Zerodha staffer owns 3,100 stocks — nearly the entire NSE universe trading today. Here's what Nithin Kamath says

While portfolio diversification is a strategy often advised by investment advisors to hedge your bet against sharp losses, an investor has taken it to the next level. Zerodha founder & CEO Nithin Kamath shared on his X handle that a colleague has invested in 3,100 stocks, which is up by 1,000 stocks from last time. Kamath said that it was akin to taking portfolio diversification to its logical extreme.

"Portfolio update of a colleague at work. He's now invested in 3,100 stocks (it was 2,100 last time), taking diversification to its logical extreme. At least he's beating G-Secs." Kamath said.



To give readers some perspective, 4,244 stocks were trading today on the BSE while 3,136 were on the NSE.

Kamath's tweet received some interesting reactions online.

"He’s not diversifying. He is building India’s first personal mutual fund. At this point, even AMCs are taking notes.," wrote a user named @bullish_india.

"Even if he rebalances once a year, the STT, DP charges, and bid-ask spreads on illiquid microcaps create a drag that guarantees underperformance against an Index fund. This is less of an investment strategy, it is a Regret Minimisation Strategy," another tweet said.

Also Read: IPO investor alert: Zerodha CEO Nithin Kamath flags how tax arbitrage game by VC firms is driving valuations

"If you own everything, you never have to feel the pain of missing a multi-bagger. But the cost of curing that FOMO is accepting structural mediocrity. He has successfully hedged away the risk of being wrong, but he has also hedged away the possibility of being right. This portfolio is the worst of both worlds," Shubham Bagade said.

Stock markets were in a buoyant mood today, continuing their uptrend. The benchmark indices Nifty and Sensex have closed with gains in seven out of the last 8 sessions. They are likely to end positively today as well.

Nifty was trading at 26,207.25, up by 154.60 points or 0.59%. In this, 36 stocks traded with a positive bias while 14 traded with a negative bias.

(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)