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'A lot more has to happen if India wants to be really successful'

Jim Rogers is a legendary top-down global investor; he takes bets on countries. He was George Soros's partner for 10 years and chose to "retire" in 1980 to pursue another career. He wanted to ride on his motorcycle around the world.

Between 1990 and 1992, he traveled the world on a motorcycle to gain firsthand knowledge of the world. He wrote his experiences in Investment Biker, a unique combination of travel, adventure, risk, economics and investing.

Ten years later, he is globetrotting again - in a sports car this time. The Millennium Adventure began on January 1, 1999 and Rogers has already traveled 85 countries and 145,000 km.

As an investor, he has his own style. He likes to enter a country when it is cheap and is doing better than the general perception. He is known to buy stocks in a new country before any other foreign investor. And he shorts a country when everybody's bullish and there is negative change taking place.

Besides managing his own portfolio, he has taught Finance at Columbia Business School and hosted finance shows on television.

The Millennium Adventure is now passing through India and Rogers is on his last lap in Calcutta. He spoke to Investment Editor Niraj Bhatt about his impressions of India.

You are returning to India after 12 years. What, according to you, has changed?

It is pretty clear that India has been opening up enormously since I was here in 1988. You turn on the television and you see many, many choices. You walk down on the streets and you see foreign motorcycles. You didn't see anything like that in 1988. You see foreign products of many kinds that weren't here in 1988. Once they started opening up, it is clear that a lot has happened but it is also clear that a lot more has to happen if it is going to be really successful, say like China or some other countries.

What is your view on the Indian economy and stock markets?

I don't have a view on Indian stocks or currency yet. Right now, I am in India, learning about India so I can't talk about it till I have learnt about India. I will not have a view on India till I finish traveling India. I am formulating my views on India and they will crystallise within a week or so after I have left India.

For the six weeks that I have been in India, I can see great opportunities in India for things like agriculture, tourism or infrastructure. But I don't see anybody capitalising on these opportunities. Just because there are opportunities, that doesn't mean you are going to make any money because if nobody is going to do anything, there is no money to be made. So while I see opportunities, I don't see any action.

I haven't seen any action by your government to encourage it either. In fact, most times your government seems to discourage it. Just because there are opportunities that doesn't mean one would make an investment given that the government's attitude is "we don't care".

As an investor, I don't have to invest in India; there are 200 countries in the world where I can invest and if India's attitude is that we don't care about our economy and society, why should anybody invest here?

What do you think of the Indian tourism industry?

So far, I say the government seems to discourage tourism. There was an article in The Times of India when I was in Delhi that the Chinese have 12 times more income from tourism than India. It is a good question because India has many more tourist attractions than China. The Taj Mahal alone is more than everything they got in China. But your government doesn't encourage tourism.

If you are a foreign tourist and you go to the Taj Mahal, they charge Rs 970; for an Indian, they charge Rs 10. That's okay if that's what India wants to do. I can certainly afford it but if they charge Rs 400, 500 for every sight that you go to, budget travelers can't do it, students can't do it, backpackers can't do it. You don't have that kind of problem in China. That is one example of how your government is discouraging foreign tourists instead of encouraging them.

Indian agriculture…

You look at agriculture and the law in India is that nobody can own more than 18 acres. It's okay if that is what India wants to do, it's none of my business but India could be one of the great agriculture powerhouse of the world. You look at the land and the productivity they have now with no encouragement and suppose if India were to really focus on agriculture, it could put America out of business - America, Australia and Argentina are the great agriculture countries of the world but if you compare India with them and if you really started mechanising and focusing on agriculture... But for some reason, your government doesn't seem to want to. It wants to protect agriculture instead of making it efficient and competitive.

How do you find the infrastructure?

I have now driven several thousand kilometres in India. The last time I went to China in 1990, the infrastructure was not there like in India in 1988. But now if you go to China, there are motorways everywhere, you can travel at 120 km an hour. Come to India and you can barely make an average of 50. Again it is none of my business, but if this is the way India wants to be…

We had planned to go to Bangalore, Chennai and Kerala but the problem is that it takes so long to make any progress here. I thought the infrastructure would be much more developed but since you can only average about 50 km an hour, it takes a long time to drive around such a huge country. So we decided to skip Bangalore and Chennai. I am very disappointed because I was very excited and interested to see it all firsthand.

The global market has changed in the last few years with the dichotomy in the new and old economy. Does your investment strategy change?

My investment strategy has been the same for a few decades. I try to buy cheap, where there is a positive change taking place and I try to sell things that are expensive where there is a negative change taking place. That hasn't changed and I can't see that ever would change. As far as I know, that's how people make money in the investment world. You buy low and sell high. That's the way it has been and will always be.

What about the US market in the last three years?

The US was in a bear market in 1998, 1999 and 2000. If you look at the stocks that went up and the number that went down every year, it was very clearly in a bear market. Some of the averages stayed up because of certain stocks but the great bulk of stocks were going down for those three years. In November 2000, I covered a lot of my shorts, and I have not added to my shorts hence.

Whether we are now in a rally in a bear market or if it's a new bull market, I don't know. I decide that every day as I go along. If it is time to sell, I will sell. If I don't sell for three years, I would have thought it is a bull market and if I sell in three weeks, I guess it will be a rally in a bear market.

How different is traveling in a car versus motorcycle last time?

I have done it on a motorcycle so I figured why don't I do it in a sports car this time. Bikes have fabulous advantages going around the world and so do cars and there are wonderful things to be said for both. I wanted to go in a sports car but you can't go around the world in a sports car; you have to have clearance or you have to fly off the ground or you won't make it through Africa or Siberia and you have to have four-wheel drive. Since nobody makes such a vehicle, I had to make my own. I took a Mercedes G-wagon and a Mercedes SLK sports car and I married the two.

It's great fun in a sports car when you put the top down. It is the only car like it in the world and it attracts a lot of attention everywhere we go.

Photos: www.jimrogers.com

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