Shankar Sharma on his picks, portfolio and why it is impossible to avoid losses in the stock market

Foreign investors have shunned Indian stocks over the past few months as the economy has shown signs of weakening due to falling demand for consumer goods, such as automobiles, and lower government spending.

Growth in has slowed, with demand for everything from cars to cookies taking a hit, prompting the government to take measures to boost growth, including a widely cheered move last month to slash corporate taxes.

Sharma has built a reputation as an ace stock market investor, but even ace investors like him are said to have lost money.

Sharma’s company First Global, a global securities house, is known to hunt for opportunities in developed economies such as the US and the UK as well as emerging markets such as Brazil and Russia.

Sharma touched on these aspects in the interview. People say I lost money in investing, he said, adding that his responses are two.

“One is, if you look at a player like Virat Kohli or Sachin Tendulkar. Are they going to get hundred every innings? It is not possible. Okay. Their average is 50.”“What does that mean? That in the other innings, they will have a low, you will have a zero, you will have a five, you will have a ten and you can have a whole series also in which you won’t anywhere get close to your averages.

That is the nature of the beast. “The second thing, according to him, is the way to look at the losses in the market. You can look at it in two ways, he said.

You can look at it as a penalty and you can look at it as a fee.“So think about it as an entry price, if I take you to an amusement park and the guy tells you Rs 500 entry fee, you will happily pay but the guy at the ticket counter tells you, it is a Rs 500 penalty, you will never go there.

”According to Sharma, the worst part of the market has been the industrials. So there are companies in the small-cap or even in the mid-cap space that are to some degree “the pipes or plumbing of the economy”.

The government will need to direct stimulus to these problem sectors and if they do that then you have beneficiaries, he said.