Chart taken from Chartnexus at end July 2018.
No it is not the Curious Case of Benjamin Button. Any semblance whatsoever is purely incidental. But this counter sure piqued my curiosity on some issues and I believe we can extract learning points from this case. Let us dissect it chronologically.
My heart goes out to the honest investor/trader who lost money big time on this, totally played out psychologically if the exact actions taken were to long the counter before the ABSD announcement on basis of momentum buy cum value buy, carry overnight and suffer the gap down, swing cut NETT SHORT the position thereafter, tolerate the rebound and get nailed into the coffin by the gap up privatisation general offer.
Momentum buying basis without knowing material information is valid and does not constitute insider trading. Value investing is valid but tolerance required to wait patiently even when price falls plus news to drive price lower. Psychology can impact investment outcomes.
Markets are efficient, not always correct. And the market can stay irrational longer than you can stay solvent. You can form an investment view most rationally and with facts/logic to back its validity, but it may not be in sync with the market. Going against the crowd in the face of fresh announcements that support the crowded view, can have a huge payoff. (Especially if you bought on 6th July 2018 and hold till this time of writing. Hindsight speaking, it takes real guts even for a regular contrarian trader.) So its not what you think that is important, what the market thinks is more important. Stay humble.
* Writer has no positions in this counter whatsoever.