There are certain things which every investor should know about markets.
Markets are run by few peoples but poor investors think they always work on fundamentals. Here are few cases which will help you understand my point.
This stock crashed up to 80% in just 4 months then again went high 45% in a day.
Amid of all these, when the prices started crashing heavily 20-40% in just a day, Management added that they don’t know who is selling the stake in the company. And there is nothing wrong with the fundamentals of the company. No one can believe that management has nothing to say about such a massive fall.
Poor investors get crushed both ways and operators who are running these markets wins.
Interglobe Aviation (Indigo)
On 27, Apr 18, Indigo share declined 5% just a day before the announcement of CEO resigning (link). Most people reading the article will think 5% is not a big deal but believe me that stock price doesn’t move much if there is no news in the market. Moreover when the whole market is trending upwards, how a company share declines by 5%. Definitely, there is some news out there to which market is reacting.
To add, public companies have to share any price sensitive news to exchanges. But in this case, only a few of operators were knowing the price sensitive news.
Its shares tumbled 82% from its 52 week high. Yet management is saying there is nothing wrong with the company and its fundamental remains strong. They further added that their company is debt free and none of the promotors has pledged their shares.
How can a company stock decline more than 40% without any reason? There is definitely something which company is hiding.
In such case one set of people who are crushed i.e., Retail Investors.
Therefore as a smart investor, you should not keep on waiting to take the decision. And investing in equity should not considered as a hobby. It is a serious affair and should be monitored at least weekly.
Those days are gone when one should never act till fundamental of a company doesn’t change. Now, Investors should understand markets(some stocks) are driven by operators and they can give change direction to stocks anytime.