Zerodha Co-founder Nikhil Kamath advises against overreaction in the face of market downturn.

Investors are advised not to panic about Wednesday’s stock market crash, according to Zerodha Co-founder Nikhi Kamath. He states that bears tend to be more dramatic than bulls, so it’s important not to lose too much during bad times and focus on making the most during good times. Kamath warns against getting carried away in a bear market if the bull run has lasted longer than usual and volatility is low.

Kamath’s views are in response to the recent market crash, where the S&P BSE Sensex dropped by 1000 points and the Nifty50 narrowly missed a 300-point fall. He explains on Twitter that bull markets typically last around 1 year and 10 months, but the recent four bull runs have exceeded this average by lasting over three years.

In contrast, bear markets are shorter and often conclude within half a year. The analysis shows that the shortest bull market lasted 50 days, while the longest lasted an impressive 1,419 days. On average, bull markets see gains of 101%, while bear markets experience a decline of 33%.

Kamath concludes that longer bull markets are associated with bigger gains, but this trend does not apply to bear markets. He attributes the market decline to Fitch’s credit rating downgrade of the US from AAA to AA+. This is similar to the rating downgrade in 2011 when S&P lowered the US credit rating to AA+.

Note: The opinions expressed in this article are solely those of Nikhi Kamath and do not represent the views of Economic Times.