“This boom is not different, it never is”

Jim Rogers, co-founder of the American hedge fund Quantum Fund, that gained more than 4,000 per cent in its first 10 years, says India is no...

Jim Rogers, co-founder of the American hedge fund Quantum Fund, that gained more than 4,000 per cent in its first 10 years, says India is not the only country that’s shining. “Stock markets have been doing well around the world. Does that mean there is Bangladesh Shining? And Pakistan Shining?” he questions. When optimists try to convince him that this time India’s ‘feel-good’ story is riding on strong economic fundamentals, pat comes the reply, “I have invested in over 30 countries in my lifetime. Every time they say ‘this boom is different’. It’s never different”. Rogers is also famous for his travels through 116 countries in three years.

• You have said that when the foreigners come to a market it’s time to leave. Is that your advice to the Indian retail investor? To get out of the market?
Not yet. I just said I would not be buying in India at these levels. I said I was not selling India yet. I pointed out that whenever foreigners arrive in a market, it is getting near the end. I would suspect that later in 2004 or perhaps 2005, it will be time to sell India – at least for a while.

• For those who want to stay invested, and capitalise on the booming market, what is the best strategy for stock selection?
Try to find sectors that are still cheap and/or which have not moved too much. Find things where India has an advantage that might last for several years such as tourism, if your government ever changes its anti-tourist attitude.

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• India has 800 mutual fund schemes, US has 5,000. Fund selection is as difficult as stock selection. How should the individual evaluate different funds?
The manager is the most important factor so scrutinise him/her closely. The sector is another important consideration often.

• What are the three key factors he retail investor should be careful about when he goes to put his savings in the marketplace today?
I have commented on this already and remember India is now seeing the largest number of IPOs in history. That is also a historic sign that a top will be forming within the next year or so.

• During your trip you’ve heard a lot of stories about how India is shining, fundamentals are good and so on. But you are still not investing here. Are you expecting the Indian stock market to crash?

“It may be better to buy in India when the exuberance is less”

Not necessarily. I just said, one, I was not buying India now and two, there may be better times to buy India when there is less exuberance. I also said the ‘shining story’ is a lot of electioneering hype. Things are not nearly as dramatic as the government would like one to believe.

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• Would you suggest gold as a good tool of investment for the common Indian?
Buy commodities themselves or companies which produce commodities or shares in natural resource countries such as Canada. I own some gold and a couple of gold mining shares, but I am more optimistic on other commodities such as sugar, coffee, and orange juice.