There are NO great investors, ONLY..., says Shankar Sharma amid ongoing selloff in Indian stock market

The Indian stock market is undergoing a tough phase, with the portfolio of most investors flashing red. Against this backdrop, ace investor Shankar Sharma on Tuesday, February 18, posted on social media platform X (earlier Twitter), “There are NO Great Investors. There are ONLY Great Bull Markets”, highlighting the challenges of achieving returns during bearish phases..

Sharma's statement emphasises that while many investors may have made notable returns through trading in the stock market, it is essential to understand the role that market trends and sentiment play. A lot of times the returns made are heavily influenced by the prevailing stock market conditions, particularly the bull markets.

Bull vs Bear Market

A bull market is characterised by rising stock prices, where any and almost every investment can seem like a winning bet. During such periods, even novice and average investors, who lack a deep understanding of investing, can see significant gains. When stock markets are in a bull run, it is easier to achieve impressive returns, regardless of the investor's strategy or expertise.

The post-Covid phase in the Indian stock market can be described as a bull phase, where stocks lacking valuation comfort or those with shady fundamentals made investors massive returns. However, the tide has now turned.

The Indian equity benchmark indices are at multi-month lows, down 13% from all-time high levels, and the fall in the broader market is even worse, pushing them over 20% lower from peaks and into the bear territory.

According to some experts, this year has begun with a perfect storm of high valuations, dismal earnings, and economic uncertainties. The impact of recent political events has also brought some sanity to the irrational exuberance that the markets have experienced for years.

Therefore, during a bear market, most investors, including seasoned ones, face the heat. It is quite difficult to escape the wrath of stock market bears as often during this time an individual investor's brilliance takes a back seat and market conditions dictate the portfolio returns.

Even amid the ongoing correction, some of India's biggest stock market investors have witnessed a near ₹69,000 crore wealth erosion. This goes on to strengthen Sharma's point that no matter how skilled an investor may be, without the tailwinds of a strong bull market, it can be incredibly difficult to achieve outsized returns.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.