12/03/10 Mumbai, India – What about investing in India?
“The Sensex seems much too high to us,” we replied. “Then again, there are a lot of companies that are little researched that are cheap…and growing fast.
“What I like about the Indian economy is that it seems to grow no matter what happens. Boom, bust, assassination, tsunami, riot – it doesn’t care.
“And it grows in spite of what the government does. There is some rule of nature, as yet unidentified: all governments do stupid things. But the more mature the government, the more stupid things it does.
“It is probably because mature governments have more money – at least in the rich countries. So, they subsidize everybody. The old. The young. The halt. The lame. The farmers. France even subsidizes the press.
“As the tide of subsidies washes in, the incentive to work hard ebbs away. People become used to getting by without doing very much. They get used to conniving with the feds, rather than engaging in difficult and uncertain businesses.
“You don’t have that problem in India. There is plenty of corruption, but it is limited to the powerful groups that control the legislature and the government. The middle and lower classes do not expect much in the way of handouts; there hasn’t been enough money available.
“So, the economy is still fairly light on its feet. Wages are low. People are getting rich fast. Government tries to stifle progress and make sure wealth gets funneled to cronies and apparatchiks, but the economy is largely out of control. The politicians pass new legislation every day. And the economy grows at night.
“And right now there are too many people earning too much money. They can’t be stopped. They won’t allow government to hold them back. Instead, the regional governments will begin to compete with each other to offer infrastructure and lifestyle improvements. Politicians will get out of the way, for fear they will be booted out of office if they prevent people from getting the wealth they feel is within their grasp.
“India looks good. Maybe not next year. Maybe not the year after. And maybe not the leading companies. But I would like to make an investment in India, go away for twenty years, and see what it was worth when I came back.
“Of course, twenty years from now…I’ll be happy to be able to come back at all.”
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
The Daily Reckoning is your premier source for making sense of the news Washington and Wall Street generate. Each business day, The Daily Reckoning calls on its stable of world-class writers and thinkers to show you how to get ahead.
Start your 100% FREE subscription to The Daily Reckoning today and you’ll get a free research report, “How to Survive the Fall of Social Security.” Simply enter your email address below to get your free report and join over 495,000 worldwide Daily Reckoning subscribers!
We Respect Your Privacy and We will
Never Share or Sell Your Email Address
