Weekend Investing Daily Byte - 17 April 2025

The markets are doing what nobody was expecting—and that’s exactly what markets are supposed to do. They climb a wall of worry and tumble when least expected. Expecting the market to follow your thoughts is, in my view, a bit too ambitious. And that’s precisely what we’re seeing right now.

Today, we’re going to look at some of Warren Buffett’s trades—some truly shocking stats—and explore the narrative around his style. This will help us derive valuable insights for trend followers.

Table of Contents

Where is the market headed?
Sectors of the Day
Story of the Day : What’s Warren Buffett Really Doing?
WeekendInvesting launches - The Momentum Podcast

Where is the market headed?

Market Overview

The Nifty has surged 1.77%, bringing us back to levels seen at the start of 2025. Three months and two weeks in, nothing significant has been damaged. It’s now looking meaningfully strong and poised to potentially go even further. Whether it will or not—we’ll see. Just seven sessions ago, we were at 21,700, and now we’re at 23,850. Those who sold in panic are now wondering if they should jump back in.

This paralysis of plan is common among discretionary investors—no one will talk about it, but it’s real. Discretionary investing is extremely tough. At every decision point, you wonder if you’re making the right call. Should I have sold? Will the market fall again to 19,000? It becomes an endless loop of doubt. So the best approach is to lay out your plan and follow it. The market doesn’t care about your position. It’ll correct itself, with or without your concern.

We are at a critical point now. A breakout from here could set us up for a few thousand more points. Some consolidation would be good after this steep climb, because it’s becoming harder for participants to catch up. Even the most bullish voices are surprised by this move.

Nifty Next 50

The Nifty Jr. isn’t as bullish, with a 0.72% gain, but it’s been a strong seven sessions. It has returned to levels last seen at the beginning of February. Not exactly at the start of 2025 levels, but it’s a good run.

Nifty Mid and Small Cap

Mid caps rose 0.5%, and small caps were up 0.4%—not bad, but clearly slowing down compared to large caps.

Small caps are currently at 15,400, while they started 2025 at 17,600—still a 2,000 point gap to recover. In contrast, large caps have fully recovered the early 2025 fall.

Bank Nifty

The surprise index continues to be Bank Nifty. I’ve been pointing out its relative strength for several sessions. It clocked a new high, rising 2.2%, going from 49,000 to 54,000 in just seven sessions. That’s what happens when nobody is looking—markets shift unexpectedly.

GOLD

Gold fell 0.93% today, but that comes after almost touching ₹98,000. It’s going parabolic. We’ve been long and bullish on gold since 2016. Every dip—5%, 10%—has been an opportunity. Fiat currencies are weakening, and countries are racing to accumulate gold reserves. Our content pieces on gold highlight this ongoing trend.

Advance Decline Ratio

Market breadth was solid: 313 advances to 187 declines, a slightly smaller spread than yesterday but still strongly positive.

Heat Maps

The heat maps are mostly green. Reliance surged 2.8%, followed by big names like State Bank of India, Kotak Bank, ICICI Bank, Bajaj Finserv, Bharti Airtel, and Sun Pharma. These giants drove the Nifty today. Most others were flat, but Wipro stood out, falling 4% on its results. IT stocks continue to be a weak link.

In the Next Nifty space, gainers included CG Power, DMart, JSPL, ABB, Havells, Bajaj Holdings, DLF, TVS Motors, and Divi’s Lab, while names like LTIM, Naukri, and Cholamandalam saw profit booking.

Sectoral Overview

Financial services surged 2.3%, now up 24% YoY, making new chart highs.
Capital market stocks are up 35% in a year, and rose 1% today.
Banks rose 2.2%, as did private banks.
Infrastructure stocks up 1.8%, services sector up 2%, oil and gas up 1.2%, and PSU banks up 1.6%.
Every sector was green today.

Sectors of the Day

Nifty Financial Services Index

The Nifty Finserve index broke out impressively, with ICICI Bank, Bajaj Finserv, SBI, Kotak, SBI Life, and Axis Bank all doing well—leading the market from the front.

Story of the Day : What’s Warren Buffett Really Doing?

Now let’s look at the shocking stats from Warren Buffett’s trades. A huge following has built up around his value investing legacy, and rightfully so. His discipline and ability to forecast are admirable. But there are myths associated with his name—like “buy and hold forever.”

Looking at actual Berkshire Hathaway data, it tells a different story. Of 230 stocks over a specific period:

39 stocks were held for just one quarter
29 stocks for two quarters
Around 60% were held for less than one year
Nearly 75% were held for two to two and a half years

This means three-fourths of Buffett’s portfolio gets turned over relatively quickly. He’s quick to eliminate underperformers, just like a momentum investor. That’s a massive reason behind his success. He lets the winners run and cuts the losers early.

Despite the myth, Buffett doesn’t hold every stock forever. The few big winners in his portfolio account for a disproportionate amount of returns. That’s momentum thinking in action—cut losers fast, and ride the winners long.

The Buy & Hold Myth Debunked

The real takeaway? While buy-and-hold can work, it should be applied to strategies, not individual stocks. Many investors hold on to losing positions due to emotional attachment or fear of realizing a loss. That’s the deer-in-the-headlight syndrome. If your thesis fails within a few quarters, exit. Don’t wait endlessly for stocks to recover in price or earnings.

Buffett’s edge came not just from good picks, but from churning out losers efficiently. He didn’t get to 109 billion by holding on to duds. His hockey-stick growth curve—from his first billion at age 55 to now—shows what time and discipline can do.

Even if you’re starting with ₹5,000 instead of $5,000, your trajectory can be similar. The key is a long runway and a clear strategy. Buffett had a head start, reaching a million dollars by age 30. But it’s never too late if you stay consistent and avoid doing stupid things.

Evolution of the Market

The Nifty index recently replaced NSE Rejig: Geo Finance and Zomato entered, while BPSCL and Britannia exited. The market is always evolving—new companies, new ideas, new valuations. It’s survival of the fittest. You must exit underperformers and enter evolving winners.

Look at Yes Bank, which stayed in the index until it dropped from ₹400 to ₹20. You can’t afford such delays. Be proactive—exit early. It’s not about being perfect; it’s about being responsive.

Momentum Strategy Insights

In a typical multi-cap momentum strategy, most losers get churned within 9 months. The few long-term winners drive the bulk of the returns. The violin plot of such a strategy shows most trades in the ±20-30% range, with outliers giving 300-500% returns. That’s your edge.

Even in mid-cap momentum, the story is similar. Early churn, tight control on downside, and a few massive winners that compound capital like crazy.

The Bottom Line

Momentum investing involves higher churn but offers the advantage of keeping you out of harm’s way. It mirrors Buffett’s real approach more than the myths surrounding him. It’s about removing weak stocks and reallocating to strength, thereby optimizing capital.

The ultimate truth? Buy and hold works for strategies, not for individual stocks. Stocks aren’t family. You don’t need to hold them forever.

Dump the duds. Date the stars.

What are your thoughts on these trade statistics? Has this opened your mind to new investing formats? You don’t need to be a momentum investor to benefit—you just need to learn to cut losers early. That’s the key to wealth creation.