The Indian stock market has seen a sharp downturn recently, leading to a flurry of reactions from investors and market experts. Amid the turbulence, ace investor Shankar Sharma’s thought-provoking tweet has struck a chord with market participants, highlighting a crucial but often overlooked aspect of investing — exit strategies.
Sharma, known for his sharp market insights, took to social media to highlight a critical flaw in retail investors’ approach — an overemphasis on buying strategies while neglecting exit plans.
“It’s surprising, if not downright shocking, that millions of GBs of gyan is given daily on “Buying” strategy. But Zero wisdom is given on “Selling/ Exit” strategy. As a result, the small Investor believes he’s becoming Arjun. While, in reality, he’s becoming Abhimanyu,” Sharma wrote in a post on X, (Formerly Twitter).
This analogy, drawn from the Mahabharata, highlights the plight of retail investors. Arjun, the skilled warrior, had complete knowledge of the battlefield, whereas Abhimanyu, the valiant warrior, knew how to enter the deadly ‘Chakravyuha’ battle formation but lacked the knowledge to exit, ultimately leading to his downfall.
Exit Dilemma
Sharma’s analogy suggests that retail investors, pumped with knowledge about buying stocks, often enter the market with confidence but struggle when it comes to exiting, especially during turbulent times.
His tweet comes at a time when Indian markets have witnessed sharp corrections, with investors facing mounting losses. Market veterans often stress that a well-planned exit strategy is as crucial as a solid buying strategy, but Sharma’s remark highlights that this wisdom is rarely emphasized in mainstream financial discussions.
As volatility grips the markets, Sharma’s message serves as a timely reminder for investors to not just focus on stock selection but also master the art of booking profits and cutting losses at the right time. After all, in the game of investing, knowing when to sell is just as critical as knowing what to buy.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
