In the stock market, there is a very interesting idea called the BBC principle – Bhav Bhagwan Chhe, which means “Price is God.” It is one of the key ideas behind momentum investing and can be a powerful guide for traders. A recent example shows exactly how this principle works in real life.
A Real Example: Paradip Phosphates
Paradip Phosphates recently announced its results on 28th July, showing a net profit of ₹256 crores compared to just ₹6.3 crores a year ago. Revenue also jumped to ₹37 billion from ₹23 billion. This means the company saw a huge rise in margins, EBITDA, and profits. But here’s the surprising part — the stock had already moved from ₹83 to ₹216 in less than two months before the results were made public (see the image below).
IMPORTANT ANNOUNCEMENT
From next week onwards (starting 15th of Aug 2025), we’ll be sharing all our strategy updates, rebalances, and important announcements on our official WhatsApp Channel
Why this change?
Because it’s simpler, faster, and right where you already are — WhatsApp makes staying updated effortless.
Stay updated with:
• Strategy updates & rebalances
• Exclusive announcements & offers
• Important reminders – all in one place
Here’s an instruction manual if you are not aware of Whatsapp Channels
Price Knows Before the News
This is exactly what the BBC principle explains. When the price starts moving sharply upward, it is often a sign that something positive is happening inside the company — even before the news becomes public. In the same way, when the price starts falling quickly, it can be an early warning that some negative news may be coming. The market often senses change before official announcements are made.
Why You Should Pay Attention
Watching price movements closely can help you avoid big losses. If a stock is rising fast, it may be preparing for good news. If it’s falling sharply, it might be heading toward bad news. By learning to read these patterns, investors can position themselves ahead of time. This is why momentum investors always treat price as the most important signal.
After the News Breaks
Once the news is out and everyone knows about it, the stock often slows down. This is because the early, smart investors have already entered the trade and now sell to those buying out of FOMO (fear of missing out). In the case of Paradip Phosphates, the big jump likely happened before the results, and now it might not move much in the near future.
The Biggest Win in the Market
Believing in the BBC principle can keep you away from heavy losses. In the market, avoiding big losses is the first and most important step toward success. Price movements are not random — they often tell a story. Learning to listen to them can make you a much stronger and safer investor.
