9 months ago

Devina Mehra Offers 6 Investment Mantras for Markets and IPOs

Devina Mehra Offers 6 Investment Mantras for Markets and IPOs
Devina Mehra’s 6 mantras for markets, IPOs, gold & beyond—‘Must-Know’ insights for investors · financialexpress.com

Imagine you have some money you want to grow, like planting seeds.

Devina Mehra, a smart investor, shared some advice.

She says that just because many people want to buy something when it first comes out, like a new toy (an IPO), doesn't mean it will be good later.

Some toys that everyone wanted turned out to be not so great.

She also warns that when there are lots of new toys (IPOs) coming out all the time, it's usually not the best time to buy them because they might be too expensive.

For the stock market in general, she doesn't think it will crash soon, but it's best to invest money you won't need for a long time.

She also thinks gold isn't as safe as people think and can be quite jumpy, like a bouncy ball.

It's good to have a little bit of gold, but not too much.

Finally, she suggests sharing your investments with other countries, not just keeping them all in one place, like putting your seeds in different gardens.

Key facts

IPO Demand
Not an indicator of post-listing performance.
IPO Frenzy
Generally not a good time for investors due to stretched valuations.
IPO Valuation Metric
Profit/cash flow remains the cardinal metric.
Market Outlook
No significant risk of a crash perceived.
Equity Investment Horizon
Funds should not be needed for 8-10 years.
Gold as Safe Haven
Believed to be more volatile than equities and not a safe haven in dollar terms.
Recommended Gold Allocation
Single-digit percentage, along with silver.
Global Investment
Recommended 30-40% of portfolio globally, not limited to the US.

Quotes

Devina Mehra

Founder, Chairperson and Managing Director of First Global

“The poster boy for that is Reliance Power. There was so much demand, and eventually that stock went to zero. But even if you don’t take extreme examples like that and look at some other counters like DLF – as a company it has been operating reasonably well, with no serious disruption in business – it also listed at a premium and remained at that level for a while, but after that it didn’t see that kind of pricing for decades.”
financialexpress.com
“the IPO booms usually do not end well. If you look at the listings in October/November 2021, most haven’t given returns anywhere near the index returns yet, and 4 years have passed. Sometimes there is time correction or price correction – but some things just don’t make sense. Also, just because some stock falls from the IPO price, it doesn’t become a good Buy either.”
financialexpress.com

Sources

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