The Easiest Way to Reduce Losses in Stocks

On 7 Jan 2026, I posted about GMR Airports on X.

In that post, I spoke about the weak fundamentals of the company.

I highlighted the 8 straight years of negative EPS.

I emphasized that, if I buy 10 stocks like these, I am most likely to lose money collectively or at-least not make any money.

From that day, till now, the stock is down close to 15%.

15% down in 3 weeks !

This is a daily timeframe chart.

You might say, "Rohit, this is because of recent market downfall. Almost all stocks are falling. Why specifically single out GMR ?"

Fair question.

Fair argument.

Look at the relative strength line on this chart.

It is sloping down.

The stock is underperforming the market.

Whereas, there are other stocks in the market, (example: Hindustan Copper), in which the RS line is sloping up.

What could be the reason that for HindCopper, the RS line is sloping up and for GMR Airports, it is sloping down ?

I don't know.

But,

Just look at the quarterly EPS numbers of HindCopper.

Accelerating EPS growth in latest quarter.

Accelerating Sales growth in latest quarter.

And most importantly, positive EPS in 7 out of last 8 years.

Do you get my point ?

The market does pay attention to fundamentally strong companies even in a downtrending market.

Next lesson:

Look at the base of GMR Airports.

The stock tries to break out.

But fails.

What could be the reason ?

Again, I don't know.

I am not on a quest to find reasons.

I am simply an observer.

I observe.

I learn.

I adapt.

You might argue that, "Rohit, is it fair to compare an airport developer to a mining company?"

My answer: Absolutely, it is fair.

Why ?

Because, you have a choice to put your money in either one of the companies.

Why not check, which company is relatively better ?

Why not check, what would be the best capital allocation decision ?

I am not saying, "Ignore all fundamentally weak stocks like GMR."

GMR is up 400% in 5 years inspite of negative EPS for the last 8 years.

All I am saying is that, if you buy 10 stocks that are fundamentally weak, you most likely to either not make any money or worse yet, lose money.

Learn this lesson as soon as possible.

I like to put the odds of success in my favor.

I stay away from unnecessary risk.

15% collapse in 3 weeks is a disaster.

The writing was already on the wall.

Regards,

Rohit Musale, CFA

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