Should You Sell Out In The Market?

Market Update - Thursday, 5 Mar

While there has been no let up in the global conflict, markets were sighing a day of relief today. There was a relief rally in most parts of the market. Looking at a Nifty chart of the last couple of years, it is clear that while a lot of people are panicking right now at 24,500 odd levels, the recency bias that kicks into our brains does not let us think that just in April of 2025, not more than 10 months ago, the market was at 21,700 when the US tariff tantrum had started.

Now the market is at 24,500, which is way higher than where it was 10 months back. This perspective does not take away the current potential of damage from here, but because of recency bias, there is a feeling that the market should not be falling or should not fall more than a certain level.

• Reviewing the market charts, there was a 1.1% gain in Nifty.

• Nifty Junior saw a 1.3% increase, mid caps were up 1.5%, and small caps rose 1.4%.

• This was a decent bounce, while Nifty Bank was the least buoyant at 0.51% for the day.

• Gold remained flat at minus 0.17% and silver was also flattish at 0.22%.

Other Market Triggers

• Reliance was leading the market from the front, with L&T up 4%. NTPC, Hindalco, Mahindra, and Shriram Finance all performed well.

• Conversely, Adani Ports, ICICI Bank, and HCL Tech still lost ground today.

• In the Nifty Next 50 heat map, good gains were visible across the board with stocks like DLF, PFC, REC, Havells, and Mazagon Dock.

• In the mover of the day segment, LT Foods moved up 17% on some institutional interest. Mazagon Dock also moved up 9% following the announcement of a defense deal.

U.S. Market Updates

• In terms of chart formations in the US markets, there was a bounce during the previous session as well.

• AMD, Intel, Palantir, Amazon, and Comcast all went up between 3.5% and 5.5%. Indices went up 0.5% to 1.5% and the market was looking good. Several of these markets, including the US and Israel, are at or near all-time highs.

• Some markets are benefiting a lot out of this war while other markets that are more oil-dependent are getting beaten down. Micron, AMD, Intel, Palantir, Tesla, and Amazon were all doing really well.

• Even markets like South Korea, which were dramatically down in the last two days, staged a 10% recovery today, erasing most of yesterday's losses.

What to watch next ?

• A good thing about the last three days is that the market is trying to recover each day from wherever it starts, which is a positive silver lining.

• A two day high would be a target for a close; if the market closes tomorrow above the high point of today’s close, perhaps some of the sting has been taken off.

• However, the structure is badly damaged and will require consolidation before any move up can be considered.

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What To Read This Week ?

The PayPal Paradox: When Good Businesses Fail Great Portfolios

Today, we’re looking at a fascinating case study: PayPal. As a global leader in the payments industry for decades, PayPal is a household name and a Nasdaq heavyweight. However, its recent stock performance tells a story that contradicts everything beginner investors think they know about the market.

The Massive Disconnect: Price vs. Reality

A few years ago, PayPal was the darling of Wall Street, peaking at roughly $320 per share. Today, it’s trading near the $40-$60 range. Since its top in 2021-2022, the stock hasn’t just dipped; it has consolidated and drifted further downward.

At first glance, you might assume the company is dying. But here is the kicker: The business is actually growing. Net income is rising and the company remains profitable. So, why are shareholders losing money while the company makes it?

The Trap of "Rear-View Mirror" Investing

Most investors believe that if they study the balance sheet and wait for a glowing quarterly report, they have an edge. This is a dangerous misconception.

When you receive a quarterly report in April, you are looking at data from January, February, and March. In the financial world, that information is a snapshot in the rear-view mirror. It tells you where the company was, not where it is going. By the time you read those numbers, the market—which is a forward-looking machine—has already "discounted" that information and moved on to what might happen six months from now.

The Speed of Information

In today's digital age, the dissemination of information is instant. The "edge" you think you have by reading a public earnings release is non-existent because the big players and market algorithms have likely priced those results in weeks or even months in advance based on real-time data.

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