Jim Rogers plays the field but India's on his mind

Jim Rogers has come a long way. This poor boy from Alabama is today a legendary investor. With degrees from Yale and Oxford, and a reputation built on Wall Street, the world of investing keeps their ears peeled for his advice. For a guy from a rural village in the US, he sure knew his mind. He knew he did not want to become a lawyer or a doctor or a politician!

He told CNBC-TV18, "I read the Financial Times. I read as much as I could about what was going on in the financial world and in the economic world. I also read about politics, I read about everything. If you are going to be a successful investor, you have to know about the whole world. You can’t just know about the New York Stock Exchange, NYSE, you have to know about the whole world."

He did get a superb education but he says he didn't much learn about the market at Oxford. He recalls, "I didn’t know much about the market when I was at Oxford. I learned that later. All bubbles look the same, whether it is in India, Germany, Australia, Japan or in America - people act the same all over the world, whether during a boom or even in panic."

"As far as I am concerned, an MBA is a waste of time, money and energy. Many people think it is a way to get a job, it may be a way to get a job but it's not going to help you make money. Plenty of MBAs are not successful investors and many people, who have never seen a business school were great investors. So an MBA is very overblown as far as I'm concerned."

He had a unique kind of entry to the world of investing. He wanted to know if getting an MBA would be worthwhile and he was told by an experienced older investor that, if he learnt to short sell soya beans a couple of times, he would learn more, than at any B-school. The older man told him, "I assure you that when the soya beans go against you, you will learn a lot about yourself, the markets and the world."

Today, he's done well for himself. He began to look at countries to invest in and the asset classes that would really pay off in the long run. He explains, "I guess that came from experience - from realizing if a country is going to do better, we should invest in all the stocks in that country. If one thinks, commodity is going to do better, one should invest in all the commodities. If an airline industry is going to do better, probably all airlines are going to do better. It is something I have learned from experience."

"As far as I am concerned, an MBA is a waste of time, money and energy. Many people think it is a way to get a job, it may be a way to get a job but it's not going to help you make money. Plenty of MBAs are not successful investors and many people, who have never seen a business school were great investors. So an MBA is very overblown as far as I'm concerned."

Since he's made a killing on foreign playing fields, these are a few things he recommends that budding global investors should look out for. He elaborates, "I certainly want the currency to be convertible. One needs to make sure that there is a rule of law, make sure that there is liquidity in the stock market. You want a country, which has an improving balance of trade, it doesn’t have to be positive but it has to be up and on the rise. You have to have an economy that is getting better and an understanding that investors are good for a country and are welcome investors."

"There are countries which are obscure and cheap because people don’t know about it and don’t go there. I have invested in many countries that aren’t obscure. Japan is not obscure and I have investments there on the theory, that Japan is going to get a lot better. So, it doesn’t have to be obscure, it has to be cheap and one I think as a market, will get better."

Another guideline is really simple. Find something cheap and secondly, see if change is in the wind. He explains, "One can be a successful investor if you can figure out when something is going to change. If it is for the better, one wants to buy and if it is for the worse, then sell it and sell it short. Right now, I have been buying airlines when the airline industry was not doing well for the last five years. They have lost billions and billions of US dollars."

"In my view, there is change taking place, the airplanes are full now, the fares are going higher. Either the airlines are going to disappear or there is change taking place for the better. I don’t think we are going to take a boat to London anymore! I think we will be flying, so one way or other, the changes coming in is a positive change. Also, other things being equal, I prefer a company that does not have a lot of debt but if I think a change is coming and if it is going to be positive, then I don’t mind a lot of debt. I have bought companies in bankruptcy, and I think they are going to come out of it."

Jim is an experienced player and feels that an MBA degree doesn't prepare you for an investment-oriented career. He's also all too aware of the fact that he's the world’s worst market timer. He admits as much and says, "I am the single worst market time trader in the world. I have to be patient and I have learned that it might take a while for things to work out. That is okay because I have always learned that perhaps it is going to work out if I stay with it. I do worry about that, if a change doesn’t take place, or something derails the change, I would have to change my opinion."

"It is not easy to become a successful investor or get rich. It takes a lot of work. If one is not prepared for that, then one should not be investing. It is that simple. You are better off, putting the money in the bank and earning interest."

He also suggests that potential investors look at certain ratios to understand their purchases well. He advises looking at debt-to-equity and return on equity. This apart, the man has his own quirky ways of doing research. In Jim's case, he does his research in a very hands-on manner - he's famous for making his own spreadsheets - manually. He feels, this is the best way, a rookie could probably learn more in this manner, than in any other way.

He adds, "I don’t use Wall Street research. One has to be suspicious of everybody’s numbers. I am sure at Enron, there were people who didn’t know that there were problems. But if one does the numbers and compares them over a period of time, one will start to see problems showing up. One may not know what the problems are, but one can figure out that something might be wrong."

Earlier, he was sanguine about the Indian stock market but was gung ho about commodities. The bull market in Indian commodities is already on and it may last from 2014 till 2022. These bull markets last a long time because it takes a long time to bring out a new supply and when shortages develop, they go on for a long time.

This is beside the point that he feels that, "Commodities get absolutely no respect, though they are starting to - people are starting to learn how to spell commodities! I bet most of your readers have never bought a commodity (stock) and I bet most of them don’t know anybody who has bought a commodity. People know about stocks and bonds and very few of them know about commodities and care about them."

But today, things have changed. He says, "I am more optimistic about India than I have been anytime in my life. I still have a lot of skepticism. The market is a little bit frothy right now, I am not convinced that India is going to be the next China but India seems to be doing the right things, I know your politicians say the right words. I hope they mean it, but my problem is that I have heard Indian politicians for 15 years, say the right things!"

"In fact, I have sold out on the Indian stock market including the hotels. Though, I think Indian tourism can become one of the great investment sectors in India and in the world. There are other sectors in the Indian economy like agriculture, defence, education and tourism. In my view, India is the single best country in the world to visit from a tourist point of view. You have a combination of man-made and natural sites, food, culture, breadth of languages, of religions and everything else. And you always win the beauty contests!"

Written for www.moneycontrol.com

The secret behind Vedanta's success

After having acquired Balco and listing on the London Stock Exchange and coming out with the second most expensive IPO ever, you would think Anil Agarwal was done. But the chairman of Vedanta Resources, is ambitious and wants to put his company up there - right alongside the top two companies of the world. His being the first among equals.

His journey began in 1986, when his company made a turnover of a million dollars making cables, which is not the most exciting product in the world. He knew that he had to make the most out of it and grow his business to the maximum possible.

So, that is when he decided to take the business abroad. He told CNBC-TV18, "There were two aspects. One was that the metal business is no longer a regional business. All the wealth is in the First World and all the natural resources are in Third World. We took over the first two Australian copper mines about nine years back and it was very difficult but we managed it very well because we need the copper concentrate for our Tuticorin plant."

"In the last 15 years, we are the only company who has done a greenfield and a brownfield, project. We did a large Indian privatisation successfully. We bought a sick company (Balco) and turned it around. We took the company abroad. We took the company to Zambia, where it contributes to 26 per cent of the GDP of the country."

After making such drastic moves, he couldn't afford to take it easy and he was constantly benchmarking his company against other international players. He's borrowed BHP's successful formula, where they go to a Third World country to see the geology and get the funding and equity from the First World.

He agrees, "It was my model and I always thought that India has a tremendous opportunity because of the geology."

He feels that in this age, the theory of 'boundaryless' - a Jack Welch concept of sharing resources, ideas and strategies - works for maximum benefit. This works across a vast organisation but in this case, it could also be about sourcing and making use of the elements that is best for a company's future growth prospects.

Agarwal says, "I did realise that probably if I went to the London market, they understood mining better and I would get better value."

Agarwal's looking to improve his odds by being the lowest cost producer of every business he is in. He explains, "If you look at each of our business, in copper, we are the lower cost producer in India as well as in Zambia. In aluminum, we are also going to be a low cost producer. If you look at Balco, we have created another Nalco. When we took over Balco, it was producing 100,000 tonnes, now it's producing 350,000 tonnes of aluminum."

"Going forward, we will be expanding more because we find that we have the expertise. So we are definitely hungry to acquire more mines in any part of the world and are also looking at some greenfield or brownfield businesses in India."

Managing a global enterprise with different infrastructure levels was a challeging task and India was then, not on anyone's map! But Agarwal can take satisfaction in having done just that. He's put India on the global mining map and also made itself known to the international financial world in London and New York.

His second priority is shareholder value. He elaborates, "We are very conscious about our shareholder value. When we listed on the LSE, people realized the shareholder value and then they found out that we were basically an Indian company who were giving them better multiples."

He believes his team is a bunch of motivated people with risk-taking ability and a lot of credibility. He has put in a de-centralised management model in place. All his businesses are run by independent CEOs with the best people working in these divisions. Agarwal wanted the world to take Vedanta Resources seriously and he's hired the best to get the recognition he deserves.

He brought Brian Gilbertson, who was CEO of BHP Billiton on board as the non-executive director and chairman because he states, 'those are the people who will not come to you until and unless they believe that your product is right and you are right.' With Gilbertson having propelled Vedanta Resources into the limelight with the $876 million IPO, he has stepped down to make way for Michael Fowle.

But Agarwal concludes, "Vedanta has definitely shown to the world how cost can come down. When we took over Balco and when we took over Hindustan Zinc, the cost was $1100 a tonne. We brought it down to around $500 a tonne. We increased production from 100,000 tonnes to 400,000 tonnes."

He is conscious of his company's responsibilities towards the community and the environment they mine in. Keeping corporate governance on par with making profits, any new development including extensions to existing abstraction or operating licences undergoes an impact assessment, which includes a review of environmental and social impacts.

Opening new mines entails liaison with the elected local community representative. Compensation is given for any loss of land and this includes the provision of replacement land for relocated families and the opportunity for employment with the group for a member of each family who has been adversely impacted.

Agrawal's company also looks at building of infrastructure such as roads, making provision for water and healthcare facilities, wherever they operate. Apart from this, remediation measures are taken by businesses when mines shut down for good. This includes back filling and replanting, wherever it is required.

Written for www.moneycontrol.com

A bath that's refreshing & pricey!

Cutting edge technology has now entered the boring bathroom. For most, it's just an enclosed space to take a bath but the romantic and the rich are adding a whole new dimension to this room.

People are putting in a spa, jacuzzi and just about everything that would help them de-stress, after a hard day at work and especially after the tedious commuting. And there are a lot of manufacturers out there, trying to wriggle into people's homes. Hansgrohe is one such high-end brand. Their shower cubicle is worth checking out. This is a multisystem shower with about 15 torrents, which makes up the medicated steam bath concept. This includes body showers, neck massagers, steam and chromo therapy, the Scottish shower and aromatherapy, as well as a foot massager and a built-in FM radio, or a CD player that attaches itself to your speakerphone.



All this doesn't come cheap and costs as much as a brand new, small car. This shower system is priced at Rs 4.75 lakhs. Or, if you rather prefer to soak luxuriously, then the freestanding tub is what you'll need. Being freestanding, it means you can carry it into your living room and soak in front of your television and enjoy watching Baywatch or Psycho! A copper tub could set you back by Rs 1.2 lakhs.

But the ultimate, seductive device is a German jacuzzi, which hits you with 100 jets at a go and propels bubbles into the tub. All this to make bathing a very enjoyable affair! This is priced at Rs 95,000.

All this is for one aspect of cleanliness, what about if you want to sit on a top-of-the-scale loo and crow about it to the whole world? Well for such people, Keramag's new range of sanitaryware and accessories called the F1 series should do the trick. Porsche, yes the premier car brand, has designed a range of commodes, washbasins, bidets, bathtubs, furniture and unique original ceramic shelving.



The range distinguishes itself, especially through its natural line management. Bell-shaped washbasins symbolizes the "presentation" of water and this is all for a mere Rs 66,000. A floor mounted WC comes at a price of Rs 1.18 lakhs and a bathtub, that can be ordered from Germany, comes for a whopping price of Rs 9 lakhs.

Well, if you have that kind of money, then you may have a Porsche - the car - in your garage anyway!

Written for www.moneycontrol.com

Evocative first impressions

Bhavna Jasra was five months pregnant with her daughter Tia, when her husband inadvertently gave her another gift - the gift of a hobby that became a lucrative and creative profession. He took her on a holiday to London and that's where she got smitten - by a pair of tiny feet.

Though Bhavna wasn't on the look out for a business opportunity, but the two little mounted feet at a friend's home in London, had her hooked. She forced her friend to take her to the studio, where she had got the impressions made. There she got the typical English stiff upperlip behaviour - they gave her some brochures to look at and told her to come back, when her baby was born.

But Bhavna wanted to know more and she persevered. She waited in the studio for five whole days, to the point where Mrs Ferguson almost called the cops because she thought Bhavna was a stalker! But on the sixth day, Bhavna was invited in for a precisely five-minute audience with the lady, who made these impressions.

Mrs Ferguson soon allowed Bhavna to use her art, after she charged her a stiff fee for the franchise - enough as Bhavna says to "buy a house in London." So, after first getting her daughter's impressions made, very soon the marketing consultant in her took over. She says that the franchise fee was high, but she has more than made up for the initial investment. On the first day, she made over 150 impressions of newborns.

Today, she can demand her price and get it because she offers that kind of quality. Her impressions can come in diverse finishes, such as gold, silver, copper, bronze and pearl finish. Also the dimensions of the limbs matter as well as the frame, that it is mounted into. So she offers a choice of frames, like wood, wrought iron, one-piece glass bubble frames, (which is when the impressions are enclosed in a glass bubble and the only way to get them out is to break the glass). So keeping all this in mind - her price can begin at Rs 15,000 and go up to a couple of lakhs.

She's done so many celebrity impressions but she finds Bal Thackeray's the most fascinating one because as she puts it, she has always been a Mumbai girl and there's never a day, when he hasn't made news. She recalls that when she held his hands and immersed them in clay, her own hands were quite cold and he had wittily remarked to calm her down a bit, that "few have held the tiger by his paws!" She also cherishes the memory of doing impressions of Sanjay Leela Bhansali and his mother's hands.

Acclaimed filmmaker, Sanjay Leela Bhansali told CNBC-TV18, "When I see this (impressions of his mother's hands), it's all there - the lines that have come out on her hands, all that she's lived through is all there. It's primarily less of my hand and I think it is a wonderful gift that she's given to us."

Today, Bhavna is also a marketing consultant to some companies like Citibank and ICICI Bank. With no degree in marketing, she says it comes naturally to her because she could even sell a product in her sleep. While Bhavna is very satisfied with both her marketing assignments and First Impression, it's never done at the cost of time with the family.

Written for www.moneycontrol.com

The US might make a martyr of Saddam Hussein

Saddam Hussein has been demonised quite a bit by the media and he does deserve it, to a fair extent. But when his trial has been such a travesty of justice, does he now deserve the death sentence? Wouldn't life imprisonment have been better, especially since the Americans have hardly got Iraq under control to begin with and their former president's death at the hands of an occupying power could so easily set the country up in flames?

Financial Times, South Asia correspondent, Jo Johnson told CNBC-TV18, "I think the verdict may be just but the sentence is wrong and a big political mistake. No one disputes that Saddam was guilty of many of the crimes for which he was tried. I think the political mistake is that countries which are behind trying him are seeking to impose the death sentence on him."

"For eg. Britain opposes the death penalty at home and normally wouldn't extradite people to countries which have the death penalty - it does seem to be extraordinary that our foreign secretary seems to be endorsing the death penalty. Britain seems to be caught in a complete political quagmire of its own making. A life imprisonment would have been much more consistent with Britain's stand on the death sentence."

But Strategic Affairs editor from Indian Express, C Rajamohan feels that to expect amnesty is futile because "we are talking about the consequences of war and it is not the first time or the last time, when victors have delivered justice. Given the conditions that exist in Iraq today, and in the broader context of the Middle East - the point is that a dictator pays for his sins and it's a reasonable outcome out there."

"You can keep questioning the process but it won't take us very far because he (Saddam Hussein) is a divisive figure in Iraq. If the Sunnis or the Iranians had got their hands on him, they would have handed out their own justice. So, we've got to see this in the right perspective rather than be troubled by whether the highest level of western jurisprudence will be applied."

National Public radio, South Asia, Philip Reeves disagrees and explains, "I feel the issue here is the moral authority of the people who are now running Iraq, be it the US or the Iraqi government. I think the task they have is to recover some moral authority, which they have lost over the last three years. And by applying the death penalty, they are missing the opportunity to show that they could have handled this differently, that they could have given him a life imprisonment and dealt with all his crimes and given the Iraqi people time for reconciliation."

Chief correspondent, South Asia, Al Arabiya, Walel Awwad feels that this sentence has made any ordinary American a target, anywhere in the world. He says, "I think counterproductive measures have been carried out by the Americam administration." But Reeves says that this would give rise to even more anger among the Sunnis and Saddam Hussien could become a martyr if executed.

Also there is the timing of the verdict. It's come just in time - right before the November elections in the US, and no one is surprised because it seemed like a foregone conclusion - that the judgment was delivered just in time to boost President George Bush's rating at the hustings.

So now, America seems to be caught between the devil and the deep blue sea and with no face-saving measure in sight to retreat with any amount of grace.

Written for www.moneycontrol.com