NEW DELHI: It was another week of bloodshed in the domestic stock market, as the benchmark indices logged their biggest weekly fall since the 2008 Global Financial Crisis. By the end of the week, most of the stocks were trading at levels seen many years ago.
With the coronavirus scourge now rearing its ugly head in India, what could be in store in the weeks and months ahead? Amid so much uncertainty, with stocks at multi-year lows, market veterans see an opportunity for investors. They shared tips on how to best navigate this crisis.
Here’s a look at what some of the leading voices of Dalal Street tweeted during the week gone by:
State of the market
Given the acceleration and quantum of market fall, equity portfolio manager Ravi Dharamshi tweeted that 2020 is a fast-track course than the 2008 GFC.
2020 is a fast track course on 2008 #MarketSlump #markets
— Ravi Dharamshi (@ravidharamshi77) 1584551255000
Independent market expert Sandip Sabharwal shared an interesting fact: the total world market capital lost so far is now 10-times India’s GDP.
World Market Capitalization has collapsed from $ 90 Trillion at the end of 2019 to $ 55 Trillion now To measure th… https://t.co/h7qUd6K0EN
— sandip sabharwal (@sandipsabharwal) 1584762870000
Morgan Housel, Partner at The Collaborative Fund, shared two insights about stock market crashes; a) they tend to go too far but b) they recover before the real economy.
The two most important parts of market crashes: – In hindsight they always go too far. – They always rebound wel… https://t.co/pGoLwqbFub
— Morgan Housel (@morganhousel) 1584362245000
Given the massive fall in the indices, Housel says a 5% move in the market either way is now called “unchanged”.
If the market closes up or down less than 5% it’s now called “unchanged.”
— Morgan Housel (@morganhousel) 1584635540000
Market veteran Shankar Sharma expect NBFCs to get hurt badly in this selloff. His next question: Are we staring at IL&FS – 2, 3 & 4?
Looking at the price action of several NBFCs last few days, it’s abundantly clear that the market is saying many wo… https://t.co/GzJTCUvduo
— Shankar Sharma (@1shankarsharma) 1584676000000
Call for action
Lack of concrete government action on the economic front has left a few investors frustrated.
Sabharwal, quoting examples of other developed economies and their responses to fight the virus, said lack of government action is creating a lot of hardships.
UK Chancellor of Exchequer @RishiSunak has announce a huge No of steps already to alleviate economic stress. #BOE h… https://t.co/cQJX6NNjW0
— sandip sabharwal (@sandipsabharwal) 1584786278000
Sabharwal advises the government to raise the fiscal deficit target by 1%.
Sir, @narendramodi it is time to think big on the Economy Just minor tinkering of MSME dues, NPA recognition defer… https://t.co/kDkIaaMFKz
— sandip sabharwal (@sandipsabharwal) 1584706686000
Meanwhile, Kotak AMC’s Managing Director Nilesh Shah had a few other suggestions to improve investor confidence amid the meltdown in the stock market.
Support Investor Confidence in crisis time by – Restore tax exemption on LTCG. Any way there will be no collectio… https://t.co/KtSSJLjB53
— Nilesh Shah (@NileshShah68) 1584622213000
What should investors do?
iThought co-founder Shyam Sekhar is of the view that a bad market is the best time to begin better investment habits.
A bad market is the best time to begin better investment habits.
— Shyam Sekhar (@shyamsek) 1584458946000
Sabharwal says good quality stocks have corrected 40-50% from highs and for the brave-hearted and those thinking long term, this is an investment opportunity that they must not miss. He believes this is the best time for value investors.
A high quality, low or no debt company’s stock falls 40-50% from the top due to the entire #Covid19 issue For thos… https://t.co/bpoQnZPy82
— sandip sabharwal (@sandipsabharwal) 1584611882000
#CBOE #VIX collapse is the first indication that markets are close to bottoming The next couple of weeks will still… https://t.co/fXdkQBBeKZ
— sandip sabharwal (@sandipsabharwal) 1584716242000
Dharamshi echoed Sabharwal’s views and said “only patient, long-term capital will trump ” from market mayhem.
There is paucity of people who can think beyond next 1-2 months, beyond the current panic, beyond corona virus. Mar… https://t.co/YvSQtbCPyB
— Ravi Dharamshi (@ravidharamshi77) 1584419936000
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