Case Study : The BBC Principle

Navigating the decision to invest in a stock that has remained range-bound for over a decade poses a significant challenge, particularly for those engaged in discretionary styles of investing.

We take the example of COAL INDIA which finally broke out of its long-standing range towards the end of 2023 and try to draw some learnings from two scenarios.

• Existing investors, having weathered the stock's historical cycles, may view the breakout as an opportunity to sell, anticipating a return to familiar correction levels around Rs 200.

• Conversely, newer investors might hesitate to enter the market at Rs 200, fearing a repetition of the 2015 correction pattern.

Momentum investing offers a refreshing departure from such biases, empowering a predefined system to dictate stock entry and exit points.

The Mi India Top 10, for instance, picked up this stock around Rs 295 in October 2023 and has been a beneficiary of its impressive performance ever since.

Of course, we cannot exactly say how long this trend may last. But we are quite sure about the fact that the strategy will be quick to get rid of any stock that starts to observe a fade in its momentum.

Case Study : The BBC Principle

Looking back a few years, the idea of investing in a stock like NTPC might have seemed unappealing. With its stagnant performance and modest dividends, it didn’t attract much attention. However, this reluctance to invest often stems from recency bias, where recent trends heavily influence our decisions. But if we delve deeper into the stock’s history, we uncover a more nuanced narrative.

The trajectory of NTPC’s stock reveals interesting patterns. . . . .

Reading Time : 3 Minutes

Is inflation coming back strongly ?

In this intriguing analysis, we’re presented with a comparative chart showcasing the dynamics between gold prices in dollar terms and the US ten-year real rate. Traditionally, these two metrics have exhibited a strong inverse correlation: as real rates rise, gold prices tend to fall, and vice versa.

However, recent data reveals . . . . .

Reading Time : 3 Minutes

WeekendInvesting Daily Bytes

The markets have continued their downtrend for the third consecutive day. Unlike the previous sessions, today’s market did not drop further after opening, which is a relatively better scenario. We are nearing channel support, and while a drop of about 600 to 700 points has been a common occurrence over the last three to four months, the persistent concern is the potential breach of this channel, signaling a new downturn.

The main concern driving the market appears to be the rising . . . .

Reading Time : 4 Minutes