Dipan Mehta, Director, Elixir Equities, says “I would be extremely cautious in 2024. It is good to be a bit liquid at this point of time. I am seeing that demand is slightly softening across sectors. Base effect is having a big impact on corporate earnings. And that is going to be visible right through this earning season and the next as well. It is perfectly fine. If you want to make money in the bull markets, you have to traverse and kind of manage the bearish phases within these bull markets as well. So I think everybody will be tested this year. ”
Are markets trying to simply find a reason for Tuesday’s fall?
Dipan Mehta: Tuesday’s fall was because of Zee. It really dampened the sentiment over there. And also, there was nothing of a positive trigger in terms of earnings per se. And overall, FII selling was visible on the screen, which is why we saw this kind of a sell-off. One clearly cannot attribute any reason why such a loss takes place. But you know very well that when a selling pressure comes, the fall in the market is much faster than the rise. Panic moves markets far more quickly than greed. So that is what has happened over there.
I think a lot of trading positions got unwound. Brokers would have called up their clients to reduce their positions as well because margins may have also been triggered. And on the whole, the overall leverage positions also would have come under pressure. That’s what has taken place. And we may see more of this in the coming weeks as well.
If luck made you money in 2023, our tagline this year is that risk and skill will help you make money in 2024. Would you agree with that, that it was luck in 2023, it will be skill and risk management this year?
Dipan Mehta: You put it really very well. I think 2023 and for a latter half of 2022 were great years for individual investors, they saw their portfolios outperforming the Sensex and Nifty. 40-50% types of returns were generated. That is not expected to be repeated in 2024. It is going to be very, very tricky, very stock specific, very selective. Your research skills also will be tested with stocks with sectors you are in. This is going to be a big, I would say, an important year for testing the conviction of investors, whether in mutual funds to SIPs or in direct equity, 2024 is going to test your conviction.
That is going to be really the defining moment this year. I would be extremely cautious. And it is good to be a bit liquid at this point of time. I am seeing that demand is slightly softening across sectors. Base effect is having a big impact on corporate earnings. And that is going to be visible right through this earning season and the next as well. It is perfectly fine. If you want to make money in the bull markets, you have to traverse and kind of manage the bearish phases within these bull markets as well. So I think everybody will be tested this year.
