Tweet Buster: Zerodha CEO Nithin Kamath’s tip for options traders

While the new Delta variant is keeping market participants on the tenterhooks, the launch of Zomato IPO next week has left both traders and investors excited. Analysts are keeping a close eye on Q1 numbers, the stance of global central banks, inflation trajectory and bond yields.

In this edition of Tweet Buster, we come up with not just stock ideas but also strategies for traders and investors to help you navigate a volatile market.

Active vs Passive Investing

Radhika Gupta of Edelweiss Mutual Fund says one should buy passive funds because they are simple solutions to investment problems and not because they may beat active funds.

Recipe for disaster

Zerodha CEO Nithin Kamath said most buy option positions are in losses because they are of intraday trade. “Exit with small profits but held overnight when in losses (also triggered from fear due to high exposure). This is a sure-shot way to lose money,” he said.

SIP by Sip

Sanjiv Bhasin of IIFL Securities says recommended SIP in 3 stocks to ride the volatility – Reliance Industries, HDFC Bank and Maruti Suzuki.

IPO Mania

Dalal Street veteran Ravi Dharmashi said the demand for IPOs does not mean anything for the market as that money was never meant to be deployed in the market. “It is the lending book of NBFCs which is temporarily deployed in an IPO (7 days) and then will rotate into another IPO,” he said. IPO allotment is inversely proportional to the demand. As institutions and HNIs realise that NBFCs lending books are getting full, they put a bigger application just to get some meaningful allocation, he said.

Nifty vs Nifty

Kalpen Parekh of DSP Mutual Fund explained how to beat Nifty using Nifty Equal Weight index. “A smart investor benefits by rebalancing between the two and invests in what is going through medium-term under performance,” he said.

Loss is the real Guru

Microcap investor Ian Cassel said investing’s greatest lessons can’t be taught in a book or in a classroom. “The lessons have to be experienced and often times the best teacher is loss.”

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