Shankar Sharma cites Jhunjhunwala's Titan bet, shares mantra to pick potential multibaggers

Seasoned investor Shankar Sharma, who is renowned to cherry-pick lesser-known multibagger counters at Dalal Street has shared a mantra with investors to pick such counters at Dalal Street. In an exclusive interview with Business Today TV, Sharma, the founder of Gquant Investech, said that investors should go for a handful of companies which have some 'problems' in them.

Explaining his rationale, Sharma said that investors should bank on well researched 15-20 stocks, which they see as potential multibaggers instead of relying on only one or two. He said that investors should pick 2-3 companies, which have some 'problems' in them and when these companies come out of such issues, they tend to deliver astronomical returns to investors at each step.

Sharma cited an example of late legendary investor Rakesh Jhunjhunwala, who is often known for his early days in the Titan Company, which changed his fortunes. However, Sharma cautioned that such stocks may test the patience of investors and may take a very long time for turnarounds.

In the interview with BT TV, Sharma said Jhunjhunwala picked Titan in late 1980s, but it remained a 'sub-par' performing company from 2003-04. "Jhunjhunwala lived with such stock for 10-15 years but it delivered about 100 times in the next two decades, but this was the only company he bought during this period," he said.

Jhunjhunwala did not end up only owning Titan Company, said Sharma. "A proficient investor may have a general view about the company in the long term, but that does not necessarily mean it will turn around in the similar way or in the similar time. Some changes or fixes by management can lead to turnaround over the years, where investors can make supernatural returns," he added.

Sharma said that he himself bought Apple in 2002, when neither the product was doing good nor Steve Jobs became a success. But it later changed fortunes. He even cited examples of his personal picks of chemical counters he bought in 2011 or infra stocks he bought in 2003-04, which turned out exceptionally well.

Sharma said that investors can look at the companies which are servicing the lesser developed parts of the country. He talked about the companies which are serving lower-per-capita or low-GDP states such as West Bengal, Orissa, Bihar or North-Eastern states, where numbers are coming in breakneck.

"Investors can pick the companies which are servicing less prosperous states of the country because headroom for the growth in these parts is much more compared to the richer states. Investors can put their money in consumer goods, FMCG, retail or infrastructure related companies in these states," advised Sharma.

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