This chart shows the top 15 companies (in NSE 500) sorted by returns of last 1 year, till Monday, 3rd June. One day before the massive fall on 4th June.
If you notice, 7 out of 15 stocks here are PSUs (marked in green dots). We all know how crazily PSUs have run up in last 2-3 years.
However, on 4th June, most of these stocks fell massively. If you see only 5% fall for some stocks, that's because they had a lower circuit of 5%. Else they could have seen much more fall.
All because of the shock that NDA might not continue and there may be a change in policies. Markets always react to unforeseen shocks and surprises vigorously.
But by 5th (Wednesday) afternoon, it became a little clearer that NDA might form the Government again and stocks rebound. Nifty 50 ended up ~3.5% higher.
This continued yesterday (Thursday) with Nifty 50 up by 0.9%
And who participated in this rally most? The stocks which got beaten down on 4th June.
High beta stocks for a reason.
PS: stocks mentioned are not recommendations, they are used just to represent facts.
Dean, School of Business and Professional Studies at Georgia Highlands College
8moIf more people would look at the data and be willing to play the long game, they wouldn't have to worry about their future. Convincing them to play the long game is the biggest barrier.