What is First Global's Shankar Sharma investment strategy?
Markets are in turbulence. Business Standard's Puneet Wadhwa caught up with Shankar Sharma, founder of First Global, to understand how he's tackling the ongoing headwinds and his investment strategy
Puneet Wadhwa New Delhi
Q: A little birdie told me that Mohd Rafi is one of your favourite playback singers. One of his songs is: “Aai dil hai mushkil jeena yahan, zara hatke, zara bach ke, ye hai Bombay meri jaan.” Do you think that quite sums up the market mood right now – a bit nervous and a bit cautious?
Q: Do you think that the damage done to the markets in terms of levels and the overall investor sentiment - be it FII and/or first time retail investors is irreparable or will take a long time to mend?
>Difficult to say the pain/ market downside is over at the global level
>No evidence that bear market will be short-lived
>Bounce-back due; can be led by a fall in crude oil prices
>Macros and global developments will not resolve quickly
Q: Are the markets overdoing the nervousness? The sharp fall from the top is nothing that the markets/ investors have not seen earlier.
>Most ‘new’ investors would not have seen anything like the recent market crash
>Most investors put in money at the right time; made good money
>Quick returns made them bullish; a lot of pain still to be endured
Q: Where do you see the maximum pain coming from, in terms of sectors, right now and 3-6 mts down the line?
>Banking sector will see more pain
>Rising interest rates and inflation, shrinking household expenses are not good for lenders
>Discretionary spending will fall
Q: Where do you find comfort while investing at the current levels?
>Small companies will ride out the current scenario better than their large-cap peers
>20% of the Nifty stocks will not perform for the foreseeable future
>65 - 70% of the stocks will give 15% compounded growth
>Best returns from the Nifty are behind us for the next 12 months
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>Markets can remain flat, or fall more from the current levels
Q: So is there any silver lining amid all this gloom and doom? How are you approaching the markets now – buying selectively or remaining a fence-sitter?
>Great time to buy selectively; easy money and return phase is over
>Markets are now making me work hard in identifying investment-worthy stocks
Q: But retail investors do not have access to company management. So, how do they research and invest the way you do?
>Fair amount of information available on the internet
>Investors need to be disciplined; understand risk and portfolio construct
>Smart stock-picking alone cannot make you rich
First Published: Jun 17 2022 | 7:00 AM IST