Bitcoin vs Gold: Tweet Buster: Can Bitcoin replace gold? And how to live with high PE

NEW DELHI: As the stock market turned lacklustre last week amid a spike in bond yields and the firming up of the Dollar Index, Bitcoin hogged limelight after its market value surged to more than $1 trillion for the first time. Those looking for diversification of portfolio for hedging purposes are showing preference for cryptocurrencies over gold.

In this edition of Tweet Buster, we bring you the best of investing gems, stock market outlook and money-making ideas — all in 280 characters.

Bitcoin the new gold?
PMS fund manager Basant Maheshwari said over the next few decades, Bitcoin has the best chance to replace gold.

Ban vs regulation
Deepak Shenoy, founder and CEO of Capital Mind, also came out in support of cryptocurrency, saying it is a useful asset class. “I don’t support an outright ban on bitcoin in India, but I believe it’s inevitable that it gets substantially more regulated. It’s going to be impossible as a currency even if some people want to try, but it’s a useful asset class.”

Risk reduction strategies
Value investor Abhishek Basumallick shared advice on how to reduce risk by buying quality, staying within one’s circle of competence and having adequate diversification along with a stop loss.

Demat rush
Zerodha CEO Nithin Kamath said the last month was big for the stock broking industry. “The best year for the market since 2010 was by far 2014. Nifty was up more than 30% and the industry added 13 lakh new demat accounts in 1 year. And, January 2021, just in 1 month 17 lakh new demat accounts were added.”

Isn’t renting better?
Radhika Gupta, MD and CEO, Edelweiss Asset Management, questioned the financial logic of buying a house. “If you think investing is only logical, and not emotional, think about real estate ownership. Any rental yield math tells you buying in a big city makes no sense, but falls flat in front of the need to have a roof over the head.”

It’s all in the mind
Ravi Dharamshi of ValueQuest Investment Advisors shared some tips on behavioural investing to help you navigate the ups and downs of market. “If you got bearish looking at valuations or extent of rally or lack of stimulus from govt at any point last year then it is virtually impossible for you to turn bullish now. It is your mind playing games with you. You can see the bend of the curve in every down tick.”

Kalpen Parekh, President at DSP Mutual Fund, shared a useful value investing tip: Focus on growing EPS and not worry too much about high PE.

Equity funds vs hybrid funds
Parekh said during the last 10 years, equity (Nifty TRI) delivered 12.2 per cent returns while equity & bond funds that always have 30 per cent in bonds have given a similar return of 12.5 per cent with lower volatility.

Time to sell FMCG?
Independent market expert Sandip Sabharwal has turned bearish on consumption stocks. “Consumption stocks could be most impacted as rising inflation across the board impacts disposable incomes. Just the rise in petrol and diesel over the last 4 months takes away ~ Rs 250,000 crore. They are also very richly valued and priced for perfection. Better opportunities elsewhere,” he said.

Investing bias
Sabharwal shared an example of how an investing bias can make you miss an opportunity.

How to find multibaggers
Microcap hunter Ian Cassel explained how a sustainable 10-bagger would look like.