What Do We Think of Tata Motors' Stock Price Decline? - Views on News from Equitymaster

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The Equitymaster Research Digest

What Do We Think of Tata Motors' Stock Price Decline?
Feb 17, 2017

  • Running the entire valuation gamut
  • Tata Motor's bad quarter
  • When good gains disappoint

Tata Motors' stock market journey from 2008 to 2015 is a great rebuttal to the efficient market hypothesis. Seldom have I seen a stock run the entire gamut of valuations in such a short span of time.

From distressed valuations to a value pick...from value to growth at reasonable valuations...from growth at reasonable valuations to growth...and finally from growth to momentum - the stock saw it all.

The ride was far too volatile for anyone to remain invested in the stock from start to finish. But those who did would have been rewarded with a fantastic 24-bagger.

IBM founder Tom Watson Sr once said, 'I'm no genius. I'm smart in spots - but I stay around those spots.'

Well, we think we are smart enough in certain spots. And those spots are the first three phases of the valuation lifecycle.

We recommended Tata Motors at the distressed level.

No analyst was willing to touch the stock back then. But we were so confident it would bounce back, on 31 December 2008, we made it the subject of a report, One Stock That Will Repeat History and Turn Multibagger.

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