When it comes secure investment in share market, #banking shares are alwsys been favoured. Many investors have good amount of banking shares in their portfolio. Banking shares are often favored for investment because the sector is a pillar of the broader economy, offering a blend of stability, growth potential tied to economic expansion, and consistent dividends. Reputable banks with strong fundamentals, good governance, and diversified revenue streams are generally considered sound long term investments option. When I began my shares market investment journey, I was no different and began to add banking shares in my portfolio. But is it always a safe bet ?
Many small investors always try to copy big market players. They use to track and follow the ace investors to get a good return. In 2019, me and thousands of retail investors like me lost huge money just because we blindly followed ace investors Rakesh Jhunjhunwalla.
For those who are unaware of this big name, he used to be the Warren Buffet of Indian stock Market. (he is not alive now)
The big bull of Indian market invested Rs. 86 CR in Yes Bank at Rs.67.1 per piece of share. He made the investment at a point when the bank's share price had fallen. This suggests he saw value in the stock at a depressed level. Everyone who was tracking tye big bull, thought if the #bull is buying the stock may become multi bagger. Even I bought some share Rs.445 per share. But by march 2020, the shares of Yes bank crashed to Rs.5 per share. Rakesh Jhunjhunwala Rs. 86 Cr investment fell to mere Rs.12 Cr. and many retail investors lost their hard earned money who invested in #yes bank after following the ace investors.
Even legends can go wrong
The lesson that we learn from such instanes is that blind faith always carries risk in the stock market. Even legends can go wrong. The difference is that the legends they their risks and small investors not. Rakesh Jhujuhnwala bet of Rs. 86Cr was a small capital for him. Even if it went to zero, it was no big deal for big bull of the market. Retails investors on the other hand, put in their #savings #FDs #loans and #retirement corpus etc and at the end they got trapped.
The outcome is that if you follow a big investor also follow their risk appetite and risk manegment.
In good faith - Peace!!
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