Nifty at 16,000: Shankar Sharma warns investors against getting greedy, says stay light

The Nifty50 created history as it scaled Mount 16,000 on August 3, a milestone that may tempt investors to buy stocks that have done well but one should not get greedy at current levels, Shankar Sharma, co-founder, and vice-chairman, First Global, said in an interview to CNBC-Tv18.

Sharma stressed on agility—don’t putting all your eggs in one basket. Even if a stock or a sector has done well in the past, one should look at diversifying instead of putting money in just one stock or sector, he said.

“When stocks are trading at record high levels there will be the temptation to go out to the deepest end of the pool. Take very large and concentrated stocks which have done very well for you. At these high levels, it needs to correct by say 20 percent and suddenly you are staring at significant losses,” Sharma said.

Investors should control their greed and keep positions well spread out instead of getting boxed into a corner.

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Shankar Sharma

co-founder |First Global

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“We are positioned lightly across several sectors and not just IT or pharma. That is the way we are playing our own philosophy” added Sharma.

Also read: Nifty50 hits 16000! 29 stocks gave multibagger returns in NSE 500 since February

On IPOs

Four initial public offerings (IPOs) hit the market this week, looking to cumulatively raise more than Rs 3,600 crore. Sharma said he took a keen interest in all new-age businesses hitting the market.

“I think it is a momentous event in the history of capital market evolution. Dhirubhai Ambani’s vision to bring equity cult into the smallest investors... RIL IPO was the first big landmark event which brought equity investors closer to home,” he said.

Also read: Sensex, Nifty, mid and smallcaps hit record highs, what is fuelling the rally?

“And, now we are seeing tech or quasi-tech companies getting listed here, which was earlier getting exported to Hong Kong or Singapore or Nasdaq. Now, these companies will list here, as there is enough appetite and capital. I am very happy that these companies are getting listed here in India as they belong here,” added Sharma.

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