Don't give free lunches to large investors
By Vivek Banka

There was a lot of chat around Zomato which continued to fall as due to selling pressure from pre IPO investors whose lock in period got over. Over the last few days we continued to hear about investors wanting to buy Zomato just because its fallen substantially from its peak.

However investors forget that at any price a stock can fall 100% from their cost price.

In context of our earlier posts and infographic, a clear and visible pattern emerges

Small shareholders bail out large investors as the price of a security drops by purchasing them while large investors sell. Small investors buy on the premise of the fall being substantial from the highs.

We have analyzed the largest wealth creators and destroyers over the last 5 years and visibly seen as the stock price falls retail shareholding increases ( Average of 13%), while for wealth creators the no goes up on an average only by 1%.

Do Not buy or sell purely because something has gone down or up.

We at GoalTeller also continue to see skewness of clients' direct equity portfolios away from their asset allocations and which can prove very costly in the long run

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