As markets continue their downward spiral, veteran investor Shankar Sharma has made a blunt remark on the pain being felt by new investors, especially those cutting down on Systematic Investment Plans (SIPs). “Stock markets — this is the way the game works. Like I said earlier, let them also suffer what we have suffered over 35 years,” Sharma said in an exclusive conversation with Business Today Executive Director Rahul Kanwal.
He dismissed the belief that markets had become non-cyclical, stating that many small investors had argued that this time was different. “I’ve been lectured to by many small investors, told that I don’t know anything about the market. This time, it’s different. Then let them suffer. They will have cancellations of SIPs.”
His comments come at a time when SIP investments, which had been steadily rising for years, are now witnessing a pullback — a sign of investor panic amid the ongoing correction. The benchmark BSE Sensex has retreated 13% since October 2024, while BSE Midcap and Smallcap indices have tanked 22% and 25% respectively.
When told that his ability to absorb market pain is much greater than that of small investors, Sharma doubled down on his stance. “We were also small at some point in time. We became big because we never cried. We went out, dealt with it, and overcame the odds. These people will need to do the same thing. The bloodletting has to happen. It has just begun, it will take a while to be completely out of the system.”
Sharma dismissed any sympathy for those who entered at high valuations, stating that they “helped nothing but the FPIs get exits.” “I see no reason why anybody should be feeling sorry for the investors who piled in the last couple of years. They were coming at a pretty much very elevated level. Let the new investors also suffer the same pain that we went through. They will become better, if nothing else. This is part of a market journey as an investor. Let’s not be sorry for them.”
On the broader market outlook, Sharma warned that the bull run of the last five years is over. "Markets are cyclical. We’ve had a five-year bull market. On March 23rd, we will have the fifth anniversary of the bull market. When a bull market reaches five years, it’s close to the death day. The bull market as it existed no longer exists."
While sharp rallies will occur, Sharma said index-level gains will be hard to come by, and 2025 could see negative returns. "This will be the time when fund managers will need to be extremely hardworking because the days of easy money are over. They will need to be more bottom-up, more picky rather than just bet on the macro.”