Comment on Lessons from trading on Yes Bank

Anu commented on 23 Aug 2019, 05:56 PM

I have no clue why Nitin has decided to pick on Yes Bank as a wealth destroyer. I have made substantial profits by buying and holding it many times and I still hold over 1600 shares in my Zerodah account. Agreed it is a volatile stock but if you analyze it, it overshoots on the downside and the upside. I will continue to keep the faith because:
1) The whole market is in a panic bear grip and even good news (like successful QIP) are being ignored.
2) Yes bank is being punished for EXACTLY the same reasons why it was being cheered – its rapid growth. Banking is a business of risk. Those investing in bank stocks need to realise that some investments may go bad – in case of Yes Bank many hitherto sound companies went under. Who in their wildest dreams would have thought couple of years ago the Jet, Zee, Eveready, Cox and Kings or DHFL or a CG would go bust? Is it the banks fault for lending to such companies? They were highly rated and respected companies. So there does not seem to be anything foul except that perhaps the systems wete not robust. Even RBI audits till last year gave them an ok.
3) Yes Bank has been a favourite of the FII community. Given the flight out of India by FII’s, it is but natural that Yes Bank would fall disproportionately compared to others. Don’t be surprised if the stock goes to 150 in three months if FII buying resumes. It is currently at almost half its book value. Is that fair value for India’s fifth largest private bank? Obviously not. Even if two or three accounts get resolved and some solid PE investor puts in growth capital, Yes Bank will be back with a bang.
In conclusion, all I can say is that at a time the whole market is in doldrums, it is not only unfair to pick up one stock, write a damaging blog post and circulate it among trading community. To say the least, it is unbecoming of Kamath and Zerodah to indulge in such activities.

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