‘Don’t get carried away’ by market debacle, says Zerodha Co-founder Nikhil Kamath

Investors are advised not to get too hassled and carried away by Wednesday’s stock market debacle as bears have a tendency to be significantly more dramatic than the bulls, Zerodha Co-founder Nikhi Kamath said in a tweet. In his opinion, one should not lose too much in bad times and focus on making the most during good times.

“#Bear markets are significantly more dramatic than bull, if this #bull run has lasted longer than usual and vix(volatility) is at a ridiculously low level, don’t get carried away…,” Kamath said. “Everything is cyclical, if there’s one thing that doing this every day for 19 years has taught me, it’s more about not losing too much in the bad times and not making the most during the good times,” he added.

The Bengaluru-based serial entrepreneur’s views came in the light of the market crash where S&P BSE Sensex crashed by 1000 points while the broader Nifty50 missed by a whisker of what could have been a 300-point fall in the intraday trade. The 50-stock index fell 296 points below Tuesday’s closing.

In an analysis shared on his official erstwhile Twitter and now X handle, he explained how bull markets, on an average, have typically lasted around 1 year and 10 months with the most recent 4 bull runs exceeding this average and lasting “over three years”.

In contrast, the bear markets are comparatively shorter, often concluding within half a year, the analysis showed. The shortest bull market lasted just 50 days, in contrast to the longest, which impressively spanned 1,419 days, the tweet said.

“The average gains during a bull market stand at 101%, whereas bear markets tend to see a decline of 33% on average,” it said further.

“Generally, bull markets with longer durations are associated with bigger gains. Interestingly, bear markets don’t follow a similar trend. The correlation between their duration and the severity of market decline is almost non-existent,” the Tweet concluded.Today’s fall comes on the back of Fitch slashing the credit rating of the US from AAA to AA+ — a predicament global stock markets went through in 2011, when S&P downgraded US credit rating by one notch to AA+.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)