If you want to be a smart investor then surely avoid investing in PSU stocks. Now you will ask: Why? A very good reason is, PSU stocks most of the times perform because of a regulatory change. If the change is in their favor, they jump rapidly. Contrary to this, if the change is negative, they fall rapidly. Now you will ask one more question: Why shouldn't I invest in a PSU stock which is in uptrend after a positive regulatory change? Remember PSU stocks are very slow movers, so if you get trapped at a higher price then you will need to wait for a long time to recover your investment. Now you will ask for an example of a slow mover PSU stock: A very good example is NTPC. In August 2009, NTPC was available around Rs. 220, the same stock is now available around Rs. 204.