Rakesh Jhunjhunwala and Shankar Sharma Debate

Last time when we met on this forum, both our gladiators had different opinions. Rakesh Jhunjhunwala was of the view that global economic recovery has started and that corporate India will surprise us. Shankar Sharma kept on insisting you cannot ignore China and that if China goes under, commodity prices will crash. This week, the focus will be different.

So far we are focussed on China but what about the US consumer? The US consumer is now saving more and is certainly spending less.


Rakesh Jhunjhunwala: I mean there is no question of replacing, it is going to be a gradual replacement. China and India, Brazil and Indonesia will replace them. Over a period of time, this is going to be Asia’s century; I have no doubt about it.


But Rakesh, history always repeats itself. Look at the 100-year chart of Dow. The excess of any bull market do not get cleaned up in less than one year.


Rakesh Jhunjhunwala: It is their excesses, so they are, as Chris Wood says and which I agree and which I believe that the Western world is structurally in a bear market. Asia in the emerging world is structurally in a bull market.



Can we ignore the global micro?


Rakesh Jhunjhunwala: We can, we have to look at the global micro to the extent to which it affects India. In fact, the country which will outperform, and out-performance will be known in the next 24 months, will have tremendous advantage because if the world does not do well, interest rates worldwide will remain extremely low.

So, therefore capital will flow and second is capital will flow where there is performance as it always does and then it will overflow. America was not doing well from 64 to 82, Japan had an absolute bull market. So, there have been so many instances in history where certain markets have gone into bull markets. In fact, the Zimbabwean stock market I think was in a bull market in October when the entire world was crashing


Shankar Sharma: No, that is a different market.

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