Retail Shareholders Are Lapping Up Falling Knives - Chart Of The Day 8 May 2018 - Equitymaster

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Retail Shareholders Are Lapping Up Falling Knives
May 8, 2018

Today's chart illustrates how retail investors are increasing their stake in stocks that have plunged over the past few months.

These stocks have fallen due to corporate governance issues, lack of management integrity, or debt worries.

Take Gitanjali Gems for example...

The stock has dropped by whopping 95% since the start of 2018. Despite this, more than 12,000 retail investors have bought the stock. This amounts to a 3.3% increase in their shareholding.

Clearly, the aam investor would have been better off staying away from such a falling knife. In this case, the quality of the management as well as corporate governance were in question.

Tanushree Banerjee, editor of StockSelect wrote to you about the importance of evaluating management quality in investing. She explained in detail about evaluating management quality by asking some very important questions.

Subscribers to Smart Money Secrets are lucky in that sense.


Because we believe, India's top 40+ super investors, ask these questions before they put their money into a stock.

And we track them closely.

Then, using our smart money indicators, we narrow down their choices to just one stock per month.

Last month, we recommended a 100-year-old bank.

This month's pick will be published this space.

Data Source: Economic Times, Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - Don't Catch Falling Knives Like Vakrangee or PC Jeweller...

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