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Why People Run Away From the Stock Market ft. Sankaran Naren
Original: Why People Run Away From Stock Market ๐โโ๏ธ | Ft.Sankaran Naren
Takeaway
Survive the first equity cycle by being extra cautious, avoid the herd, and the simplest cycle indicator is to enter sectors where 'no one is making money'.
Summary
- ICICI Prudential's Sankaran Naren: best money in equity is made in your third cycle, not the first โ in cycle 1 be cautious like 6th-8th standard student, cycle 2 still careful, cycle 3 you can take risks
- Three lost generations of Indian investors: those who joined 1992-94 (Harshad Mehta scam), 1999-2000 (dot-com), 2007 (GFC) โ each blamed and abandoned equities after first-cycle losses
- Avoid the herd: in 1989 the IPO booms went granite โ aquaculture โ NBFCs โ construction โ real estate โ IT โ each time getting badly hurt to follow
- Counter-intuitive cycle indicator: look at where no one is making money (e.g., metals and telecom 'last year') โ those are safe to enter; if everyone is making money, be very scared
- 2013-14 example: cited Hyderabad as the best real estate market and warned others off; cycles are intuitive โ you don't need balance-sheet expertise, just notice where excess money is being made
Sankaran Nareninvesting cyclesherd mentality
Original description
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