Friday, August 31, 2012

TO EARN PROFITS, ATTRACT INVESTORS!

Global Investment Guru Jim Rogers, who Co-Founded the Quantum Fund along with George Soros (The Fund Returned 4,200% in ten years, as compared to the S&P 500’s 47% in the same duration), believes that commodities are a strong investment avenue for indian firms, and that the govt. should cooperate to make india inc. more profitable

When the economy gets better after the ongoing recovery mode, commodities will go up. And even if it doesn’t get better, commodities will remain the hot favourite, as governments would press to print more currency and whenever the government has done that in the past, real asset prices tend to go up, be it rice, wheat or natural gas. In the present situation, a credible investment and productive capacity for 25 or 30 years in the commodity field will be excellent whether the economies get better or they don’t. Most of the commodities tend to be fruitful but for the near future that is 2 to 3 years, agriculture will be a golden call.

With the recent mergers and acquisitions (M&As) activity heating up the Indian market, like any other economy, Indians are shelling-out a little extra for the target company. But these M&As are of no sense as they normally destroy value. Forget about making-profits with these deals. If an Indian company can, it should rather invest in the stock market over M&As as there is a lot of liquidity in the Indian market and a huge potential in stocks. So stocks are the right way to go if you want to make profits.

Talking about the comparison between India and China, when returns are considered, the Chinese market will outperform India in the short-term, but with India allowing foreigners to invest in the Indian market, India will be a much better market in comparison to China in the long-term. But considering the manner in which the government behaves and acts on important economic and corporate decisions at present, I am not really sure that the government in India actually means good. But if it does, India is really the place of more interest. Hence, for the time being, China is the preferred destination and Chinese companies would be my desired targets.

Talking about profit-making in the farm & agricultural sector in India, at present, a lot has to change. There has to be definite reforms in different sectors in India to unlock their potential specifically in agriculture, where India can be a leader in the global economy, as India has the soil, weather & location. Unfortunately, the government is ruining agriculture with all kinds of restrictions and despite thousands of Indian farmers committing suicide every year, the government is allowing the restrictions to develop. A farmer in India cannot have more than 5 hectares of land and these Indian farmers can never compete with their counterparts sitting in Australia and America. A farmer in India has the potential to own 10,000 hectares. The Indian government should open up the agricultural sector, so that it becomes much more competitive.


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