{"id":1900,"date":"2017-07-12T06:36:00","date_gmt":"2017-07-12T06:36:00","guid":{"rendered":""},"modified":"2025-11-07T11:00:05","modified_gmt":"2025-11-07T05:30:05","slug":"bull-or-bear-market-fundamentally-strong-companies-dont-bother","status":"publish","type":"post","link":"https:\/\/www.equentis.com\/blog\/bull-or-bear-market-fundamentally-strong-companies-dont-bother\/","title":{"rendered":"Bull or Bear Market \u2013 Fundamentally Strong Companies Don&#8217;t Bother- Research &#038; Ranking"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div>\n<p><strong>We have two questions for you:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>How many companies do you know which have grown multifold despite the bear markets or in not-so-great economic conditions?<\/em><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><em>How many companies do you know that have eroded investor\u2019s wealth despite witnessing multi-year bull markets?<\/em><\/li>\n<\/ul>\n\n\n\n<p>You might have your answers ready. But if we were to do some homework around these questions, then that leads us to another important question:<\/p>\n\n\n\n<p>Does a <a href=\"https:\/\/www.equentis.com\/blog\/understanding-bull-markets-in-the-indian-stock-market-for-maximum-profits\/\">Bull Market<\/a> or a <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/blog\/bear-market-guide-everything-you-need-to-know\/\"   title=\"Bear Market\" data-wpil-keyword-link=\"linked\"  data-wpil-monitor-id=\"98\">Bear Market<\/a> really matter for good businesses run by competent management? By a good business we mean those Fundamentally strong companies which have a loyal customer base, consistent demand for their goods, have low or zero debt and generate consistent profits.<\/p>\n\n\n\n<p>Well, we don\u2019t think so.<\/p>\n\n\n\n<p>Good businesses will do well irrespective of the market conditions they are operating in. Yes, even their share prices would witness a correction due to overall market correction but will easily recover the moment the tide changes. On the contrary, bad businesses will find ways to screw themselves up irrespective of the type of market and business conditions they are facing.<\/p>\n\n\n\n<p>Shares of good businesses will become wealth creators in the long run. On the other hand, shares of bad businesses will become wealth eroders eventually if not immediately.<\/p>\n\n\n\n<p>But why are even talking about wealth eroders now?<\/p>\n\n\n\n<p>After all, the markets these days are regularly making new highs. So shouldn\u2019t we be focusing only on wealth creators instead?<\/p>\n\n\n\n<p>Agreed. But as advisors and partners in our clients\u2019 wealth creation journey, we believe that we should be highlighting both sides of the story.<\/p>\n\n\n\n<p><strong>One can find wealth creators only when one is able to avoid wealth eroders<\/strong>. Isn\u2019t it?<\/p>\n\n\n\n<p>So our focus is no doubt on wealth creators. But we also ensure that we stop wealth destroyers from entering our portfolio. And hence the vigil to protect ourselves from such wealth eroders.<\/p>\n\n\n\n<p>To invest successfully, one needs to find fundamentally strong &nbsp;Companies businesses run by smart and efficient management and then invest in such businesses at reasonable valuations for<strong> long term<\/strong>.<\/p>\n\n\n\n<p>And as we shared our view earlier, a <a class=\"wpil_keyword_link\" href=\"https:\/\/www.equentis.com\/blog\/bull-market-all-you-need-to-know-about-it\/\"   title=\"bull market\" data-wpil-keyword-link=\"linked\"  data-wpil-monitor-id=\"99\">bull market<\/a> or a <a href=\"https:\/\/www.equentis.com\/blog\/bear-market-guide-everything-you-need-to-know\/\">bear market<\/a> doesn\u2019t really have a large impact on the performance of well-run businesses. In fact, there are companies that have grown multiple times even in bear markets.<\/p>\n\n\n\n<p>But first, let\u2019s have a look at some real-life examples of wealth destroyers:<\/p>\n\n\n\n\n\n<p>Then there were <a href=\"https:\/\/www.equentis.com\/blog\/suzlon-share-price-target-analysis\/\">Suzlon<\/a> (down 96%), <strong>DLF<\/strong> (down 85%), <strong>Indiabulls Real Estates<\/strong> (down 75% since 2008) and hundreds of more examples and thousands of sad investors for each such example.<\/p>\n\n\n\n<p>What\u2019s worth noting is that these companies have done poorly in spite of a good run in markets in years after 2008-2009. So what went wrong for these companies?<\/p>\n\n\n\n<p>There were several reasons &#8211; at times different for each.<\/p>\n\n\n\n<p>Some had too much debt, while others had unreasonable growth ambitions. Some didn\u2019t run their operations well while others had complex corporate structures siphoning money out of the company illegally. At times, it was not about the company and rather about being caught unprepared in the wrong part of the business cycle.<\/p>\n\n\n\n<p>To summarize, all these companies were facing some or the other kind of fundamentally strong companies problem with their businesses or its environment. They could not cope up with these issues and result is there for everyone to see.<\/p>\n\n\n\n<p>Strong companies, on the other hand ran like well-oiled machines.<\/p>\n\n\n\n<p>Backed by good decision-making by the management, these went on to deliver eye-popping returns for their shareholders. Here are some solid examples of wealth creators over the years:<\/p>\n\n\n\n\n\n<p>The figures in last column (Wealth creation in %) are eye-popping!<\/p>\n\n\n\n<p>And this is exactly what happens when investment is made in good businesses and ridden through both bear and bull markets.<\/p>\n\n\n\n<p>For more examples of such super wealth creators, have a look at our <a href=\"https:\/\/www.equentis.com\/blog\/crisis-investing\/\" target=\"\\&quot;_blank\\&quot;\" rel=\"\\&quot;noopener\\&quot; noopener\"><strong>detailed study<\/strong><\/a> on how fundamentally sound businesses delivered 20, 50 and even 100 times returns just after few years of the crisis.<\/p>\n\n\n\n<p>In almost all the cases of wealth creators, what mattered most was that the fundamental prospects of the company were good; the growth was consistent and visible; and most importantly, management\u2019s approach was rational, growth-centric without being unreasonable. And as you might have guessed by now, most of these factors were missing in wealth eroders\u2019 story.<\/p>\n\n\n\n<p>In fact it would be safe to say that for every 1 real <a href=\"https:\/\/www.equentis.com\/blog\/best-multibagger-stocks-for-2022\/\">multibagger stock<\/a>, there would be several wealth eroders in the market.<\/p>\n\n\n\n<p>This is the reason why being in the right stock as well as avoiding the really bad ones is so important.<\/p>\n\n\n\n<p>People who ignore fundamentally strong companies and invest based on tips and without proper research are the usual casualties of wealth eroding stocks.<\/p>\n\n\n\n<p>To avoid such outcomes, there is a need to properly study businesses before investing and also be on a lookout for signs that could raise red flags. <strong>Failing to exit<\/strong> a stock at the right time is also a problem for common investors. They hold out to the hope that things would get better one day. But in many cases, things keep getting worse until the time the damage has become irreversible.<\/p>\n\n\n\n<p>Finding correct stocks is necessary to create real wealth. It\u2019s not easy but that is what is needed. There cannot be any denying to that fact.<\/p>\n\n\n\n<p>To be fair, it is not always possible to identify wealth destroyers early on. But to have some success in doing so, what we need is sound financial understanding, proper research and experience in various market cycles.<\/p>\n\n\n\n<p>If you as an investor do not have such expertise, then it\u2019s worth considering <strong>taking help of those who have it and can help you<\/strong>. There is no glory in being wrong on your own in stock markets. You will miss out on the wealth creation opportunities that are available for smart investors.<\/p>\n\n\n\n<p>So better to take the right advice, be right and make money instead. Isn&#8217;t it?<\/p>\n\n\n\t\t<div data-elementor-type=\"section\" data-elementor-id=\"9185\" class=\"elementor elementor-9185\" data-elementor-post-type=\"elementor_library\">\n\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-e92a158 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"e92a158\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-65b41f6\" data-id=\"65b41f6\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-a613ee7 elementor-widget elementor-widget-shortcode\" data-id=\"a613ee7\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">\t\t<div data-elementor-type=\"section\" data-elementor-id=\"6844\" class=\"elementor elementor-6844\" data-elementor-post-type=\"elementor_library\">\n\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2efdbd0d elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2efdbd0d\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-783deaaa\" data-id=\"783deaaa\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c60a2cc elementor-widget elementor-widget-heading\" data-id=\"c60a2cc\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Related investing topics<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-3e3de9dd elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3e3de9dd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-25 elementor-inner-column elementor-element elementor-element-40fd5db7\" data-id=\"40fd5db7\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-757ca8cb ekit-equal-height-enable elementor-widget elementor-widget-elementskit-icon-box\" data-id=\"757ca8cb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"elementskit-icon-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"ekit-wid-con\" >        <!-- link opening -->\n                <a href=\"https:\/\/blog.researchandranking.com\/how-to-invest-in-share-market-guide\/\" class=\"ekit_global_links\" target=\"_blank\" rel=\"noopener\">\n                <!-- end link opening -->\n\n        <div class=\"elementskit-infobox text- text- icon-lef-right-aligin elementor-animation-  gradient-active  hover_from_left\">\n                        <div class=\"box-body\">\n                            <h3 class=\"elementskit-info-box-title\">\n                    How to Invest in Share Market?                <\/h3>\n                        \t\t  \t<p>Considering the volatility, investing in stock markets is both an art and science.<\/p>\n                                <\/div>\n        \n        \n                <\/div>\n                <\/a>\n        <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-25 elementor-inner-column elementor-element elementor-element-601073c\" data-id=\"601073c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-8b38507 ekit-equal-height-enable elementor-widget elementor-widget-elementskit-icon-box\" data-id=\"8b38507\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"elementskit-icon-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"ekit-wid-con\" >        <!-- link opening -->\n                <a href=\"https:\/\/blog.researchandranking.com\/looking-for-one-multi-bagger-today-here-are-54-that-multiplied-investors-wealth\/\" class=\"ekit_global_links\" target=\"_blank\" rel=\"noopener\">\n                <!-- end link opening -->\n\n        <div class=\"elementskit-infobox text- text- icon-lef-right-aligin elementor-animation-  gradient-active  hover_from_left\">\n                        <div class=\"box-body\">\n                            <h3 class=\"elementskit-info-box-title\">\n                    5 Best Places To Live After Retirement In India                <\/h3>\n                        \t\t  \t<p>While some retired people set sail on voyages worldwide, others look forward to spending their time in relaxation and comfort.<\/p>\n                                <\/div>\n        \n        \n                <\/div>\n                <\/a>\n        <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-25 elementor-inner-column elementor-element elementor-element-7e5723c\" data-id=\"7e5723c\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-551526b ekit-equal-height-enable elementor-widget elementor-widget-elementskit-icon-box\" data-id=\"551526b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"elementskit-icon-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"ekit-wid-con\" >        <!-- link opening -->\n                <a href=\"https:\/\/blog.researchandranking.com\/90-percent-lose-money-in-stocks\/\" class=\"ekit_global_links\" target=\"_blank\" rel=\"noopener\">\n                <!-- end link opening -->\n\n        <div class=\"elementskit-infobox text- text- icon-lef-right-aligin elementor-animation-  gradient-active  hover_from_left\">\n                        <div class=\"box-body\">\n                            <h3 class=\"elementskit-info-box-title\">\n                    90% People Lose Money in Stocks?                <\/h3>\n                        \t\t  \t<p>Isn't it shocking? But it is a fact. There are countless reasons why investors lose money in stock markets.<\/p>\n                                <\/div>\n        \n        \n                <\/div>\n                <\/a>\n        <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-25 elementor-inner-column elementor-element elementor-element-6dc0c61\" data-id=\"6dc0c61\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-eb5233e ekit-equal-height-enable elementor-widget elementor-widget-elementskit-icon-box\" data-id=\"eb5233e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"elementskit-icon-box.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<div class=\"ekit-wid-con\" >        <!-- link opening -->\n                <a href=\"https:\/\/blog.researchandranking.com\/is-long-term-investing-always-safe\/\" class=\"ekit_global_links\" target=\"_blank\" rel=\"noopener\">\n                <!-- end link opening -->\n\n        <div class=\"elementskit-infobox text- text- icon-lef-right-aligin elementor-animation-  gradient-active  hover_from_left\">\n                        <div class=\"box-body\">\n                            <h3 class=\"elementskit-info-box-title\">\n                    Is Long Term Investing Always Safe?                <\/h3>\n                        \t\t  \t<p>Let\u2019s understand what long-term means before we explain why Long Term Investing may not always be safe.<\/p>\n                                <\/div>\n        \n        \n                <\/div>\n                <\/a>\n        <\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t\n\n\n\n<p><strong>Read more:&nbsp;<a href=\"https:\/\/www.livemint.com\/brand-post\/research-ranking-s-model-portfolio-clocks-79-gains-11638187095790.html\" target=\"_blank\" rel=\"noreferrer noopener\">About Research and Ranking<\/a><\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We have two questions for you: You might have your answers ready. But if we were to do some homework [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":1901,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[9],"tags":[],"class_list":["post-1900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/comments?post=1900"}],"version-history":[{"count":6,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1900\/revisions"}],"predecessor-version":[{"id":61888,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/posts\/1900\/revisions\/61888"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media\/1901"}],"wp:attachment":[{"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/media?parent=1900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/categories?post=1900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.equentis.com\/blog\/wp-json\/wp\/v2\/tags?post=1900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}