It is utter contempt to even attempt picking holes in anything that Warren Buffett does but I could not resist myself from putting in a few thoughts relating to the great man�s vision for India that Indian will live better � 20 years hence.
First everyone knows that Indians will live better then what they are in 2030. Any attempt to quantify this statement would be boringly repetitive. But Mr. Buffett took about 20 years to predict what Indian would be in 2030. A man of his class and repute should have had his predictions the moment India opened its gates of liberalization in 1991 so here we go, no points for that prediction.
Secondly it is bizarre to see why he needs one year prior notice to be in India He can come through his private jet which he has named �The indefensible�. He can use that and be in this country of snake charmers as it was known a few generations earlier. Well, these days we have charmed the richest men from the Forbes list is a giant step for the Investing community but only a small one for India.
But why does he need to be In India to invest. From all the history he had invested in quite a few companies without being to the point of operation so the India trip is more for the formality then for the analysis.
Indian journalists, brokerages, analysts and research houses should realize that anyone coming to India is doing no favor to us. They are coming here for their returns and the opportunity that India presents. We do not need anyone�s mark of approval to discover ourselves. Indians have already discovered themselves. It is now the turn of the world to discover India.
Now to the question, what stocks will Buffett buy in India? Insurance, Banks, Consumers the list is limited and conceivable but what may be good for Buffett may not be good for the average Indian investor. Why?
Firstly the Warren through his company Berkshire would intend to invest at least US $ 5 billion in India if that investment is to make any (meaningful) difference to his overall returns.
With that kind of a corpus he would look at the top 100 names a few that come to mind are the HDFC twins (after all Deepak Parekh has modeled HDFC on the lines of Berkshire), an operating company that goes into Insurance with an Indian partner. I doubt if he would buy the existing insurance companies because he has his own standards of risk, Indian TV stations are a highly fragmented property and newspapers might just be living on its edge over the next 20 years so that is ruled out, most of the world class consumer companies that exist in India are subsidiaries of their US or European parents so that is not exclusive material either, credit rating agencies less said the better.
Buffett likes buying cheap so it might just happen that he buys absolutely nothing from the secondary market and concentrates on how he can get his operating business going. That helps India in the long run but who cares about the long run these days.
Personally I feel that we should be proud that at least when it came to investing in India Indians were ahead of the man who has been amongst the top 3 in terms of individual wealth. Whether the process of discovery for Indians about their own stock market was by default (regulations prevent them from investing abroad) or by design is inconsequential.
As for Buffett he took longer to invest in India because when he could have bought a company in Israel he could have identified a few outstanding businesses in India but as they say �Better late then never�.
Opportunities are present almost always just that they look as ridiculous in foresight as easy they appear to be in hindsight.
basant ji,
Do we have an equivalent company for coca cola in India so that one can invest in it for life time like WB ?
There are many tata tea and pidilite come to mind off hand
but care must be taken to buy at the right price.
If i am not wrong then Basantji has already provided us with atleast two good and young names in the TED XI portfolio..how they perform, only time will tell..
[QUOTE=rinkumalpani] If i am not wrong then Basantji has already provided us with atleast two good and young names in the TED XI portfolio..how they perform, only time will tell..[/QUOTE] .. am keeping my fingers crossed
And you thought only lesser mortals record impairment losses..
Wonderful insight on recent news of WB trip.
I believe he may pick up the stocks with mass appeal or consumption theme due to our big populace. He would be looking at India because probably relative growth has dried in his hometown.........
regards..
verses
[QUOTE=yogishkamath] India seems very chaotic and unstable to outsiders.
Even Jim Rogers was scared away by the infrastructure (or the lack of it) and the corruption. These goras like order, clarity and predictability. China has it, India doesn't.
It is hard for them to see how a country that seems to be falling apart can possibly keep growing at 9%.
[/QUOTE]
Ya..you are Definitely right. i m agree with u.... Nice Reply.
[QUOTE=LearningToFly]Deepak is right. The problem is we don't allow investment in many sectors. How many sectors (retail, insurance, banking) were open till 2005. All of these sectors have limitations on investment. I think India will have to liberalize more for big investors like WB, Jim Rogers, or CALPERS. [/QUOTE]
Speaking as an outsider, that is the problem all right; however, please consider that India should not necessarily tailor its policies to the benefit of foreign investors. That has been an approach common to developing nations and in my view it is short-sighted. India's economic policies should be for the benefit of the Indian people, and if that's also good for foreign investors, fine, but where it's not, tough crumbs.
Posted on:4/22/2011 5:38:16 AMvijayM
basant ji,
Do we have an equivalent company for coca cola in India so that one can invest in it for life time like WB ?