ilmscore | Why do we make Dumb Investing Decisions? | Behavioural Finance | CA Rachana Ranade

Why do we make Dumb Investing Decisions? | Behavioural Finance | CA Rachana Ranade

Published: 2025-04-15
Status: Available | Analyzed

Predictions from this Video

Total: 7
Correct: 2
Incorrect: 2
Pending: 3
Unrated: 0
Prediction
Topic
Status
Yes Bank stock, which was once trading around ₹400, experienced a significant decline to around ₹20 due to problems in its loan book and corporate governance issues, illustrating the impact of negative company-specific events on stock price and the potential for large losses if losses are not booked.
"Let's say we are taking the example of Yes Bank. The stock was trading at almost ₹400 at one point and time. ... Because eventually a lot of problems started to crop up in that company. People started to talk about the problems in the loan book. There were a lot of issues around corporate governance, and then the stocks slid down from 400 to 300 to 200 and even below 100 levels. ... because today the same stock trades at around ₹20."
YESBANK
Correct
Paytm's stock, which debuted at an IPO price of approximately 1800, subsequently fell to around 600, highlighting a significant price drop and serving as an example for anchoring bias.
"And for that let me give you an example of Paytm Paytm when it had come up with its IPO it was somewhere around 1800 I guess then you know what happen the story right it came down and down and down let's say it came down to ₹600"
PAYTM
Correct
A specific jewelry company stock, which debuted in 2021, saw a significant increase in public discussion and interest in the months leading up to the video's recording, indicating a potential herd mentality effect.
"There Was This Jewellery Company Which Had Debuted If I Am Not Mistaken In 2021 And At That Time A Lot Of People Who Are Not Really Excited About This Stock. But what I remember is suddenly in I mean in just the last few months, a lot of people started to talk about this stock."
Jewellery Company Stock
Pending
The speaker uses Yes Bank's historical stock performance (from ₹400 down to below ₹100) as an example of a situation where investors should have booked losses to preserve capital and reinvest, rather than holding on due to loss aversion.
"The stock was trading at almost ₹400 at one point and time... and then the stocks slid down from 400 to 300 to 200 and even below 100 levels. So, how to overcome this loss aversion? The point is very simple. Accept that sometimes in investing you have to book losses. Just accept this, utilize that money to invest in a stock which you believe is a fundamentally strong stock and in fact make profits in the second investment opportunity."
YESBANK.NS
Pending
The speaker highlights Paytm's IPO price of around 1800 and its subsequent fall to 600 as an example of anchoring bias, where investors fixate on the historical high price and expect a return to it without considering current company fundamentals or market conditions.
"Paytm when it had come up with its IPO it was somewhere around 1800 I guess then you know what happen the story right it came down and down and down let's say it came down to ₹600 now many people just tell with confidence that because it was at 1800 during the initial days we are sure that it will go back to 1800"
PAYTM.NS
Incorrect
The speaker uses Yes Bank's historical price drop from ₹400 to below ₹100 as an example of why investors should book losses to reinvest in fundamentally strong stocks, implying that holding onto a falling stock due to loss aversion can lead to significant capital preservation opportunities.
"The stock was trading at almost ₹400 at one point and time... Because eventually a lot of problems started to crop up in that company. People started to talk about the problems in the loan book. There were a lot of issues around corporate governance, and then the stocks slid down from 400 to 300 to 200 and even below 100 levels. So, how to overcome this loss aversion? The point is very simple. Accept that sometimes in investing you have to book losses. Just accept this, utilize that money to invest in a stock which you believe is a fundamentally strong stock and in fact make profits in the second investment opportunity."
YESBANK.NS
Pending
The speaker highlights Paytm's IPO price of ₹1800 and its subsequent fall to ₹600 as an example of anchoring bias, where investors fixate on the IPO price and expect a recovery without considering fundamental changes in the company or its market conditions.
"Paytm when it had come up with its IPO it was somewhere around 1800 I guess then you know what happen the story right it came down and down and down let's say it came down to ₹600 now many people just tell with confidence that because it was at 1800 during the initial days we are sure that it will go back to 1800 oh why you should ask yourself that what changed in the company because of which it went down from 1800 to 600 was there a change in the business this model? Was there a change in the competition for the stock? Was it because of some regulatory changes? There are so many things because of which a stock can slide down. What people do in their behavioral aspect is that they will just cling on to that number 1800 and just keep on believing that some day or the other this stock will go back to 1800."
PAYTM.NS
Incorrect