Hindustan Zinc is an example of why timing the market is almost impossible

Market experts often say, "time in the market" is more important than "timing the market." With the asset base expanding over the last few years, investors are spoilt for choice as to where they can put their money to work. From equities to real estate, gold, silver, and cryptocurrencies, there are a plethora of options.

Quite often, the small retail investor ends up chasing momentum and more often than not finds herself on the wrong side of the trade. However, it's not just small investors who try and fail in "timing the market". Even the best-informed corporates could find themselves on the wrong side of a trend. Udaipur-based Hindustan Zinc

is a recent example.

The ₹2 lakh crore ($22.8 billion) Hindustan Zinc hedged 131 tonnes of silver, which is around 34% of its estimated silver production in the second half of the current financial year, at $37 per ounce. Fast forward to today, and silver prices have surged to around $50 per ounce, a multi-year high.

The surge has been driven by a mix of factors: tightening supply, gold’s upward momentum, increased industrial demand and a general belief that silver was undervalued for too long.

Yet, despite getting the direction absolutely right, Hindustan Zinc won’t fully benefit from this rally because a significant portion of its output was locked in at much lower prices.

So, if India’s only integrated and listed silver producer - a company that was fundamentally bullish on silver from around $30 per ounce, could not foresee the magnitude of this move, perhaps the takeaway is simple: timing the market perfectly is next to impossible.

That could also explain why, despite Silver moving at such breakneck speed, the same has not been seen for Hindustan Zinc. The stock had hit a record high of ₹807.7 on May 22, 2024. Since then, the stock is down 40% from those levels.