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Words of Wisdom
The Equity Desk Forum :Market Strategies :Words of Wisdom

Topic: When Buffett got behind the curve.

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yogishkamath
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Posted: 04/May/2010 at 11:56pm

Indian companies wipe the floor with Chinese ones when it comes to RoE.

Chinese companies return about 9-10% while Indian companies return about 21% on average.

That is why India keeps growing at 8-9% despite having only a 30% savings rate and relatively low levels of foreign investment while China has a 50% savings rate and massive amounts of foreign investment but still grows only about 1-2% faster.

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LearningToFly
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Posted: 04/May/2010 at 11:29am

Originally posted by yogishkamath

Indian companies wipe the floor with Chinese ones when it comes to RoE.

Chinese companies return about 9-10% while Indian companies return about 21% on average.

That is why India keeps growing at 8-9% despite having only a 30% savings rate and relatively low levels of foreign investment while China has a 50% savings rate and massive amounts of foreign investment but still grows only about 1-2% faster.

Check your data Yogish. If you look at India's growth from 1980-1990, 1990-2000, and 2000 onwards, the rate is 5.5%, 5.8%, and 7.5%. The figure of 8-9% is very recent (may be 2008 onwards).

China maintained dounble digit growth since 1980.

In fact, if you look at Indian growth rate from 1980 to 2006, it is less than 5% CAGR while Chinese growth in the same period has been better than 8%.

Success... at all cost.

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vinvestor2010
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Posted: 05/May/2010 at 2:53pm

Hi pretty interesting article

only if he plans listed company acquisitions it might be interesting

otherwise I would salute him coz whatever is learnt is from his writings but that is about it i guess-

Regarding Indian v/s Chinese companies undoubtedly BSE Top 100 would be far superior to Shanghai Top 100 in Roe & corp governance

however in the next 5 years alone the Chinese will build 44 Bullet Train routes and 13 Underground Metro systems (full Europe has 25 Bullet Train routes I think)

and we are celebrating with 1 Delhi Metro in 10 years

so Chinese firms are far superior in certain areas even though we would like to say that Chinese quality is timepass

as a simple rule companies run by Chinese government / Chinese real estate firms are not good, but some small Chinese companies are phenomenal (check Munger's investment in BYD)

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kohinoorpai
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Joined: 16/Aug/2009
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Posted: 05/May/2010 at 4:32pm

Dear Sir,

At last some harsh truth about people visiting India to fill their pockets but posing to do us a bloody service by thier visits.You see lots of interviews of CEOs stating that their investment in India is proof of their Commitment to india. Bloody jokers come here to make money and talk of comittment to the country. Who do they think they are fooling.When will we Indians get over the White Man Gospel Truth syndrome.
If Buffet was the wise man they claim he is then how come he has no business in the worlds fastest durable economy.
Thanks for your honest views on Buffet the White Man

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ashokpatil
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Posted: 09/May/2010 at 12:55pm

Mr. Ajit jain is the main pillar of Buffets reinsurance business. He has made huge money for buffets company berkshire hathaway. so Buffet calls him a superstar and he is tipped to be heir of Buffet and he is likelly to be next chairman.

Mr jain is of indian origin and he is from IIT Kharkpur. Buffet from long wanted to visit this IIT Karakpur and Mr jains home town. So this trip of buffet may be for that purpose . as Basantji has himself written he need not come here in order to invest here. Buffet is agreat investor having high rate of return for last 40 years. There is no question of staying behind the curve or ahead of it. what matters is your returns

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chimak10
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Joined: 30/Aug/2007
Location: India
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Posted: 09/May/2010 at 2:17pm

RJ has beaten buffets rate of return by very big margin for a very long period too.

RJ is a extraordinary speculator, investor, punter, stock manipulator.

RJ has not used partnership money neither has he used insurance float money. So he was in a same position as we all are.

Then why the hell look out for buffet but ignore RJ i don't understand. As they say in ROME do What ROMANS do.
So in INDIA do What INDIANS DO.

Last but not least if pepole are so much fond of buffet then they shouldn't invest in indian stocks as buffet has not yet invested a single penny here for whatever reason. Pepole can either follow his principal fully or ignore it.

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LearningToFly
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Joined: 22/Feb/2010
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Posted: 09/May/2010 at 6:53pm

Is it so? Can you cite some proof. I am also a big fan of RJ and would love to know the CAGR for a significant number of years. This is not to argue but just to know if there is anyone who has beaten Buffet consistently for a significant number of years (may be 15-20 years)

Originally posted by chimak10

RJ has beaten buffets rate of return by very big margin for a very long period too.

Success... at all cost.

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bihisello
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Joined: 28/Apr/2010
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Posted: 09/May/2010 at 7:01pm

How this argument (WB v/s RJ) will help/educate anyone here?

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