Bitter truth about Stock Market

I am sure, you have listened or read about making money from the stock market but very rarely you must have read or discussed how one’s wealth is destroyed by it. In fact, if you bet on any stock without knowing the anything about the company and its fundamentals then there are good chances of your wealth getting destroyed. Today, we will focus on some of the bitter truth about stock market.

Analyst on TV keeps talking about big ace investors like Rakesh Jhunjhunwala, Porinju V Veliyath etc. They will tell how much wealth these ace investors have created in a decade. But today I want to show you if one is not diligent and up to date with the market scenario he/she can lose all its money, instead of creating wealth for future.

Read: Why long-term investing creates wealth?

Let us see some prime example in Indian scenario where investors have lost close to 80 to 95% of their invested money.

1. Suzlon Energy Ltd

Suzlon energy

Over the last decade, from the peak of 395 to 15-20 level, Investors have lost 95% of their money in this share. The primary reasons for its fall are poor management practices including huge debt on books, low promoter holding, negative cash flow over a long time.

2. Unitech Limited 

unitech

From the highest level of 500, it presently trades at mere 7 Rs. Investors have lost close to around 98% of their wealth. The company was very popular in the real estate construction sector. The main reason for their downfall is huge debt on their books, lawsuit against management, extended project deadlines etc.

In future, there is no sign of any recovery of even half of the topmost level for this stock.

3. Jaiprakash Associates Ltd

Jaiprakash associate


This stock was daring of stock market and a decade ago, everyone wanted to own it because of its diversified businesses. A big conglomerate in Infrastructure, Cement and Power sector.

Investors have lost close to 93% of their total wealth.

4. Reliance Power Ltd

R power


This company had a very ambitious plan in power sector but failed to capitalize its power business. This company’s huge IPO went to a whopping subscription of 73 times and still, it comes under one of the top 10 IPO in Indian stock market history. During its grand IPO company raised close to 11,863 Cr of money from the public.

Now, Investors have lost around 87% of their total money in this share.

5.  Reliance Communication

rcom


In the last 9 year investors has lost 97% of their wealth in RCOM. This company also has the same story behind its losing market capitalization. It has huge debt on books and promoters have pledged some of their holdings.

There is no ray of hope for all these fallen stocks. They will never be going to recover their investor’s money. If you stay with these fallen rocks you will stay forever waiting for these rocks to move. Therefore, Investors should always be careful while investing and be in touch with current economic and political scenarios which can effects business to a large extent.

Read: New to investing, Learn Fundamental analysis

Thanks for reading.

Image credits Tradingview

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