Market melts down on coronavirus woes: What top investors have to say about the crash

Here's what some of the big experts said about the market.

I have nothing much to say to the traders, but we usually are investors. As far as investors are concerned, we have seen a significant correction. We don't know, right now there is uncertainty and no single investor is the same. So I think the ability to deal with uncertainty - that ability is very different for different people and people who can deal with high levels of uncertainty can start slowly and steadily investing. There is to my opinion no need to rush in. There is a significant damage that has been done the outlook for growth is hazy at least in the near term and therefore you will get enough time to accumulate.

It is also not wrong in these kinds of situation to conserve cash till there is more clarity. So again as I said, there is no one solution fits all to everybody, I think people should take a call, be calm. It is not the end of the world, we have seen several crises like this in the past and this too shall pass.

At the start of a crisis and in the middle of the crisis it always feels unprecedented and it always feels that this is the end of the world financially speaking. We have seen that in the previous crisis in the middle of taper tantrums in 2013 and prior to that in 2008, so this is not new, but what happens is the crisis pass, and as an investor, one has to stay put, reduce the risk if you have a lot of leverage on books and keep some cash. However, if you have cash then this is the time to be nibbling in; this is when stock prices are completely beaten down, reality and perception are divorced from each other and this is a great buying opportunity from a long-term perspective. The reason I say nibble and not go all in is because you don't know if it's going to end up another 10 or 5 or 3 percent down and whether it will take another 2 months or 2 weeks to recover. So, nibble a bit and then gradually keep investing.

The markets have been doing pretty much what I had anticipated. If you recall what I said in May 2019, I had asked investors to go to 100 percent cash and I had said the cycle from 2009 is actually ending and that is the reason for my cautious approach in the market.

As far as where the markets goes - two weeks ago I had said - don't ask what do you buy now, that is a wrong question to ask. I had projected level of something like 9,700 to 10,100 for the market. The market have actually exceeded that, this has been the case for the markets. I have seen markets from 1992 from the Harshad Mehta crash, each of those meltdowns actually last longer than what investors anticipate. They surprise people on the lower side and people who wait with cash are the ones who benefit from these falls in an incredible fashion.

For traders, 9,700 having breached, the next levels comes to about 9,415. So 9,400-9,300 is the next mark for the market.

I have been saying for some time that I think in this environment, it does feel to me like it (India) is a somewhat defensive play within the emerging markets which of course are getting hammered. The reason for (the downturn) is frankly because although it is an expensive market.

So far there has been a limited impact from the virus in India. Of course that could change. It is not a particularly open economy, it is not a particularly open stock market with lot of materials and energy names in it and of course you are getting the benefit at the margin from the lower oil prices, which looks like it is going to stay for a longer period of time. The currency has not helped because it has come under pressure, but overall, I still think it is right to assume that you probably don't necessarily buy in India here but I think you will prove to be somewhat more defensive within the emerging markets themselves.

Right now the fear is very high due to Coronavirus issue and oil issue which is gripping the world economy. So it is very difficult to kind of fathom the impact in the shorter term. However I do believe that best time to deploy capital is when the fear is at high. Markets are right now selling off irrespective of the price and that is where I think we have seen in the last 8-10 days the carnage in the market, so I do believe that once you start deploying money in a slower manner, we are pretty close to the bottom if not the bottom.

I think the large part of the damage is done. People were waiting for the correction and when the correction has come obviously the fear factor is very high. So I do believe that one should start looking at deploying at least 20-25 percent from here. In my opinion, this will settle down over the next 2-3 months. The recovery may not be very sharp, recovery may not be very quick but at the same time you will find bottom soon and the recovery will take place when good news from China and other parts of the world around the Coronavirus receding comes. So in this period you should systematically look to invest.

Making money in equity markets is not about staring at macros and flows and so on, it is about focusing on company fundamentals and economy fundamentals, and consistently buying high quality names. Last evening we did a call with our clients even as the US market was falling, encouraging them to put more money to work. We have been buying steadily through this fall.

The three tangible reasons I can offer as to why one should not lose too much sleep about this if one is a long term investor.

Firstly, all the data from China suggests that they have got the situation broadly under control. Even if you assume the Chinese government is doctoring the data, the Chinese stock markets stability itself suggests a measure of control of the situation and therefore India's imports from China seem likely to recover through March and that should be a big relief for the auto ancillary sector, for the pharmaceutical sector.

Secondly, cheap oil and cheap money are 2 things the Indian economy loves. If you look back at India's history, cheap oil and cheap money have been typically good triggers for a fundamental recovery in Indian equity. I think it will be very difficult for the RBI not to push through a 50 basis points rate cut over the next month or so.

Thirdly, even in the western context, whilst they will go through an economic lockdown over the next 30-60 days, as summer arises, the problems abate and our dependence on the western economy beyond IT services, the relevance of auto sector, and our dependence on the western economy is relatively limited.

So, looking at it fundamentally as well. I believe this is the time to buy. It is rare that you get an economic recovery and a stock market correction at the same time. So, if you believe that over the next couple of years, the Indian economy will recover slowly, this is as good a time to enter markets as you get. Just be careful about not buying highly indebted balance sheets; buy high-quality stocks and I think you will do well over the next two to three years.

We as most others have been blindsided by the extent of the crisis and we don’t know it is over. To be fair, on the ground, in terms of working of companies, things are not as bad as what the stock market is telling you. Yes, the news from Europe and America is not the happiest of issues about controls and so on and so forth, but at least on the ground in terms of working – and we work with China with a lot of companies, those are fine, they are working now, fully operational, Europe is operational at this point of time, American companies are operational.

So, I think the stock market belies a lot more panic than what is on the ground. But perhaps it is correct because at the end of the day now we have reached a situation which we have never seen ever; that is one.

Number two, of course, margin calls are rampant because this kind of situation requires you to sell your stocks to make up the margin. So, the leverage plays are going.

The third is the fact that the global markets were sitting on huge leverage, everybody had borrowed at negative rates or zero percent, or 2 percent and bought in the market. So, to that extent, you will find that the bigger the stocks have been taking a beating because the fact that leverage is disappearing.

So I think it is a product of three things coming together – leverage disappearing, panic in the market to the extent, margin calls, everything is now coming together and scarcely a reason to buy.