Shankar Sharma: You are wrong Sir!

“Sensible soundbytes” is an oxymoron. This is what a great author has said. So if most of you know what is a black swan, you know who I am talking about.

I normally do not watch much TV – except for Ramayan or Animal Planet with my daughter. However, I am many times under great pressure to watch the business channels – from friends in the media.

Yesterday, I believe, Mr. Shankar Sharma came on NDTV Profit and said “The index will not reach 100,000 – not in my life-time – and may not be in your life time too, and you are much younger than me.” Frankly, Mr. Sharma you look young, and maybe you are about 45 years of age. However, for our purposes may I please assume you are 50?

May I also assume that you will live to the age of 72 years? i.e. we are talking about 22 years. May I also assume that India will grow and there will be inflation in India? i.e. we are talking of 6% growth + 6% inflation. That is we will get a growth of at least 12% p.a? I know about standard deviation, and I also know that we will not grow at this constant rate….however 12% over the next 22 years will happen.

Actually the question is not so much about whether it will reach, it is the foolishness at attempting such a complicated question. We cannot predict how long you will live (you could live upto 110) and what rate the sensex will grow at. So it is impossible to answer such a question.

However, mathematically speaking, it looks possible that at 12% growth, you will see 100,000 on the sensex. On the nifty, I do not know (ha ha).


On this assumption Mr. Shankar Sharma the index will grow as follows:

50 2008 16,307
51 18,753
52 21,566
53 24,801
54 28,521
55 32,800
56 37,720
57    2015 43,377
58 49,884
59 57,367
60 65,972
61 75,867
62   2020 87,248
63 100,335
64 115,385
65 132,693
66 152,597
67   2025 175,486
68 201,809
69 232,080
70 266,892
71 306,926



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One Response to “Shankar Sharma: You are wrong Sir!”

  1. Mr. Shankar Sharma may be right after all! If the starting point is changed to say 9500 and we assume a lower growth rate, going by the same logic which you have suggested, sensex may not reach 100,000. What say?

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