Over the past two years, one of the biggest lessons I’ve learned in the market is that people stress too much over quarterly results. I used to think that if a company delivered strong earnings say, 30% PAT growth YoY it would naturally reflect in the stock price. But reality is often different. If the broader industry is facing headwinds, even the best-performing companies can struggle, and the stock may not move as expected.
This made me realize the importance of a top-down approach. If a sector has strong tailwinds, even an average-performing company in that space can deliver solid returns. On the other hand, if the sector itself is in a rough patch, no amount of individual brilliance may be enough.
A classic example was post 2021 when the Nifty Realty Index shot up nearly 500%. Simply holding the index or picking any stock within that universe would have been rewarding. That made me rethink how I look at stock selection. Sometimes, riding the sector wave is more important than just focusing on individual company numbers.
This correct actually.I’m trying to learn which all sector will be booming in which all quater. But I’m not able to find any resources associated with it. Can you suggest me some resources to begin with ? I’m new to investing.
I’m a new investor trying to understand how to catch sectoral tailwinds early so based on my limited understanding this is what I know. One approach that has helped me is something @Worldlywiseinvestors Sir from SOIC mentioned in one of his videos.
Whenever a company announces its quarterly results, instead of just looking at it in isolation, compare it with other companies in the same sector. For example, if IHCL reports a strong quarter, I check how EIH, Lemon Tree, and other hospitality stocks are performing. If multiple companies in the sector are showing strong numbers, it could indicate that the hospitality sector is entering a tailwind phase.
Once we spot this trend, cross-check your belief by diving into brokerage reports on the sector and individual companies. This layered approach helps to filter out one-off performances and identify genuine sectoral momentum.
