Tweet Buster: Power of smallcaps, price vs value & market movies to binge on

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NEW DELHI: The benchmark equity indices rose less than half a per cent during the week gone by against a 6 per cent rise in the smallcap index and a 4 per cent uptick in the midcap index, all thanks to the Sebi circular on multicap funds.

The question is, are largecaps losing steam as the action shifts to the broader market? The jury is still out on this.

Meanwhile on Twitter, the who’s who of Dalal Street continued to share investment tips, sectoral outlook and stock ideas – many of which may hold cues on where we go from here.

Is the broader market on the cusp of a revival? Ever since Sebi tweaked the norms for multicap funds to ensure better representation of midcap and smallcap stock in these schemes, the broader market has got its wings, slowing the rally in largecap names. Both smallcap and midcap indices are rallying in anticipation of more gains. Does it mean you should put your money over there?

Here is what the market veterans say…

Value investor Vijay Kedia shared an apt video of how smallcaps have made a comeback in the market. Kedia captioned the video as: Don’t underestimate the power of smallcap.

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Radhika Gupta, MD and CEO at Edelweiss AMC, has a more balanced view. She advises investors to bet on midcaps and smallcaps only if they have high risk appetite and an investment horizon of seven years or more. Gupta says their underperformance vis-à-vis largecaps or the Sebi circular shouldn’t be a guiding factor.

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Arun Mukherjee, an investor with a knack for spotting quality smallcaps, says the rest of the year will belong to quality midcaps and smallcaps.

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Independent market expert Sandip Sabharwal, however, believes even if the Sebi circular on change in multicap funds had not come, smallcaps and midcaps would still have rallied due to the valuation gap they had developed with their largecap peers.

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And then, some market analysts and value investors doled out investment ideas. Take a look:

Stick to the basics
Mukherjee believes an investor must not lose sight of the basic principles of investing irrespective of how the market behaves. He says, “Bull or bear market, the recipe for success remains the same. Don’t get carried away in either case.”

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Don’t let bad decisions derail you
Mukherjee and market veteran Devina Mehra seem to agree on one thing: Investing involves luck and skill and a bad decision should not derail a good investor.

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Separate price from value
Mukherjee in another tweet shared how many investors let the price of a stock guide their investment behaviour versus the value of business. For Mukherjee, that’s a big NO.

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Don’t let your goal post shift
Behavioural finance expert Morgan Housel has shared the most important skill of investing, and that is to stop your goalpost from moving.

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Dividend-oriented investor? Bleh.
PMS fund manager Basant Maheshwari has a quick tip for ‘small’ investors. He says being a dividend yield investor is the biggest self-deceit that ‘small’ investors do to themselves.

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Some analysts shared a few themes to grad (and the ones to avoid) that they believe have the potential going ahead.

Tourism & Travel
Sabharwal tends to agree with RBI Governor Shaktikanta Das when he said this week that the tourism space will see a V-shaped recovery. In a tweet, Sabharwal said he is very bullish on this space.

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Pharma not really in the pink of health
Pharma stocks rose nearly 5 per cent on Friday and Nifty Pharma even scaled record high. Following this development, Sabharwal said he is exiting pharma stocks as the euphoria around them has reached unprecedented levels. He says it is a crowded trade now.

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Move over megacities
Mukherjee said the growth and upgradation in technology in Tier II and Tier III cities will be tremendous in coming years and investors must try and spot companies that cater to these areas as the next decade will likely belong to them.

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Before we wrap up today’s Tweet Buster, here’s a list of movies for all stock market investors out there. Happy binging!

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