Jim Rogers’ investment strategy is under scanner after his ‘sell’ India call
Singapore-based Jim Rogers, billionaire commodity guru and trader, caught the attention of investors across the world, when in an interview to Mint newspaper he disclosed that he had sold all his stock holdings in India.
Not one to mince words, Mr Rogers blamed the lack of reforms by the Narendra Modi-led government for his decision to quit India.
“I did sell my India shares as I don’t see anything happening. The market was high, and investors had anticipated great things, including me-even if he (Modi) were to do things, the market had already discounted some of that because it had gone up a lot, and there was nothing new coming from Modi. You can’t just invest on hope,” Mr Rogers told Mint.
The renowned hedge fund manager, known to be skeptical about India, said he put his money in domestic equities last year when PM Modi won a massive mandate. India was among the best-performing equity markets last year, but 2015 has been a roller-coaster ride.
After hitting an all-time high in March, the Sensex is now trading at one-year lows amid a global contagion triggered by concerns of a hard-landing in China and a rate hike in the US.
Mr Rogers’ comments strengthen the perception that investors are worried about the slow pace of economic reforms in the country.
Foreign institutional investors sold a record Rs 16,877 crore in Indian shares in August, more than the previous monthly record of Rs 15,347 crore in October 2008. The sales helped push the Nifty down 6.6 per cent in August, its worst monthly performance since November 2011.
Market veteran TS Harihar noted that Jim Rogers may have been “nasty and perhaps unfair” when he said that he saw no hope in Indian markets, but added that the government must take his comments seriously if it wants to attract foreign investment.
“It is easy to dismiss Rogers as an India-skeptic but there is a profound wisdom in some of the points that he has raised. Government needs to understand that private enterprise can thrive if an enabling environment is created, and that can only be done by the government of the day. Jim Rogers, surely has a point!” Mr Harihar said. (Read)
But many other analysts said it’s difficult to understand why Jim Rogers singled out India, when stock markets across the world are in turmoil. They also highlighted how Jim Rogers’s call on a rebound in commodity prices has gone completely wrong.
“His call on the commodity super cycle has gone way off and so has been his preference for autocratic countries like China and Russia vis-a-vis the democratic India. Three years back he professed preference for these countries over India. If he had actually invested in Russia at that time then in dollar terms he would be down 50-60 per cent today,” said fund manager Sandip Sabharwal. (Read)
Analysts also pointed to the roil in stock markets in China, a favourite of Jim Rogers, where share prices have dropped nearly 40 per cent since hitting a high in June. Jim Rogers told Mint that he bought Chinese shares during the two-three days when its market collapsed and he bought even more on serious down days.
“Does anyone even know what Jim Rogers portfolio in India was? If he had bought all the commodity stocks which were more a China play and lost big money then his view is actually a reflection of his position and losses and not of the future,” Mr Sabharwal added.
Singapore-based fund manager Samir Arora tweeted data to prove that China markets had underperformed India over the last 20 years; he asked Jim Rogers to come clean on whether everything is going as per his plans in the world’s second largest economy.
“Anyone seen any interview/comment/tweet recently by Jim Rogers on China and how everything is going as per his plans there?” Mr Arora tweeted.
Since 12/92:MSCI CHN -2.33% p.a. IND 6.7% From 12/99:CHN 6.68% IND 9.29% From12/03:CHN 10.44% IND: 10.77% From 12/12:CHN +0.73% IND +4.51%
— Samir Arora (@Iamsamirarora) September 3, 2015
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