“I had bought shares in India – it was one of the few times I’ve done that in my life, and it was because of the new government” Jim Rogers said in a condescending tone, implying that he held India in contempt so far and regarded Indian stocks as unworthy of investment.
Nilesh mocks the statement by calling it “profound”. Nilesh cleverly refers to Berkshire Hathaway, the gold-standard of investment amongst several foreign investors (and many Indian ones as well), and points out that the Kotak MF has itself given “7 times more returns in dollar terms” than Berkshire Hathaway has over the past 17 years. The Kotak MF has beaten the benchmark index by double the margin of Warren Buffett’s outperformance since its inception, Nilesh adds.
To rub it in, Nilesh emphasizes that the BSE banking index in India has risen 19.45% compounded annually in the past 10 years, a feat unseen in the so-called developed markets.
“India should, in fact, have been part of your core portfolio … You would have made far more money if you were an investor in India rather than a trader” Nilesh says, giving back to Jim Rogers in his own pompous manner.
Jim Rogers’ patronizing tone when referring to Raghuram Rajan, the RBI Governer, (“I am not saying he is great – all central bankers are bad – but, he is certainly the least bad.”) also irks Nilesh Shah. He dismisses the statement as wrong and adds that it is a “comment on our system without understanding the scale”. The number of passengers carried by the Indian Railways in a single day is more than the entire population of Australia, Nilesh says, underlining the vastness and complexity of the Indian economy and the fact that it cannot be evaluated on the same benchmarks as other economies.
Nilesh also takes a swipe at Jim Rogers’ fascination for Gold and commodities. “I have always found it better to invest in golden entrepreneurs” Nilesh says and points out that since the inception of the Sensex in 1979, it has outperformed gold by more than 21 times in dollar terms.
Nilesh also takes Jim Rogers head on for his oft-repeated lament that “no progress is visible” by advising him not to go by the headlines. Nilesh recounts several instances to prove that there is indeed positive change at the ground level and that economic and qualitative parameters have shown significant improvement over the past 12 months.
Rogers’ patronizing advice to India to “get rid of exchange controls and make it easier for foreigners to invest in India” also meets with a severe rebuttal from Nilesh. “Show me one market where the largest bank, mutual fund, telecom company, or consumer staple company is majority owned by foreigners” Nilesh says. He adds that there are no exchange controls for foreigners in India and says that the fact that foreigners have easy access is demonstrated by the fact that foreigners now own more than half of the free float in Indian stocks.
Nilesh Shah delivers the knockout punch by addressing Jim Rogers the way one would address a novice investor who is nervously investing for the first time. “I urge you to consider investing in equity mutual funds as most of us are outperforming the benchmark indices by large margins ….. Don’t go by the headlines …. Do your own analysis …. India is changing with newer and better business models. There will be many winners and a few losers …. Most of the times, it makes sense to listen to all but to choose your own path” Nilesh says in a tone reserved for dimwit investors.
This must have left Jim Rogers cringing with embarrassment.
Now, we have to see whether Jim Rogers scurries off like a dog with its tail between its legs or he comes back with a rebuttal.