Learning from 2021 and excited about 2022

Updated: Feb 15

Contributor - Anonymous


What I learnt in 2021?


The year showed that the texture of the markets has changed. It was marked with excesses due to risk-on behavior and unreasonable valuations across all asset categories. Things like cryptocurrencies and NFTs became mainstream, stocks like Jet Airways and Vodafone Idea gave multi-bagger returns, FIIs sold incessantly for a couple of months but the markets still did not crack as would have been expected.


WhatsApp/Telegram groups of friends, neighbors, similarly interested people all ensured that the access to information, that was earlier the preserve of well-connected fund managers and other market participants became democratized. And despite the resumption of office, the crowd had tasted blood in the market and the stock market has become a favorite pastime of the country now. However, as happens in any rapidly growing industry, it gave rise to a big cottage industry of charlatans and bad participants who duped a lot of investors.


Even though I did not understand a lot of the things and did not invest in them so did not make a lot of money this year, it was eye-opening and humbling to see the life-changing power of the markets up close and personal. People bought their houses, left jobs and made more money than they would in their entire careers.


What I look forward to in 2022?


This year will be a difficult market as we see life getting closer to normal as we move from pandemic to endemic for the Covid-19 virus and its variants. The difference between haves and have-nots will get accentuated further, as inflation will eat into the savings of the poor but increase the value of the real assets of the haves. The Government/RBI will tighten the free money flow but will increase interest rates to have a positive real rate for the year.


All this means that sticking to the basics is going to do good for the average investor. I will try to not be adventurous and stick to companies with good fundamentals and sound valuation metrics. Good stock picking will be the primary way to make money this year and good unbiased research will be the key tool to use.


I also think there will be better tools than just WhatsApp/Telegram groups that will help the average investor invest better this year. They will have information, knowledge and the wisdom of the crowds captured in them to make investing even more democratic.


Contributor - Monith


What I learnt in 2021?


When markets globally fell in March 2020 due to Covid-19 pandemic, little did I know that it is giving a rare opportunity to lap up fundamentally strong companies at throwaway valuations. However, Nifty recovered quickly & made an all-time high by end of the year. Fast forward to 2021, the story did not budge either but broader markets remained sideways until May 2021 whereas select stocks & sectorial themes still provided decent returns. During this entire crazy bull rally, I mostly remained a mute spectator since my personal portfolio was badly affected in the March 2020 crash. I was caught in a Catch-22 situation where either I had to trim down on my failed bets & enter into hot stocks & sectors or just stick to my convictions & wait it out. I chose the latter option thinking that the rally is over & we might see a good 20% correction in Nifty. I was proved wrong once again. When India was reeling at the peak of devastating Covid 2nd wave, markets seemed oblivious to the ground reality. Markets in 2021 have taught me to be humble, keep looking for good opportunities & the next big story for investments but do not bet against India.


What I look forward to in 2022?


India is currently in a phase of mega bull rally that might continue for many more years. However, anything that goes up must come down – whether it is a cricket ball or stocks. 2022 should be no different either; we might see some consolidation happening in the Nifty owing to Govt’s push for new bills in parliament. We might see more profit booking at the start of the year, after which we can expect new sectoral theme play. Depressed sectors like Housing, Industrials could see renewed interest amongst investors.


Contributor - Saurabh


What I learnt in 2021?


2021 has been year of learnings. Each day brought highs and lows. On the investment front, I made decent return after entering the stock market in March 2020.. around COVID 19 lows. But, I exited the stock market when Nifty 50 index was around 15600 thinking that it is the peak. Stock market went up another 15% from those levels.. some of my stocks like Infosys and ICICI bank did well.. I learnt the lesson that it is quite difficult to time the market so it is best to remain invested.


We started thinking about SocInvest around March 2021..it has helped tremendously with learning about new stocks every week and writing articles on some of the stocks has helped me crystallize my thought process of those stocks.. writing does help!


What I look forward to in 2022?


I am not the one to plan for really long term.. I like to define the direction and each day work towards that direction.. on SocInvest front, we will be increasing width and depth of the content with also experimenting in other presentation formats.. we will be building our team and launching the app.


In terms of investing, I will look to increase exposure in select stocks and adding 4-5 more positions.. keeping an eye on the US interest rates as it could have impact on the Indian stock market in short term.. I will continue to look at bottom-up stocks rather than sector approach.. some themes like EV or ESG or shifting of manufacturing base out of China to India look interesting..


Contributor - Anonymous


What I learnt in 2021?


First thing I learnt was that Gen Z and millennials have surely come to the stock investing party. Upsurge in stock account opening began in 2020 with 10.7 million new demat accounts being opened between April 2020 and January 2021 and the trend has continued in 2021. Between January 2021 and October 2021, more than 20 million accounts had been opened. Evaluated rationally, this has both pros and cons. Enhanced participation by citizens of the country lowers dependence on overseas investors. However, are these investors taking well informed decisions?


Secondly, startups listings have become a reality. I remember about a decade ago there used to be talk of how unlike the US, Indian stock markets would never come around to successfully listing loss making new age companies. 2021 has been a watershed year with a host of startup IPOs – Zomato, Paytm, Nykaa etc. I learnt that from seed to IPO, the startup ecosystem has truly come of age. Let’s now hope that these startups deliver on the lofty valuations that they have commanded, so as to complete the final jigsaw of the puzzle – delivering long term value for public market investors.


What I look forward to in 2022?


Quite honestly, I stayed away from investing in 2021. In my limited wisdom, the valuations were way too frothy for my comfort. P/E multiples in three digits are not my cup of tea. I am hoping that 2022 brings about a slightly more fundamentals based (value investing) approach to investing. Secondly, I look forward to continued increase in demat account openings by new participants. 56% of adults in the US invest in stocks. India by comparison is still in single digit percentage. No better way to have an Atmanirbhar Bharat than to back Indian companies and help create employment.


Happy investing! And let’s keep learning together!

 




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