Posted tagged ‘shankar sharma’

Shankar Sharma: You are wrong!

September 1, 2008

“Sensible soundbytes” is an oxymoron. This is what a great author has said. So if most of you know what is a black swan, you know who I am talking about.

I normally do not watch much TV – except for Ramayan or Animal Planet with my daughter. However, I am many times under great pressure to watch the business channels – from friends in the media.

Yesterday, I believe, Mr. Shankar Sharma came on NDTV Profit and said “The index will not reach 100,000 – not in my life-time – and may not be in your life time too, and you are much younger than me.” Frankly, Mr. Sharma you look young, and maybe you are about 45 years of age. However, for our purposes may I please assume you are 50? May I also assume that you will live to the age of 72 years? i.e. we are talking about 22 years. May I also assume that India will grow and there will be inflation in India? i.e. we are talking of 6% growth + 6% inflation. That is we will get a growth of at least 12% p.a? I know about standard deviation, and I also know that we will not grow at this constant rate….however 12% over the next 22 years will happen.

On this assumption Mr. Shankar Sharma the index will grow as follows:

50 16,307
51 18,753
52 21,566
53 24,801
54 28,521
55 32,800
56 37,720
57 43,377
58 49,884
59 57,367
60 65,972
61 75,867
62 87,248
63 100,335
64 115,385
65 132,693
66 152,597
67 175,486
68 201,809
69 232,080
70 266,892
71 306,926
72 352,965

What will Mr. Market do?

May 6, 2008

As is fashionable and necessary there is a discussion on a leading channel about how the market will behave. Of course to quote Taleb “Sensible sound bytes is an oxymoron”. So please listen to all the noise and come to your own conclusion.

There is Shankar sharma who is predicting that the market might see 10,500 (when he says market can fall 50% from its previous top, I guess this is what he means), says we are in a bear market. He says the bear market can last 2-3 years.

Then there is Rakesh Jhunjhunwala who says market the market is in a correction mode – part of a bull market and this phase can last 12-18 months.

Frankly all these experts are guessing – and they are looking into a teleprompter or a tv camera not a crystal ball.

Getting the market right means –

1.getting the direction right (from 21k, the market will GO DOWN),

2.say by how much (it will go to 14,000),

3. how long it will be there (time that it will spend at say 14k), and by implication

4. when will it start going up. AND HAVE THE CONVICTION TO STAND BY IT.

Like John Templeton, I also do not know anybody who knows anybody who can get all the factors correct, all the time, every time. So stop listening to sure fire timing success stories – it requires too much discipline to be successful with Technical skills.

Are we in a bear market? Only Mr. Market knows…

April 23, 2008

As is customary there is now a series of interviews to find out whether we are in a bull market or a bear market.

Udyan Mukherjee is speaking to a host of experts to ask for their views.

Rakesh Jhunjhunwala – (whose call on the IT stocks last June was bang on target) says we are IN a BULL market, but we are going through a correction. And it will last about 18 months.

Shankar Sharma – who is of the opinion that we are in a BEAR market which can last 2-3 years.

Frankly we are all searching for that “magic pill” which will tell us the correct answer.

Unfortunately, there is no asnwer.

I think to be able to take any action (i.e. to know when to buy and sell) one needs to know the following:

1. At 21,000 you should have known the direction (markets will go down)

2. How low can the market go (say 14,300)

3. How long will it remain there?

4. When will it turn back up?

AND THEN HAVE THE CONVICTION that he is right even if he gets signs that he might be wrong!

And as John Templeton says, :I do not know anybody who knows anybody who has been able to time the market EVERY TIME! Surely, it looks impossible!

So are we in a bear market, bull market, sideways market, linear bear run, etc. is actually known only to Mr. Benjamin Graham’s fictional character Mr. Market!