Does India Have its Share Of ‘MEME' Stocks?

In the wake of the global pandemic we saw one of the fastest market crashes and also one of the most rapid recoveries in stock prices. Come 2021 we saw the emergence of the so-called ‘meme stocks’. What are these ‘meme stocks’ and do we have such stocks in India? Geyatee Deshpande shares some interesting observations on the subject while also clarifying the concepts related to meme stocks

- Geyatee Deshpande

When we look at the markets in the past couple of years, one thing is for sure – the markets have been different this time around! Different in what sense, one may ask. The markets have always been volatile and seen their course of highs and lows as also manipulation by some unethical traders with influence in the past. Clearly the story has been different since the markets bottomed in March 2020 in the sense that if you have to understand market behaviour you will have to divide the equity markets into two separate compartments. One compartment belongs to the retail investors and traders who probably opened investment accounts for the first time in their lives and started investing their monies by relentlessly ignoring the market levels and quintessential valuations altogether.

The second compartment comprises the regular professional investors and investors who have been in the markets for over a decade and understand value investing and momentum investing with a perspective that is more textbook-oriented. Institutional investors are used to looking at historical averages and conducting ratio analysis, industry analysis and then speculate the growth numbers after discussing at length with the management of the company they want to invest in. Then there is industry analysis and of course there is macroeconomic analysis or simply put, economic analysis to identify which global markets might be more rewarding.