CapitalVia Founder In Conversation with American Investor Jim Rogers

Jim Rogers is a marquee investor and financial commentator based in Singapore. He co-founded the Quantum Fund, one of the most successful hedge funds in history. Rogers has been a vocal proponent of commodities and emerging markets, particularly China. He has authored several bestselling books on investing like ‘Investment Biker’, ‘Adventure Capitalist’, ‘Hot Commodities’, ‘A Bull in China', and ‘Street Smarts: Adventures on the Road and in the Market’, and his views on global markets are widely followed. 

In this exclusive interview with Rohit Gadia, CapitalVia’s founder, Rogers shares his bullish outlook on India and discusses potential opportunities in the current market environment.

Here is an edited excerpt of the interview.

Being Bullish on India 🐂 

Jim: For the first time in decades, the Indian central government seems to understand what needs to be done and they're acting on it. From what I have observed in the past, despite changing governments and political parties in power, the Centre had been clueless and invariably ended up making the wrong moves. But now, I'm more optimistic about India than ever before.

RG: Jim, that’s quite a turnaround of optimism for you. What do you think the Centre understands now that they never understood before?

Jim: They understand they need to support businesses and entrepreneurs. After the Berlin Wall fell in 1990, the world opened up, but the Indian government just privatized one bakery, Modern Company, over the next 8 years, despite talking a big game. Now, they seem to grasp the importance of supporting businesses and entrepreneurs with necessary tax changes. If Delhi continues down this path, India could be a great country again - you have the 🧠 brains, ☀️ favourable weather, ⛰️ rich soil, 🚜 agri-tech and all the right resources, you just need to get the bureaucracy and red-tape practices out of the way for entrepreneurs.

And the Modi government is certainly bringing in much-needed reforms. From what I read, the PM has been saying the right things and his re-election looks imminent.

RG: I see you're quite bullish on India now, a big shift from the past. Why haven’t you invested in India yet?

Jim: Honestly, I missed it. I wasn't paying attention and the market was doing well, which I usually avoid. But I've made many mistakes in my life, and I hope to make many more - it means I'm still learning. 🤷 

RG: If Modi's government comes back into power, which sectors would you recommend investing in? 

Jim: It depends on what happens. 💪 India should be a top tourist destination, with sites like the Taj Mahal and Ellora that are simply unbelievable! But India hasn't fully developed its tourism potential. I'd have to see how the market reacts to determine the best opportunities.

RG: Do you see India matching China's 5 to 6-decade growth story?

Jim: India could even surpass China if it stays the course. 🏃‍♂️ China has been hit by the virus and a massive property bubble, while India had its own smaller bubble. You may not have manufacturing capabilities at par with China or Korea but you do have an ocean of incredibly intelligent and resourceful people. 📚️ Teach them and give them incentives to work and open factories. The potential is phenomenal.

RG: That's quite a shift from your views over the past 15-17 years. What's changed?

Jim: I'll admit, I've never been this bullish on India in my life. I owned Indian shares before, but not because I truly believed in it. Now, I see the central government finally means what it says and it would seem they are trying to act on it. You know India better than I do - do you think they mean it this time?

RG: Yes, I believe they do. And I'm quite bullish on India as well. Perhaps, your next book could be titled “A Bull in India” like your 📙 2007 bestseller, “A Bull in China”. India has delivered an impressive performance in all metrics and indicators. We are witnessing rapid growth in most sectors. But, our GDP per capita and quality of life still have a long way to go.

Jim: India did it wrong for so many years under leaders who didn't truly believe in entrepreneurship and success, favouring socialism instead. But, the government finally seems to be keeping promises it made in the 90s! 😁 

Agriculture 🌾 

RG: During your Delhi visit last month, you spoke at length about agriculture. What makes you see great potential in agriculture here?

Jim: Agriculture has been struggling globally for years but I'm starting to see signs of a positive shift in many countries. 🔁 Historically, agriculture tends to go through cycles that can last a long time. An agrarian economy shouldn't have to be told that agriculture is key and 🧑‍🌾 they need to support the farmers, not over-regulate them. If India can capitalize on an upswing in agriculture, it could have a huge overall impact.

FUTURE OF INDIA 🇮🇳 

RG: Unlike your newfound enthusiasm for India, many economists like Raghuram Rajan and George Soros have a more conservative stance. Are we missing something? 😟 One concern is that once Modi is gone, the progress might stall. Even if he gets re-elected for another 5 years, Modi may not want to be active in politics after the third term is over.

So, the important question to ponder over is - What drives the change in India? Is it just Modi, the people OR the policies?

Jim: I'll admit I've never been this optimistic about India before. 🙂 What changed for me was watching Narendra Modi make the right calls, doing what needed to be done, especially in times of crisis. 🪷 I doubt Modi would be saying and doing these things if he didn't have support from his party and the bureaucracy.

Even Indian bureaucrats can learn eventually. When you see how China, Vietnam and others have transformed, I think the people in Delhi too, including Modi, have 🙌 recognized the need for change. If it looks real, sounds real and seems to be real, then it must be so. 🆕 From my experience, when a market starts going up, it usually means something HAS changed.

INVESTING OUTLOOK 💰️

RG: Jim, you haven’t quite missed the bus yet. I see the Sensex hitting another milestone, perhaps 100k!

Jim: It’s just a personal investing principle I follow that prevents me from entering markets at an all-time high. 🤷 I’d rather buy when they are at an all-time low 📉 which is, unfortunately, not India right now. Although, there may be interesting pockets worth exploring, even if the broader market is at all-time highs.

RG: So, which country has your attention right now besides India? Still China?

Jim: Yes, I am looking at China because it's low and will take time to recover. Meanwhile, I am holding US dollars. 💲 When there are big market problems, people tend to flock to the dollar as a safe haven, even though 🇺🇸 it's really the largest debtor nation in history. If there is a major market downturn, the dollar will likely spike, and I'll try to be smart about when to sell.

CURRENCY CONVERTIBILITY 💱

RG: So you're holding a significant amount in U.S. dollars as well? Where do you plan to deploy that capital once the market conditions are more favorable?

Jim: That's a great question. To be honest, I'm not entirely sure yet. If India were to make the rupee fully convertible, that could be an interesting option. 🫤 The lack of currency convertibility is a huge issue. Many major economies have fully convertible currencies. The bureaucracy and regulations still hold things back. If I can invest easily in Canada or Germany, it should be just as simple in India.

For a country aspiring to be a global economic powerhouse, having a non-convertible currency just doesn't make sense ❗️ India desperately needs to address this if they want to truly open up their economy.

Renting vs Owning Property 🏠️ 

RG: With GIFT City we have made some headway into making 💸 foreign investment in India easier. Since you have quite an experience with exposure to several different markets, I’d like to know your take on owning versus renting property in the current environment.

Jim: It depends on the country and individual situation. Buying during a bubble is generally not advisable. 👎️ Given that property prices in Singapore seem to be leveling off or declining, I wouldn't rush to buy there right now, especially with the 60% tax for expats. Normally, when a market starts flattening out, it then tends to decline for a while.

Instead, I might look at opportunities in China, since they have such a massive 🏢 🫧 real estate bubble that has now popped. When big bubbles burst, it can create interesting buying opportunities, though it takes time to play out. Potentially buying in India could be worth exploring as well, rather than Singapore. I try to be flexible and opportunistic when it comes to real estate, looking for the right time and place to potentially own versus rent. The specific market conditions are key in guiding that decision.

Market Downturns and Precious Metals 🥇

RG: The US and Indian equity markets are at all-time highs 🔺 , while commodities are also surging. What do you make of this crazy environment?

Jim: The markets are in a very unusual state due to the sheer amount of easy money and liquidity from money printing. 🤔 People are worried about inflation, so they're piling into equities, commodities, gold - anything seen as a hedge.

RG: Do you think this could all come crashing down together - stocks, commodities, gold? We've never really seen that before. 📉 

Jim: If we see a broader market meltdown of indiscriminate selling, investors could unload their gold and silver positions as well, at least initially. I suspect tangible assets would find a floor more quickly, while equities and financial instruments take longer to stabilize. Of course, I hope I'm wrong and we avoid that scenario entirely. But if it does happen, I'll be watching closely for opportunities, especially in precious metals which could present right entry points.

RG: Got it. Do you see silver as potentially more attractive than 🟡 gold at the moment, given the big divergence in their prices.?

Jim: Absolutely, if I were to make a new precious metals purchase today, I'd be more inclined to go with silver. It's down around 50% from its highs, whereas gold is near all-time highs. 🪙 The relative value proposition seems to favor silver at this point.

New Business Opportunities in India 💼 

RG: Let me ask you one final question. If you were to start one new business in India today, what would it be? Would you get into farming?

Jim: I suppose I would watch closely what the government decides to open up or deregulate next. 👀 They'll likely target an industry that hasn't seen much competition, and where there's pent-up demand. 🎯 Whatever sector the government prioritizes and makes more accessible is where fascinating investment prospects are, even in areas that have been sleepy. 💰️ The key will be to pay attention to those policy shifts and identify emerging opportunities early, before the smart money floods in.

If I had to speculate, I imagine there will be shares right in line for the taking, even if the overall market has already run up.

Of course, the flip side is that if something were to cause the Indian market to pull back, that could present an 🚪 even more attractive entry point for savvy investors like myself. There aren't many major markets in the world that offer that kind of dynamism right now, aside from perhaps China.

RG: Excellent point. I do believe the Indian government is gearing up to open the doors to several industries over the next year or so. It could create some compelling opportunities, even in areas that have historically been overlooked.

Thank you, Jim, this has been an incredibly valuable conversation and I appreciate you taking the time to share your unique perspective. I've always learned a lot from you. You have been my inspiration from my college days. Your passion for India is infectious and I'm excited to see what the future holds for this remarkable country.

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