Events & Expos

Filmy dialogues and finance lessons – a recap of the high drama in 2022

Data is funny; it conceals as much as it reveals. The Nifty was up 4.3% in 2022. As tepid as it may sound, it masks the drama investors witnessed in 2022. A sharp crash in tech stocks, the different shades of Russian president Vladimir Putin and his Chinese counterpart Xi Jinping, and a stirring inflation monster were a few events that kept us on our toes. New investors had only seen a dream run post-covid pandemic of 2021. The year 2022 was a rude shock.

Short-term market movements elicited the movie buff in me. Movie dialogues make for great metaphors. I have penned down some to recap the year 2022.

“I’ll have what she’s having” elicited more than a few chuckles in When Harry met Sally, decades ago. Nothing amusing will come out of it if an investor follows it. Young investors should ‘skip the FOMO’ (fear of missing out). When asked why they have invested in cryptocurrencies, 75% of them say, “My friend made a lot of money in XYZ coin…”. Investing has become increasingly social but investing in an asset class because one’s neighbour, friend or a random person has done it is a recipe for disaster. Invest in what you understand.

3 Idiots is as timeless as they come. “Kaabil bano, kaamyabi to jhak marke peeche aayegi” (Chase skills; success will chase you on its own). The dialogue is apt for the IPO (initial public offer) market. In 2021, the unicorn had become the country’s favourite animal and founders’ new hero. Investors rushed to pour money in popular new-age IPOs. Traditional metrics like P/E (price to earnings ratio) and profitability went for a toss until 2022 struck and the listings came a cropper.

The IPO market is just readying itself for 2023. It’s important to ask the tough questions. Chase profitability; valuations will follow on their own.

No movie article is complete without a Shah Rukh Khan movie. In Jab Tak Hai Jaan, he tells Katrina Kaif, “Har ishq ka ek waqt hota hai. Woh hamara waqt nahi tha par iska yeh matlab nahi hai ki woh ishq nahi tha” (Every love has its own time; that time was not ours; but it doesn’t mean that we were not in love). 2022 was a year when trends changed. Growth stocks made way for value. PSUs (public sector undertakings) and old economy names made a comeback. Domestic funds outperformed the international ones. A lot of investors have been asking if they should move from growth to value, or international to domestic. Every strategy and asset class has its time. A wrong time doesn’t make an asset class bad. The holding power is a superpower.

The Joker’s “Why so serious?” from The Dark Knight has created countless memes. With the rise of financial influencers over the last few years, investment advice got a little too ‘not serious’. Anyone with a following could write a viral IPO thread on Twitter or get lakhs of views on a catchy YouTube video. The perils of taking advice from just anyone unravelled this year. The market regulator, Securities and Exchange Board of India (Sebi), is correctly looking to regulate finfluencers. Social media is not bad, but money is a serious business. You don’t take advice on a heart surgery from a YouTuber, do you?

Next up is Raaj Kumar’s oh-so dramatic lines in Saudagar: “Hum tumhe marenge… lekin woh bandook bhi hamari hogi aur waqt bhi hamara hoga” (I will kill you… but at my time and with my gun). It was India’s year. At a time when recessionary fears hit US and Europe, India emerged as the fifth largest economy. The country didn’t spend its way out of covid like our Western counterparts. New India is ‘the confident India’.

Speaking of new India, let’s acknowledge the person who said, “Main udna chahta hoon, daudna chahta hoon, girna bhi chahta hoon, bas rukhna nahi chahta?” (I want to fly, I want to run, I even want to fall…I just don’t want to stop). Retail investors who aspire to create wealth may struggle or fall but they don’t stop SIPs (systematic investment plans). SIP flows have crossed 13,000 crore a month. The collective power of domestic money is stronger than foreign capital.

Happy investing in 2023.

Radhika Gupta is the MD & CEO at Edelweiss AMC, and the views expressed here are her own.

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