Volatility Cup (Nilesh Shah, Kotak MF)
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A friend has written about yesterday's match. I have taken it a step
further into the realm of the stock market. Would like to have your reactions,
friends.
(1) India scored 85/5 against Pak's 83 all out, but 3 Indian batsmen got out
for a duck; none for Pak,
(2) In a low scoring match, India's best bowler Ashwin was the worst of all
Indian bowlers 3-0-21-0. Only Wahab Riaz was worse than him in the match. Easy
(but completely unfair) to conclude from a single match that Ashwin was the
worst bowler
(3) The second highest score in both teams was "extras". If we
total up the runs in both innings, "extras" was second highest score
after Virat. "Extras" accounted for more than 17% of total runs scored
n the match.
(4) Only 18 boundaries were scored in the entire match. Virat hit 7 of
those, just one less than the entire Pakistan team's 8. Not a single six in the
whole match.
NOW HERE IS MY INTERPRETATION FROM A 'MARKETS PERSPECTIVE'.
What happened yesterday was a complete and unexpected 'sell off' causing
severe volatility.Hence even class players (companies) looked like duds. Had Rohit Sharma, Ajinkya Rahane, Suresh Raina and Ashwin been companies,
would an astute investor write them off???
Similarly when the companies in a mutual fund scheme lose value unusually in
a 'sell off' causing the NAV ( total score ) to fall sharply, be smart, be
astute, gain the maturity. Never write them off.
Instead think about yesterday's game.
For they will all rise without a warning. Look at Yuvraj and Ashish Nehra.
Despite age catching up with them, they continue to deliver.
Invest in the Indian team if you believe in them. Ignore volatility caused
by some unusual matches.
If you believe in the story of India, keep fears of the market in your
closet, lock it and throw away the keys.
Commerce Graduate with more than decade and half years of experience in capital markets