Yes Bank - From Boom to Doom

Amit Pandya
Jun 21, 2019
4 min read

First of all the simple answer is a clear NO! Reasons are stated below:

Around 17th September I was asked that if anyone should enter Yes Bank for long-term and I said a clear No and told to avoid finance sector and realty sector for time being because facts and figures don’t lie. and Technicals work best for short-term to mid-term analysis. And from the shareholding pattern, it was clear that something is bad when last year RBI found some problems of NPA in the balance sheet in Yes Bank and people have the tendency to forget easily. Stock Market is not a gully cricket it needs real hard knowledge and experience, in US markets there are many examples of ‘Too Big To Fail’ but they have collapsed and bankrupted.

People think that if it is a bank Government will bail it out, but at the end of the day, it is public money. Mutual funds are holding majority stack in the bank but Mutual Funds haven’t brought money from there pocket, it is public money, no one can save if 2008 type of collapse occurs. Because history says that such incidents occur every decade, someone is made the villain and all goes well after that. It is up to our sense and judgement that stock market doesn’t reward you for sitting idle beside your TV set watching cricket matches! Such fools are beaten down hard by Mr Market. Everyone doesn’t become Warren Buffet just like that.

I had given targets of open support around 230 at that time stock was trading around above Rs. 300 levels and the bum accident occurred in next week, the stock collapsed heavily. If something is bad that doesn’t change to good soon!

Edit: 19–11–2018

Stock is seeing third round of heavy selling continuously. Support is only near 149.95 on monthly basis. One should only trade using there own risk appetite, for investment purpose one should wait for clear view.

(After retirement of the third director, everyone should just wait and watch.)

Edit: 26–11–2018

The non-convertible debenture holding by two big mutual funds — Reliance Mutual Fund and Franklin Templeton — is in focus since some investors fear that ratings assigned to these instruments could be shaky after the steep fall in stock price in the past few months.

Edit: 28–11–2018 Another bad day for Yes Bank

Technically Yes Bank have taken support at 146.75, Another support is around 107. Let’s hope some good signs will be seen and internal problems will be resolved.

Edit: 03–12–18

Technically stock may see some rise upto 190–194 levels with stop loss around 155, but still it is not suitable for investment purpose, we will wait for some proper signals to get into buy position.

Edit: 24–01–19

On the news of Yes Bank finally getting a CEO who is an outsider, yesterday stock rallied up to 234 levels and we had a resistance target of 245 which is achieved today and exactly stock made high of 245. Now one can hold positions with sl of 215, don’t expect any magic overnight, because such rally was only because of result of short covering. Stock needs to close above 245 and take support and start trading above it, then we can see targets around 339. Though fundamentally people never questioned still then we have seen a sharp correction, in market money isn’t being made by being right all the time, we have to take positions according to market. You can read article about Ravneet Gill new CEO of Yes Bank.

Edit: 04–02–2019

Still not a suitable recommendation for Investment! Stock exactly hit our said target of 245 and now again in reverse gear.

Meet The New Yes Bank CEO: A Corporate Banker With An Eye On Retail

What we know about Yes Bank's new all-rounder CEO Ravneet Gill

We have already booked profits on our positions.

YES Bank slumps 5% as investors worry over MF holdings

In markets, in order to earn you have to respect the trend if it is negative, then no matter who is the expert you have to follow the trend otherwise your investments will either become zero or a prolonged fixed deposit. If any stock is positive or negative there are reasons, and big companies don’t get formed in a few months or years. The success of Apple which we see today is the result of many years it was founded in 1976. Similarly, success cannot be copied or repeated. Yes Bank is good but something would have changed then only stock collapsed. When in 2017 RBI red flagged Yes Bank it was in our radar that we will not be in a long position in this stock no matter what happens, charts don’t lie. You have to respect stop loss even if you are Warren Buffet.

Since the last six months, I am advising to stay away from Yes Bank because for any stock whose fundamentals are challenged only a good price to buy is Rs.0. Because even FIIs got fooled that something will get changed, I started avoiding Yes Bank since 2017 because as RBI raised some red flag, we should be wise enough to understand that something is fishy and the market is not running away and by investing in Yes Bank you won’t become Warren Buffet. So invest wisely. One should understand in investing world that the company who has achieved great results that the same thing cannot be repeated every time, so should look over at other opportunities in the market. We have a target of Rs.81 in Yes Bank then we will see what to do next?