Sir, I would like to know your thoughts about retail liquidity in the Indian market. How do you see investments from retail in mutual funds or direct equity in the market? And to be more specific, is there any connection between the returns that are being generated in the past 3-4 years and the liquidity that is coming from retail, and if there is a connection, does that mean that the returns will reduce if these retail leave?
I read comments of retail sir, to some extent, it appears educated people have at least some idea about how things work, so I am guessing these folk will remain at least with mutual funds, but I see a lot of people who don’t have much idea about what is what but are enthusiastic about just buying something, it appears they are in good numbers and are putting in good money, mostly in lesser known small names, beyond Nifty 500. I have no idea about what percentage these kind of participants constitute in the overall liquidity, and what would be the impact w.r.t returns if they leave?
I am participating right with these retail sir, with somewhat better idea, but I don’t know what portion of my return should I attribute to liquidity in the overall market? I am getting profit with my shorter term trades only because someone exists on the other side and is willing to buy from me at a higher price, and if that someone disappears, I would be holding the bag, as there is no greater fool.
Have you felt this way too, in the sense that, you have always had good returns in tandem with your knowledge and experience, but in the past 3-4 years, you have had stellar returns, returns beyond your expectations, which are quick too, that even you got the feeling of ‘this should not happen’.
I know that you take bigger bets, with both fundamentals and technicals in place, having a holistic view of the market, you identify froth, you go where the puck is, you know which sectors to not look at, all of which we get to know as you post about them from time to time, but have you had the feeling in the past few years that things have become too easy, or do you feel liquidity from retail is not that powerful to move the needle and you are reaping what you had sown, so even if retail flush disappears, you will continue to do good, and to some extent, it applies to us as well.
Or is it that bull markets constitute all kinds of participants, nothing surprising here, then does this mean, bear markets constitute only learned participants, so no one is in a hurry to buy, and as such, momentum essentially does not exist in bear market?
Thank you.
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