Trolling on Twitter delivers 150%+ Gain For Shankar Sharma
“Shankar ne Laal shirt pehna hai. Lagta hai kuch Gadbad karega,” Mukeshbhai said, moving the Kamala Pasand in his mouth from one cheek to the other so as to savour the full flavour of the Gutka.
In Dalal Street, Mukeshbhai is regarded as an authority on Shankar Sharma. He keeps tabs on what Shankar is saying and which stocks he is buying.
In the olden days of yore, when Shankar was a dreaded Bear, the colour of his shirts determined whether he was Bullish or Bearish.
However, with the passage of time, Shankar has mellowed. He no longer arouses dread amongst the punters.
“Shankar kuch bhi pehne. Humko isse kya?” Jigneshbhai asked, shaking his head dismissively.
“Kuch stock tip de raha hai ya sirf bhaashan de raha hain Shankar?” Jigneshbhai asked as a follow-up question.
Shankar is presently the hot favourite of the local punters in Dalal Street because he mixes theoretical dissertations with practical stock ideas.
In fact, Twitter Inc, his last stock recommendation, has blossomed into a magnificent multibagger and delivered 150% gain in just 20 months.
Shankar’s logic for recommending Twitter Inc was both conventional and radical.
He did complex number crunching to explain how Twitter was raking in money hand over fist in comparison to its arch rivals Facebook and Snapchat.
However, he also correctly predicted that the menace of “trolling” that has gripped twitter will translate into huge revenue for the Company.
Shankar was right in his analysis because the stock has surged from a beggarly quotation of $17 to the CMP of $43, delivering mammoth gains of 156% to its lucky shareholders in just 20 months.
— L (@larissafernand) October 26, 2016
Contra calls are taken by those who ignore reality
Some academicians pride themselves on being “contrarians” because they believe in doing the opposite of what the consensus is doing.
However, Shankar was contemptuous about such alleged contrarians.
“Mein contra call leta nahin hoon. Contra call who lete hain jo reality ko dekh ke bhi andekha karte hain. Mein reality dekhta hoon,” he told Anil Singhvi in chaste Hindi.
(“I don’t go for contra calls. In fact, contra calls are taken by those who ignore the reality even if it is visible. But I see the reality”).
He also laboured the explanation that contra trades are actually not very contra. Though the data supports the trade, the consensus disregards it and anyone who respects the data is wrongly labeled a ‘contrarian’.
“When somebody ignores data, it’s they who are being contrarian, not me,” he quipped.
Thanks Pratik. Contra trades aren't actually very contra….the data supports the trade, but consensus disregards data. So I always say: when somebody ignores data, it's they who are being contrarian. Not me! https://t.co/h0Xf4HWHcU
— Shankar Sharma (@1shankarsharma) June 5, 2018
25% correction in small-cap stocks is normal
Over the past few weeks, novices in Dalal Street have been roaming around, their knickers in a twist, bemoaning their fate at the savage crash in the stock market.
However, Shankar had no sympathy for them. Instead, he gave them a tight rap on the head with his knuckles.
“If in the great crash of 2008, stocks plunged 50%, what is wrong if they plunge 25% during a normal market correction,” he asked.
Shankar explained that the stock markets had surged in such a mind-boggling manner in 2017 and had posted such enormous gains that a correction was due.
“We had a great 2017. The market was due for a correction. It was not due for a bear market. This is not a bear market. This is a good correction in an overall still what is a very strong smallcap bull market,” he exclaimed.
“We’re done. It does not get any worse than this,” he added in a soothing tone trying to assuage sentiments of the spooked novices.
Many good small-cap stocks are available at cheap valuations
Some academicians are claiming that stocks are still “expensive” and that investors should await further correction before deploying capital into them.
Shankar made it clear that he does not agree with such advice.
“People say it’s expensive and they pick five stocks and say it’s expensive,” he thundered, implying that the academicians don’t know what they are talking about.
Shankar pointed out that there are many good stocks with great visibility of earnings which are trading at rock-bottom valuations of between 5 to 12x earnings. Not only is the growth strong but these companies also have no leverage are irresistible buys.
“That’s where I am hunting. There are plenty of fish in the pond without any doubt,” he said.
Shankar also offered the advice that it is better to buy small-caps rather than large-caps because the former are relatively immune to macro-economic and political issues.
The small-caps are also nimble-footed and are able to maneuver their way through problem areas, he said.
“I am very-very optimistic on smallcaps irrespective of macro,” he said with a flourish.
Sunil Singhania also advices aggressive buy of stocks
Sunil Singhania, the former fund manager with Reliance Mutual Fund and now the founder of Abakkus Asset Manager LLP, has also recommended an aggressive buy of stocks.
“Build positions over next two months for super returns,” he said in a tone of supreme confidence.
Had mentioned on May 19, 2018 to get wallets ready for big opportunity coming in 2-4 months. Exactly in two months we have this “stocks on sale” opp. Build positions over next two months for super returns. BE POSITIVE! https://t.co/nYFRJdxDbH
— Sunil Singhania (@SunilBSinghania) June 28, 2018
Which stocks to buy now?
Shankar hinted that HFCL, his all-time favorite stock, is a good buy because of its dominance in the optical fiber business.
Shankar holds 0.78% equity capital in HFCL.
Shankar Sharma & others investors buy stake in HFCL via warrantshttps://t.co/WZOrKW6jlL
— Varinder Bansal (@varinder_bansal) August 28, 2017
HFCL has a dubious reputation because its promoters were involved in some nefarious activities in the past.
However, Shankar assured that the promoters have learnt from their mistakes and turned a new leaf. They are unlikely to commit any more shenanigans, he opined.
He advocated that investors must keep an open mind and look forward to the future instead of obsessing over the past.
Key to Contrarian Investing: "Most investors drive watching the Rear View Mirror. I drive watching the Windshield". Shankar Sharma, 1965
— Shankar Sharma (@1shankarsharma) September 8, 2017
"The biggest enemy to investment success is a closed mind": Shankar Sharma, 1965
— Shankar Sharma (@1shankarsharma) September 19, 2017
Shankar also recommended Man Industries in the Sohn India Conference 2018.
— avanne dubash (@avannedubash) June 5, 2018
Sunil Singhania has also rewarded us with a stock recommendation, namely Bombay Burmah Trading Corp (BBTC), at the Sohn India Conference 2018.
Good to see investment holding cos still getting noticed. Covered Summit Sec at 150 cr m-cap and lot of people told me that no value in holding cos – but fundamentals always win. No surprise why @SunilBSinghania sir pick was BBTC at @SohnConf. Best way to play Britannia https://t.co/QAEdaShxaF
— Varinder Bansal (@varinder_bansal) June 12, 2018
BBTC is a holding company of Britannia and Bombay Dyeing. It has already given megabagger gains to its lucky shareholders.
However, it is still quoting at a deep undervaluation according to experts.
Prima facie, the advice offered by Shankar Sharma and Sunil Singhania makes sense. It is desirable that we follow it and gently start tucking into high-quality small-cap and mid-cap stocks whenever they correct in a significant manner!