After Shankar Sharma sent out his shocking doomsday prophecy that the stock markets would crash in the near future, investors have been running around panic stricken dumping stocks. In the aftermath of Shankar Sharma’s doomsday prophecy, the stocks of several well known companies have slumped to levels that make them tempting purchases.
Ridham Desai of Morgan Stanley is an opportunist and a master at taking advantage of every situation. In his interview to CNBC TV-18, Ridham Desai advised investors to abandon the safety of their bunkers and grab stocks while they can.
Ridham Desai put it in very simple and persuasive terms: This is not the time to be defensive. This is the time to be aggressive.
Ridham Desai explained that the reason for his bullishness was because the valuations are quite attractive, the sentiment is broken and the positioning of the investors is bearish. He also explained that the yield curve is nudging higher, which means the bond market growth is coming back.
For those of us who are apprehensive, Ridham Desai promised that while there would be pain in being aggressively positioned at this point of time, the rewards would be “outsized” when they come through.
What is interesting is that Ridham Desai has chosen to go the exact opposite path of Shankar Sharma. In his doomsday prophecy, Shankar Sharma made it clear that he was opposed to banking stocks because of their rising NPAs and falling NIMs. However, Ridham Desai said that the Morgan Stanley portfolio was “massively overweight on banks” and that it is one of the “biggest overweight positions” in the portfolio.
Now the million dollar question is about how you should position yourself. It is true that as a sensible investor you cannot afford to ignore the prophecies of either Shankar Sharma or Ridham Desai, both giants in their field. This is where our celebrated and award-winning “halfway house” philosophy, which is specifically designed for uncertain times, comes into play. What you should do is step cautiously into the battlefield in your protective gear, with your eyes and ears open and on the lookout for snipers. If you spot an enemy, shoot first and ask questions later. In other words, buy stocks in a slow and measured manner of only the best companies with a proven track record. Don’t touch companies with a dubious track record with a barge pole no matter how tempting the valuations. This way, you stand to benefit irrespective of whether Shankar Sharma is right or Ridham Desai is right.