Shankar Sharma of First Global must be given credit where it is due. While all other analysts had their knickers in a twist and were tongue tied trying to be apologetic over the S&P downgrade, Shankar Sharma was blunt as usual and made his contempt for S&P and other rating agencies well known.
“Why we are even paying attention to a bunch of guys who have had zero credibility for 25 years” Shankar Sharma wanted to know. “We should not waste any time discussing what these fraudulent agencies say” he thundered and made his contempt clear “Its like Dawood Ibrahim coming and lecturing us on internal security“.
If one thinks about it: Shankar Sharma is so right. In the 1980s, the agencies had high ratings on Latin American countries. Subsequent events shows what a debacle these countries were. The Asian countries had been given AA & AAA ratings and during the Asian crisis in 1997-98, these countries went bust overnight. Likewise, Europe had a AAA rating and they also went bankrupt.
So, at the end of the day, anyone who takes his investment decisions by looking at what rating agencies like S&P and Moodys say is a fool. Shankar Sharma pointed out that the rating agencies had downgraded USA and thereafter, the US markets have rallied and posted handsome returns.
The important aspect is that Shankar Sharma expressed confidence that Indian equities would outperform in 2012 and beat other BRIC markets.
Shankar Sharma added that the rural consumption story remains very strong and he expects the Indian economy to clock a GDP growth of 7.5-7.8% in FY13.
We may add that both Tata Motors and Bajaj Auto have given us exhilarating returns.
Shankar Sharma Portfolio 2012