Why D-Street calls him Big Bear! Shankar Sharma has an answer
Shankar Sharma claims barring 1998, he has had no down year in last 23 years.
“When I see a bear market, I say it. Other people talk about it in the bathroom. My nature is upfront since childhood, so it is neither being an optimist or a pessimist, it is just being a realist,” he explains.
Sharma says investing is never a linear game.
“If you look at a cricket team, one batsman would play the same game no matter what the game is or the pitch is. But the second batsman would play it as per the pitch and his team’s situation in the game. Now which batsman are you going to bet on? The second one,” says he.
In the stock market, one cannot just go out there and throw the bat hoping that the pitch will be true, hoping that the ball will not swing or turn, Sharma explained.
“That is a very childish way of investing or playing cricket, whatever it is,” says he.
Sharma, Vice-Chairman & Joint MD of First Global, says he has no preconceived notions about anything.
“You get paid to be a professional and professionals need to deal with a situation on its merit. Nobody has a clue what will happen tomorrow. We will see it, evaluate it based on new data points that emerge. You need to be open to the new information and that is the way I define my investing,” says he.
Sharing his experience from nearly two decades of investing in the market, Sharma said: “In India, if you are thinking that way, you are called a bear. If you are thinking like a maniac ki sab cheez achha hi ho sakta hai, you are a wolf!”
“I do not want to be a mad man. And the result of this mindset is that I have held stocks for 20 years, which are up 150 times. I have held stocks for 20 minutes also, where things changed when something new emerged,” he said.
Sharma claims barring 1998, he has had no down year in last 23 years.
According to him, spotting multibagger stocks may feel like an adventure on Dalal Street, but right asset allocation is the key to be in the game and win it.
The veteran investor said correct asset allocation can do virtually 90 per cent of the task.
“It gives you great thrill to unearth multibaggers, but getting your broad asset allocation right is a lot more efficient way of creating wealth,” said Sharma.
He said equity benchmarks Sensex and Nifty have generated around 7 per cent annualised returns in last five years, while fixed income assets gave 7.60 per cent.
“If you just got that allocation right, you are far better off. It is not about equity or debt or gold or real estate or domestic or local. You should have a foot in every major investible class and diversifying overseas. I have done this now for a long time, for like two decades,” he said.
Commenting on the market scenario after the recent correction, he said it has become very simple to invest in this market. “Profit earned in a bear market are very valuable returns,” he said.
He said bear markets are good, because it is a disinfectant. “All the ills hidden so far by rising stock prices come out when prices fall suddenly and you are left with your pledges out in the open and the reasons why you pledged them become known,” Sharma said.
He said the market is now forcing investors to concentrate on banking stocks. Earlier, there used to be a lot more banks.