Why Shankar Sharma thinks Goldman's O'Neill's views are 'a waste of time'

Shankar Sharma, often called India’s Big Bear (for his pessimistic views on India), believes ordinary investors should not watch financial channels or read financial newspapers or listen to experts like Jim O’Neill, (chairman of Goldman Sachs Asset Management) and Stephen Roach (non-executive chairman of Morgan Stanley Asia).

“…investors should never watch financial channels and read financial newspapers, or listen to people like Jim O’Neill and Stephen Roach. They’re all an utter waste of time,” he told _The Economic Times_in an interview.

In a surprising turn of events, the vice chairman and joint managing director of First Global, a securities firm, thinks they represent the sort of people who are being excessively gloomy. “I see excessive pessimism and low self-esteem around me lately,” he said.

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Excessive pessimism? That’s a first from a man notorious for making dire predictions about the Indian economy - and stock markets - in the past.

So what caused this change of heart? Well, it looks like the floundering global economy has encouraged the belief that India, despite all its near-term hiccups, is in far better shape than the rest of the world.

“You only have to spend some time in the US to turn into an inveterate bull on India. India is too great a country to be down for too long. It will be a dominant force in 15 years,” he told the newspaper.

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That’s a pretty remarkable change of tack for Sharma, who, in February 2008, when the Sensex was trading around 18,000, predicted the index could slump to four digits.

Now, as the economy wheezes under the pressure of high interest rates, slowing growth and policy paralysis on the part of the government, Sharma has turned surprisingly upbeat.

“India’s problems are temporary and nothing that some sensible economic management can’t fix,” he told the financial daily.

In addition, the Reserve Bank of India could pitch in and help by lowering interest rates. First Global had earlier been highly critical of the central bank’s policy of raising interest rates."…if it (RBI) displays this much sense (cutting rates), I will dance outside Mint Street for whatever it is worth," said Sharma.

He’s also similarly unperturbed by the fact that foreigners are shunning Indian equities right now. “Foreign institutional investors, largely, chase momentum; they will be back when the market rallies 10 percent in three days,” he added.

Sharma’s new-found optimism comes a few months after ace investor Rakesh Jhunjhunwala, known as India’s Big Bull, described the current financial year ending March 2012 as “the worst trading year of his life”.In an interview to CNBC TV18, he admitted to never being “so confused in his life”.

He thought three factors hung over the fate of the stock markets: unfolding events in developed countries, inflation in India and government action. “The fact that the government does nothing disturbs me,” he told the news channel in a Diwali interview.

In another recent interview, Jhunjhunwala, who has taken serious hits to his portfolio in the current market scenario, also seemed to be clearly revising his investing approach, according to this article.

Often called India’s Warren Buffett, Jhunjhunwala gave a new spin to his mentor’s theory of very long-term approach to investing, under which you hold stocks almost for life.“Value investing is also buying a stock, keeping it for 12-18 moths and selling at a handsome rate. Value investing is buying value where it may not (always) be lasting value. That value could be encashed over two to three years,” Jhunjhunwala said.

In other words, India’s Big Bull seems to be turning less bullish (even though he remains upbeat about the long term), while the Big Bear too seems to be turning less bearish.

A sign of rather confusing times, don’t you think?