Sankaran Naren's Top Long-Term Investing SECRETS Revealed | Sonia Shenoy Podcast

ELI5 / TLDR

Sankaran Naren has run money for three decades and now oversees about 11 lakh crore at ICICI Prudential. His whole method boils down to one habit: buy what everyone hates, sell what everyone loves, and judge it at the level of asset classes rather than individual stocks. He thinks the cleanest signal is plain returns — anything up 100% in a year you avoid, anything down 40% you start nibbling at. And the most counterintuitive bit: the less time you spend investing full-time, the more money you tend to make, because full-time investors can’t sit still.

The Full Story

Where the cycle is right now (late 2025)

Naren spends the first stretch placing the current moment. The small-cap mania is gone — people who tried to make easy money every month learned they couldn’t. Mid-caps are still a bit pricey. The new fever has moved elsewhere: loss-making “new age” companies, and silver, which has run up 100% in a year.

The big unknown sitting over everything is the US. He thinks American AI stocks are still overvalued and will go through a “valuation reset” sometime in the next three years. The open question — the one he keeps saying he doesn’t know the answer to — is whether India falls alongside the US when that happens, or escapes.

“It is not as if absolute valuations in any part of the Indian market is yet cheap… that kind of situation has not yet come.”

So he’s more optimistic on India than a year ago, but it’s not a screaming buy. His one-line asset call for 2026: more positive on equity, more negative on precious metals, more negative on US AI stocks, less positive on global investing — all relative to a year ago.

Contrarianism with a calculator

This is the core of the whole conversation. Naren’s style is to swim against the tide, and he traces it to the 1990s, when he watched price-momentum strategies blow up after the 1994–98 bull market. The lesson that survived: buy what’s unloved, but only with research behind it.

The “with a calculator” part matters. Plenty of cheap things deserve to be cheap.

“Contrarianism with a calculator — which means contrarianism with good research — that works the best.”

Buy junk infrastructure in 2010 or falling NBFCs in 2017-18 and some of them go to zero. Good research keeps you from catching a falling knife that never gets up.

The trick he keeps returning to: do this at the asset class level, not the stock level. Asset classes don’t go to zero; individual companies can. His checklist is mechanical and almost crude on purpose — an asset class that has delivered zero return for 5–10 years, or minus-40% in a single year, becomes a candidate. He launched a US fund in 2012 precisely because US equities had returned zero for 12 years and nobody believed they could perform. The longer the drought, the bigger the margin of safety.

“If someone comes and tells you 10 years zero return in an asset class, that becomes a good starting point.”

He’s careful about timing, though. One bad year doesn’t make something contrarian — you have to look at five, six, even twenty-year returns. A market with a flat 24-year return (Hong Kong’s index in 2024, in his example) is far more interesting than one that just had a rough twelve months.

Sell less, switch more

Knowing when to sell is the question that haunts most investors. Naren’s reframe is to delete the word “sell” entirely and replace it with “switch.”

“The day you use the word sell, you get into behavioral problems. The day you move to the word switch, you will have comfort.”

A switch forces you to compare two things: I move out of silver into this hybrid fund, or into a house, or into funding education. You evaluate the trade, write down the logic, and the decision becomes manageable. You’re not staring at a sell button and your own greed; you’re choosing the better of two opportunities.

He admits his own most recent switch — moving his multi-asset fund’s gold and silver money into equity — has been mistimed so far. He says so plainly, which is part of the point.

Why you should NOT be a full-time investor

The most surprising thread. When Warren Buffett visited India (about 7–8 years before the recording), he told a room that in five decades you get roughly five genuinely good chances to buy, and your entire return depends on what you did in those five moments.

Naren takes that literally. If only five years out of fifty really matter, why would you sit at a screen every day? Full-time investors can’t resist doing something daily — and constant activity means you eventually sell during the long, boring stretches when you should just be holding.

“You can be a surgeon. You can be a teacher in a college… but don’t be a full-time investor.”

His own edge, he says, comes from being a busy CIO with a hundred other things to manage. That distraction is what let him hold a power stock from 2018 to 2022 waiting for it to work. Patience, it turns out, is a byproduct of having something else to do.

Behavioral mistakes are personal, and you need a second pair of hands

Naren is unusually honest that he has a specific weakness: he sells too early. Much of the money he made in telecom and power stocks he credits to colleagues who physically held him back — “you can’t sell so cheap, wait for it to double, wait for it to triple.” One colleague made far more on a telecom stock simply by holding longer than Naren could stomach.

Everyone has their own flaw — some can’t buy on a crash, some can’t sit through a flat stretch. You can’t eliminate the mistake; you can only manage it, usually by pairing up. Two people offset each other’s errors. But there’s a limit: citing Michael Mauboussin, he says big investment committees fail because the errors add up instead of cancelling. The sweet spot is three people.

Premortems, and a few mental models

From Mauboussin he also took the premortem — the inverse of a postmortem. Instead of asking “who screwed up after the fact,” you ask beforehand: an RBI policy / election / budget is coming, what are the possible outcomes, and what do we do under each? You assign probabilities rather than pretending you know. ICICI Pru runs one before every Fed meeting, budget, and US election, and one every ten days on the India–US trade treaty.

He also keeps insisting on two ideas people resist:

Investing is not arithmetic. Some of what any expert tells you will be wrong, by nature. Even the best investors make mistakes; the goal is more rights than wrongs, not zero wrongs.
Not deciding is a decision. Holding 100 shares and choosing not to sell is an active bet. Skipping an IPO is a choice. People pretend inaction is neutral; it isn’t.

The macro footnote and the FII myth

On India’s worries — weak jobs, trade deficit, a record-low rupee, foreign investors leaving — Naren is relaxed. India’s macro, he argues, has been “fantastic, never better”; the only real problem for a decade has been valuation, not the economy. He flips the FII anxiety on its head: heavy foreign buying is actually the dangerous signal, and FIIs fleeing (2008, 2013, 2020) has historically marked the best times to buy. India was the world’s worst-performing market in 2025 with nothing macro going wrong — which, to a contrarian, reads as opportunity.

The mindset, distilled

The show is called “Money Mindset,” so it ends there. Naren’s answer is detachment.

“The detachment to the money allows you to make money. Too much attachment to the money does not allow you to make the money.”

If you’d watched your portfolio value daily in the depths of 2008 or 2020, you’d never have invested at the bottom. Investing in panic is the single best strategy — but most people physically can’t do it, which is exactly why the panic exists. For everyone else, the reliable second-best is asset allocation plus SIPs, with one rule: never start an SIP in an asset class that’s already in euphoria.

Key Takeaways

Judge at the asset-class level, not the stock level. Asset classes don’t go to zero; individual companies can. This lets you act on crude return signals without deep company knowledge.
The mechanical contrarian filter: anything up ~100% in a year, avoid; anything down ~40% in a year, start nibbling. Longer droughts (5, 10, 24 years of zero return) mean bigger margin of safety.
Contrarianism without research is dangerous — cheap junk (2010 infra, 2017-18 NBFCs) can go to zero. “Contrarianism with a calculator.”
Replace “sell” with “switch.” Always frame an exit as a move into a better opportunity; it removes the behavioral paralysis.
Buffett’s five-in-fifty rule: roughly five great buying chances in a 50-year career decide your whole return — which is why being a full-time investor is counterproductive.
Patience is a byproduct of being busy elsewhere. Having other responsibilities is what lets you hold a position for years.
Behavioral mistakes are personal and permanent; manage them by pairing up. Optimal decision group size is three — bigger committees compound errors instead of cancelling them (Mauboussin).
Premortem over postmortem: before any big event, map the probabilistic outcomes and pre-decide your response.
Not deciding is a decision — holding, or skipping an IPO, is an active bet.
FIIs leaving is bullish, not bearish. Heavy foreign buying historically marks risky tops; capitulation marks bottoms.
India 2025: worst-performing market in the world despite sound macro; the only persistent problem has been valuation, not the economy.
Detachment from money is the enabling condition for buying in panic — the best strategy. Second-best for everyone else: asset allocation + SIPs, never started in a euphoric asset.
A great company is not the same as a great stock. You can overpay for an excellent business (India’s quality names, 2020–2025, underperformed fixed deposits).

Claude’s Take

This is a genuinely good interview, and the score reflects that. Naren is doing something most fund-manager appearances avoid: he repeatedly says “I don’t know,” names his own behavioral weakness, and admits his current silver-to-equity switch is losing. That candor makes the parts he is confident about more credible.

The framework is also unusually portable. “Buy asset classes down 40%, avoid ones up 100%, and call it switching not selling” is simple enough to actually use, and the asset-class-not-stock distinction is the kind of idea that quietly reorganizes how you look at a portfolio. The “don’t be a full-time investor” thread is the most interesting and the most under-discussed in finance media — it cuts directly against the entire trading-content economy, which is a point in its favor.

Where to keep a skeptical eye: this is a sitting CIO talking his own book. “Be more positive on equity, do asset allocation, multi-asset funds are great” is also, conveniently, a pitch for ICICI Prudential’s products — and he runs the multi-asset fund he praises. The mechanical filters sound cleaner in hindsight than they are in real time (he himself admits his timing is off right now). And “investing is not arithmetic” is true but can double as a shield against accountability. None of this is dishonest; it’s just worth remembering the man has products to sell. The wisdom is real; the recommendations are not disinterested. An 8 because the thinking is high-quality and refreshingly honest, held just short of higher by the inherent conflict of a fund manager dispensing fund-friendly advice.