Tweet Buster: Aswath Damodaran on what’s driving markets

NEW DELHI: Better-than-expected earnings numbers for June quarter helped the domestic equity bulls tighten their grip on Dalal Street, discounting worries about a weak economy on the ground.

Fast-rising Covid infections are a concern for some. However, the market seems to be taking it in its stride. Yet market veteran and PMS fund manager Basant Maheshwari still finds the whole situation mind boggling.

Corona cases and the stock markets are engaged in a head on linear dash ... all the selling is being absorbed. Ho kya raha hai?
— Basant Maheshwari (@BMTheEquityDesk) 1595332754000

According to some analysts, this stocks rally has been the result of polarisation. Nilesh Shah, MD of Kotak AMC, shared a graph showing how polarisation is showing not only in Indian market, but also on Wall Street.

Polarization is visible across the world. https://t.co/C4GbWsAPcE
— Nilesh Shah (@NileshShah68) 1595505536000

Valuation guru Aswath Damodaran, however, has a contrarian view on what’s driving money into riskier bets, and says blaming it on the US Fed is a lazy argument. “I argue that it is the resilience of risk capital (VCs, IPOs, high yield debt) that explains both the market comeback and why risky stocks are doing better than safe ones,” he tweeted.

In my 12th update on COVID markets, I argue that it is the resilience of risk capital (VC, IPOs, high yield debt) t… https://t.co/KwxucN39Us
— Aswath Damodaran (@AswathDamodaran) 1595539954000

Independent market expert Sandip Sabharwal says the Indian market is rallying on the hope of a Covid vaccine. He says in case of a no-vaccine scenario by March 2021, markets could fall 30-50 per cent from current levels.

Remember#StockMarkets are where they are under the assumption that there will be a #Vaccine by end of the yearTh… https://t.co/wW6s9bPUZN
— sandip sabharwal (@sandipsabharwal) 1595609189000

iThought co-founder Shyam Sekhar says if anyone wants to make money in this market from here on, then they need to first protect themselves from global market volatility.

If you want to make outlier returns from here, you need to first ensure you have protected yourself adequately from… https://t.co/WMrYyHuGpm
— Shyam Sekhar (@shyamsek) 1595416656000

Sabharwal said it’s time for investors to go back to basics. “’Buy when everyone is selling and sell when no one wants to sell’ are not just catchy slogans but the essence of investing,” he said.

Buy when everyone else is selling Hold when everyone starts buyingSell when no one wants to sellThis is not mer… https://t.co/tRs4zlaoni
— sandip sabharwal (@sandipsabharwal) 1595675938000

Value investor Abhishek Basumallick says one can get a multibagger stock when earnings, liquidity and narrative are all aligned in his favour.

Stocks and markets move on three things:1) Earnings2) Liquidity3) NarrativeYou get a multi bagger when all thr… https://t.co/ZOVo9pihpR
— Abhishek Basumallick (@a_basumallick) 1595570586000

Market veteran Shankar Sharma told investors to steer clear from sectoral or narrow-focussed funds. He calls them the worst investment decisions to be made by anyone.

Amongst the worst Investment decisions anybody can take is to Invest in a sectoral/ narrow focus fund, ie, Tech fun… https://t.co/S2ZmzqhYQa
— Shankar Sharma (@1shankarsharma) 1595402619000

Just FYI, if the market holds on to current gains by the end of this month, then this will be the best July for the market in 20 years.

If the current market gains hold till the end of the monthThis will be the best July for the stock markets in the last 20 years....
— sandip sabharwal (@sandipsabharwal) 1595319290000