Indian Stock Market Swings and Contrarian Investing : A Study Based on John Neff’s Strategy
Authors
-
Poonam Saini
Assistant Professor, Department of Commerce, Government College Malerkotla, Punjab - 148 023
https://orcid.org/0009-0008-1387-1522
DOI:
https://doi.org/10.17010/ijrcm/2026/v13i1/176058Keywords:
contrarian investment strategy, market swings, bull and bear phases.JEL Classification Codes :G11, G17, G23
Publishing Chronology: Paper Submission Date : March 7, 2026 ; Paper sent back for Revision : May 20, 2026 ; Paper Acceptance Date : May 30, 2026
Abstract
Purpose : This study investigated how John Neff's contrarian investment strategy affected notable stock performances on the National Stock Exchange of India (Nifty 500) between January 2005 and December 2020 in the context of alternating market swings.
Methodology : The CNX Nifty 500 index was used as the benchmark, and John Neff’s investment criteria, including the price-to-earnings ratio, EPS growth, sales growth, total return to price-to-earnings ratio, free cash flow, and earnings per share persistence, were employed for stock selection. To evaluate the magnitude of stock returns, this study analyzed monthly stock prices from a sample of 500 NSE-listed equities and performed independent t-tests at a significance threshold of 0.05.
Findings : The research indicated that John Neff’s contrarian investing strategy generated superior stock returns during bull market phases in the Indian stock market when contrasted with overall market performance. The results supported the idea that stocks impacted by investor overreaction could produce better long-term returns, as the strategy consistently outperformed the benchmark market index.
Practical Implications : These findings have vital implications for investors, portfolio managers, and investment advisers, as they provide information on how to boost returns in the Indian stock market.
Originality : This study further contributed to the investment literature by providing empirical evidence for the efficacy of John Neff's contrarian investment strategy in the Indian equities market. Unlike previous studies, which mostly focused on developed countries, the current study examined the strategy’s performance in a significant emerging economy over 16 years and under changing market situations.
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