Thread by @KAnantrao

My 1st tryst with a Institutional Sell Recommendation
It was Dec'03 near Christmas and I was working in a broking firm as Jr. Research Analyst. One evening our sales trader as me & my Sr. to a fund house for a customary meeting with a Sr. FM. We sat for the meeting around 5 PM

My Sr. who also is my teacher, started the discussion on broader markets both local & global followed by which sectors to look forward for alpha generation. My Sr. was already 2 decades into Mkt. Analysis was type casted as bear in the institutional equities space for sell ideas

I had no clue about my Sr. reputation or his infamous sell recommendations. My only tryst with Sell ideas was restricted to 5-10% downside by retail technical analysts who were more of short term trend followers trading both long/short with equal ease & never had long term view

Coming back to our meeting, My Sr. presented the case for investing in the market even though Nifty had nearly doubled from 920 in Apr'03 to around 1900 in Dec'03. For every idead my Sr. presented, the FM was countering him on why this idea won't work or how this idea is already

given to him by so and so broker at these levels and he is already in XX% profits etc. The FM being a hard nosed professional was poking around with my Sr. for something out of the box maybe & even after 90 mins. the FM doesn't seem satisfied with our trade recommendations.

Finally, My Sr. gave up his hopes of pleasing the FM and asked him, whether he can help with him with a view on some particular stock.
The FM replied, "Can you give me a BEARISH/SELL Recommendation"?
I was zapped at the FM as I thought, how & why this guy(FM) is asking for a sell

recommendation in a raging bull market in the first place. I expected my Sr. to respectfully beat a retreat signalling an end to the meeting.
To my utter surprise, my Sr. asked the FM, how much minimum downside does he expect in a sell reco. The FM said 15-20% would be fine

My Sr. asked for 10 mins and ran a scanner in Metastock, which threw around 10 odd results & then he went through the charts 1-by-1 to finally freeze on 1 stock for Short Sale.
My. Sr asked the FM, will a 40-50% downside sell reco be fine with him as he doesn't have a 15-20% one

The FM replied, he is game with a bigger and bolder sell call and asked my Sr. to disclose the name & give price target & duration
My Sr. gave the name, price was near 710-720 (adjusted to Corp action today) with a target of 350-400 over the next 1 year max. The FM's face paled

Since I had no knowledge of the FM's fund or its holdings, I couldn't quite get the expression but could make out that he didn't like what my Sr. said.
The meeting finally ended as we shook hands and FM said to my Sr. that he should reconsider bearish opinion in the stock he gave

When we came out, our sales guy said bye & my Sr. asked me to join for a Dosa as he was hungry for a snack. While having dosa, I simply blurted out that I was not in agreement with my Sr. on his sell recommendation that too with a 50% downside target in a stock that is Nifty-50

constituent etc. I also asked him about the paled expression of the FM after hearing the stock name. My Sr. smiled & said, the stock he recommended for Bearish happens to be the largest holding of the fund the FM runs. Somehow I had never seen a TA giving such a big tgt for sell

So I was naturally apprehensive & worried for my Sr.
A month later, we both (me & my Sr.) changed jobs & moved to new company in Jan 2004. On Mar 31,2004 the stock which my Sr. recommended to the FM as a bearish case was trading 33% lower & by Apr 30,2004 it was down 42% and by

May 17,2004 i.e. first instance of lower circuit in Indian Equities, the same company was trading 47% lower on a close to close basis. I congratulated my Sr. asking him whether the FM acknowledged his recommendation after all. My Sr. politely replied, I did my job

I was used to being appreciated for good calls and criticised for bad ones till then and naturally my Sr. reply came as a surprise. Its only after years i realised that how right he was. "I only did my Job" makes so much more sense to me now nearly after 16 years of the incident

***Names of people and organisations are not disclosed in order to protect their identity and shall never be disclosed either.
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