Spiderman :



Independent market expert Sandip Sabharwal warned investors to not get enamoured by the idea of multibaggers. He says the investment strategy should be to consistently beat the market by just 3-5 per cent every year. In 5 years, you would have outperformed 99% of fund managers.


iThought co-founder Shyam Sekhar too warned investors against letting the idea of spotting multibaggers tempt them into piling money in a stock, especially when you hear that a company made 100X returns or an investor spotted multibaggers.

Sekhar's tip: When the story looks too good, that's when it gets tomtomed the most.


PMS fund manager Basant Maheshwari, however, believes not taking risk is the biggest risk of all in this market.


Market veteran Shankar Sharma had a thought about smart money and dumb money in the market, and this will challenge what has been initially thought. He says "I have never seen foreign investors make money in India, whereas locals always win. So, when I see foreigners lapping up an Indian stock, I wonder who is smart money and who is dumb money?"


Sekhar believes we don't treat great selling opportunities and great buying opportunities the same way. He says selling overvalued and buying undervalued are equally important.


Stock-specific Ideas

Sabharwal believes a correction in consumer stocks can be a good entry point for investors.


While many investors are gung-ho on Infosys, Sabharwal believes if the US stimulus story fades, growth in IT could slow down.


Sabharwal warns of higher retail NPAs in the coming periods. Would that spell bad phase for bank stocks?