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We learn from history that we do not learn from history—Georg Hegel

There are no bad business and investment opportunities, but there are bad entrepreneurs and investors— Robert T. Kiyosaki

Like shallow waters and halcyon sea make swimming look ridiculously simple to amateur swimmers, strong bull markets often give investors an illusionary picture of equity investing.

Unfortunately, an average Indian investor doesn’t learn about stock market investing until he loses his hard-earned money. The cycle of greed and fear and ignorance and repentance continues. This has been the history of equity markets in brief; and that’s been repeating itself for decades now.

Recently, we examined changes in the non-promoter-non-institutional shareholding of listed companies during the period of pandemic. Here’s what we found.

Ever since the markets began their ferocious upmove in March 2020, individual investors have been chasing penny stocks. Troubled and beaten down companies seem to be also on their radar.

Interestingly, Public shareholding in mega cap companies such as Reliance Industries, HDFC Bank, ICICI Bank, Bajaj Finance, Hindustan Unilever and Asian Paints, amongst others, dipped between March 2020 and June 2021.

Don’t flog dead horses  

Do you invest in low-priced stocks believing they are cheap? This assumption can prove costly. Similarly, investing in beaten down stocks that enjoyed immense following in the past may just be like flogging a dead horse.

Humans are inquisitive by nature and thus finding hidden gems gives investors immense pleasure, apart from stellar returns. You should refrain from investing in penny stocks and following hot tips. Finding multibagger stock requires skills and there aren’t free lunches.

Stocks often trade at low prices for valid reasons, and especially when there are low hopes of recovery. The reasons can range from poor corporate governance to weak balance sheets and from intense competition to lack of innovation.

For instance, a prominent telecom company that trades at Rs 5 may not be cheap vis-à-vis its peer that quotes Rs 600, when compared on business fundamentals. It’s quite possible that the latter is eating into the market share of the former and the former is facing an existential crisis. The same could be the case of a private sector bank which enjoyed the limelight in the past.

How can you improve your performance as an investor?

If you are a serious investor looking to learn the tricks of the trade, you would be better off imbibing our philosophy—Kyon Ki Bhaiya, Sabse Bada Rupaiya. It means you need to get over the investment biases and start truly valuing your money for it to fetch you good returns.

5 traits of successful stock market investors

  1. Know your investment objectives
  2. Know your risk appetite
  3. Find suitable investment options
  4. Take expert assistance wherever required
  5. Monitor the performance of your investments at regular intervals

Here’s how Ventura can help…

Are you wondering how you can find potentially profitable investment opportunities at the right price points?  You could start following our video series, ‘Stock Talk with BKG’. It’s a series on technical analysis in which our technical expert discusses momentum stock ideas on our YouTube channel.

Regular followers of Stock Talk with BKG get to know companies that are poised for a fresh upmove. Stocks selected for such video recommendations pass through stringent technical analysis criteria.

At the same time, our research team offers you vital information and insights on the fundamentals of listed companies. The scope of coverage includes quarterly earnings updates, notes on management discussions and company-specific research reports amongst others.

Besides this, you can avail Ventura’s seamless investment platform to invest in IPOs and mutual funds online.

In a nutshell

Chasing penny stocks and beaten down companies is risky. It’s time to take corrective steps before it becomes too late.

You may also like to read: Why is the US infrastructure deal so important? How will it affect Indian investors?


Disclaimer: The blog is for information purposes only and anything mentioned herein shouldn’t be construed as a fundamental reason to buy/hold/sell any stock. Furthermore, the information provided in the blog and observations made therefrom shouldn’t be treated as the extension of recommendations made on the other properties of Ventura Securities. We strongly suggest you to consult your financial advisor before taking any decision pertaining to your finances. Asset allocation becomes extremely relevant.

We, Ventura Securities Ltd, (SEBI Registration Number INH000001634) its Analysts & Associates with regard to blog article hereby solemnly declare & disclose that:

We do not have any financial interest of any nature in the company. We do not individually or collectively hold 1% or more of the securities of the company. We do not have any other material conflict of interest in the company. We do not act as a market maker in securities of the company. We do not have any directorships or other material relationships with the company. We do not have any personal interests in the securities of the company. We do not have any past significant relationships with the company such as Investment Banking or other advisory assignments or intermediary relationships. We are not responsible for the risk associated with the investment/disinvestment decision made on the basis of this blog article.


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