March was a shocker of a month as equity markets across the globe fell like ninepins, and India was no exception. But, one fund manager saw it coming which helped him buck at a time when Nifty50 was down more than 23 percent.
In this podcast ‘D-Street Talk’, Shankar Sharma - the co-founder and vice-chairman of First Global - candidly explained that March was like a movie which turned bad before the interval in February.
“We analysed what was going on with the virus globally and in India. And, to give the context – globally markets had a tremendous 2019 except India. Historically, when you enter a year with this kind of performance behind you, one end up thinking that we might just see a repeat of what happened in the previous year,” says Sharma.
With decades of experience on his side, Sharma said that typically these scenarios seldom play out. “We were very vigilant when we entered in the year 2020 and we were of a firm belief that financials were a crowded trade,” highlighted Sharma.
“And when the Coronavirus started, I knew that this could well be the reason of a fall in markets. All it required was a reason, and COVID-19 gave that reason. The purpose is not just to make money on the upside but also save money on the downside – you have done a great service to your investors,” he said.
Shankar Sharma’s India-focused PMS strategy, Indian Multi-Asset Allocation Portfolio (IMAAP), fell just 3 percent against a 23 percent, while the other scheme ‘India Super50’ fell by over 7 percent in the same period.
On the extension of the lockdown:
The lockdown is necessary but the damage has to be viewed clinically, says Sharma. The damage to the economy is likely to be in the range of $200-$500 bn of lost output and that is the cost that will come out of government revenue and financials.
“We have seen both these pockets not in great shape at the moment. It is more like a depression kind of a situation and not a slowdown or a recession anymore,” says Sharma.
(Tune in to the podcast for more)
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