When I see a bear market I say it; others talk about it in the bathroom: Shankar Sharma
It is being neither an optimist or a pessimist, it is just being realist.
You like to look for opportunities among midcaps and smallcaps. You had some great buy calls in the auto space 1.5-2 years back. You like to buy global stocks. How did you get the reputation of a big bear of the market?
There are two answers to that; first answer is that when I see a bear market I say it; the other people talk about it in the bathroom. Aapna nature hai bachpan se thoda sa zyada upfront tha. Abhi hai to hai (I have always been outspoken and can’t help it). It is neither being an optimist or a pessimist, it is just being realist.
The other thing to remember is that investing is never a linear game. Markets change, countries change, currencies change, sectors change, everything changes. Look at a game of cricket. You have two batsmen, one batsman plays his same game irrespective of what the game is or what the pitch is; second batsman will play the game according to the pitch and the situation of the game and the format of the game. Who is the batsman you are going to bet on? The second one, right? You cannot just go and throw your bat at everything hoping that things will be fine, hoping that the pitch will be true, hoping that the ball will not swing or turn. That is a very childish way of investing or playing cricket whatever it is.
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, (everything's fine always) you are a wolf! Boss 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. As a result of that, I have never had a down year in the last 23 years.
Not a single negative year?
Only one year was down in 1998 and that taught me because before that, I was an idiot like playing the same shots irrespective of the quality of opposition. The 1998 Asian crisis taught me ki nahin, aisa nahin chal sakta hai, you need to adjust your play to suit the kind of pitch you are betting on.
I do not think that is ever going to happen in the future of this country. I mean, it was just out of control but it was hard to resist. I remember that day when I was sitting in office in my trading room and everything that I had was up 8%. All my traders told me that sir by next Friday, yeh 40% up ho jayega, uska agla Friday yeh aur 40% up ho jayega (by next Friday, these stocks would be up 40% and another 40% the week after that). I said to myself yaar maine toh thoda bahut paisa lagaya woh 50-60 times ho gaya (I have put in a bit of money and that has gone up 50-60 times in one and a half years). My portfolio is making me look smarter than I am. You know I am an idiot, I do not deserve this kind of money and I went home and I called my traders and I told them, you sell everything. I remember my head traders saying sir, have you gone mad? It is a suicide. I said, “it doesn’t matter. I am committing suicide after making money, not after losing it.”
And it was just a moment when you can call me bearish or you call me realistic and the same thing happened in 2001-2008 and the same thing happened in the last one, one and a half years, particularly from the time IL&FS happened.
You just need to be realistic. There are many people who have a certain mindset. My mindset is different. It is as simple as that and the beauty of markets or investing is that there are many approaches to heaven. There is no one right thing, everything has a season, everything works for some time. Then it may not also work for some time and that is the beauty of this game.