We all feel safe in stocks which are backed by strong Institutions and
get good sleep while owning them believing nothing too bad will happen there. We
assume that these institutions that pay huge salaries to hire best in class
research analysts have done thorough analysis before putting money into the
stock and we can safely follow them. Well in investing world nothing is safe
and especially in Stocks where all the analysis is on paper while the actual show is run by the management / promoter. While following Institutions is
relatively better than doing personal analysis (if you are not a very seasoned
analyst), following them blindly and committing all or major portion of your
capital to one single stock could bring you disaster.
Amtek Auto is one such example which is backed by some
renowned institutions such as LIC & Goldman Sachs. As on 30th
June 2015 LIC held more than 8.4 million shares while Goldman Sachs had 4.2
million shares of the company. Together Institutions held over 15% of the
company as on 30th June 2015.
