New age companies which recently listed like zomato, paytm, nykaa ,cartrade policy bazaar are getting brutally beaten down.
any idea when this can stop? and how can the stocks fall this much in such short span? were IPOs that costly?
can we buy any of these stocks for long term as stocks fell a lot? pls suggest i like new age businesses which i believe are the future businesses.
which levels and stocks can be bought (dont need tips but business wise sugestion)
Welcome to stock market. You just hit reality hard. IPOs usually are a thing of the bull market whose valuations are often inflated. Secondary markets in a bear world often gives good quality stocks at attract valuations than primary markets in a bull world.
As a retail guy there is no compulsion to buy stocks every now and then. After all we don’t have to run a mutual fund / hedge fund and show returns to anyone. So the above approach is what I would prefer.
Any idea how these stocks doubled or tripled their valuation in last year or so before IPO?
There was easy global liquidity sloshing around and valuations were doubling every few months, without any material change in business.
When the tide is rising everything floats with it. Only when tide ebbs, you get the true picture.
I still believe that some of these stocks can see more correction. It is ok to flaunt your losses and use random matrix to show your success in private market. But in public market, Revenue and Profit are the only matrix that matters.
And those companies that have no visibility of profit or intend to make losses for foreseeable future will continue to get hammered down. Especially now, as it is looking more and more likely that global liquidity tap is turning off.
Newage tech companies aren’t going to get profitable overnight. It would be better to monitor them closely and look for business parameters to improve over a few quarters before investing heavily in them. You can do micro-accumulation though. But these stocks are like falling knives. No one knows the bottom. Better to stay safe than sorry.
You must do your own work. Then you will have confidence in an edge, if you can find one. Take ideas and theories sure, but putting it all into a plan and then testing/improving the plan has to be done by you.
Depending on other’s opinions and working without an edge will you leave you much more open to luck and prone to succumbing to bias issues.
You can for example, start by asking a simple question - is it better to buy a falling/crashing stock vs a rising stock. You can test that in context your other rules. And whether and when to get out if its not working out. There will probably be many variations of rules that can work but also many ideas that don’t work.
Being able to ask the market rather than asking others for what works can make a large difference in getting an answer that you can have some confidence on. Just don’t expect absolute black and white in most cases and need some common sense against over optimizing to certain events.
The more I read about this, the more I feel that is it really a unicorn bubble which may burst sooner or later? Given the valuations presented by them. I may be wrong here, but the companies to be viewed as some of the “growth” stocks need to justify the valuations with meaningful profits instead of enjoying and upbeating a bull market
Although these stocks are getting beaten up in secondary markets, India has 81 unicorns now, up from 42 last year. The investment in startup space is only getting more aggressive. GOI is expecting to reach 100 unicorns very soon.
[India is home to 81 unicorns now as Mamaearth, Globalbees make it to the list (businessinsider.in)]
Helped PB to at least get nearer to its initiation point fairly.