Transcription
Hi Jim, welcome to the India Opportunity Show. This is round two of our conversation. Last we spoke was in December 2024 where you had some amazing predictions that have actually um come true in many ways. You know you spoke about silver, you spoke about selling a lot of US equities etc. So uh today in today's conversation I first wanted to start with uh where do you stand today? Because of late I've been reading in the news that you've sold all your US holdings, all your Russian holdings and invested heavily in Usbekistan. So, let's start there.
Well, I should watch your show to find out what to do. I don't know what to do. I make many mistakes. At the moment, I own Chinese shares. I own shares in US Pakistan, but I don't own shares anywhere else. I do own gold. I do own silver. And I own a lot of US dollars. And I don't know what to do because the market keeps going up.
That's very kind of you to say, but you know, you've been um sort of pounding the table saying that, you know, this is possibly one of the worst time recessions that we are going to see. You've said it a few every few years, but you know, so far you the US is hitting all-time highs. India today, a lot of my stock portfolio is hitting all-time highs. So, it's very surprising given the geopolitical tension which is going on around uh the stock market doesn't seem to care.
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Well, I certainly love India and you're right, the stock market doesn't care. Everybody's having a good time in India. Hooray. Hooray. Uh I am not invested in India. I'm the one who's wrong so far. So everybody in India is right and I'm wrong.
It's not the first time I've been wrong. I hope it's not the last time. I hope I've lived long enough to be wrong many times.
Well, that's the trait of every good investor to be okay with being proven wrong multiple times. You know, I would love to even talk about silver because, you know, in December 2024 when you spoke about silver on the show, it was around $32. Then since then, it rallied to $120. It that is almost a 300% rally and then you know it trimmed significantly. So were you have you been consistently buying? Are you trimming your positions or are you what part of your allocation is still in silver?
I have not sold any silver. Uh, I not buying now because it's been going up, but I certainly own a lot of silver and if it goes down, I will buy more. I do not plan to sell my silver. My silver is for my children someday.
Wow. So, that's your inheritance that you pass on to your children. But, uh, is that similar is that a similar sentiment towards gold as well?
Well, I've been investing a long time, but you know, silver's been very valuable throughout history. I don't know if you remember Jesus Christ, but Jesus Christ was sold for 30 pieces of silver. That was over 2,000 years ago, you know, even then. And now, silver is extremely valuable. If you go down to the market in India, you will see Indian women everywhere with silver. Um, Indian women have known for centuries that silver is valuable and I have learned also. I own silver. I'm not selling my silver or gold.
So, you still believe there's a significant rally up ahead for both these metals?
Well, I don't I'm not very good at market timing, but I am not selling my silver. If silver goes down, I hope I buy more.
You know, it's um most Indian women actually buy a lot of gold and silver, especially during festivals. I think that ways a lot of Indian housewives have actually outperformed many fund managers that we see across the globe.
Well, I learned if you go to the market in India, you see women buying silver everywhere always. I learned from Indian women. You know Indian women are smart and beautiful and some of them are rich. They own a lot of silver. I am not selling my silver.
And you know you've been bearish on the AI play generally. What is your take now?
Well, I'm not bearish. It's just that I'm not buying. I'm not selling it. I'm not selling short. Uh no, AI has a great future. AI is going to continue to change the world. But many things have come and changed the world in history. Electricity changed the world. Many things, the telephone, automobiles, this has happened before. It's happening again. AI has a great future. AI is going to change everything we know. But I am not smart enough to know what to buy in AI. So I am watching.
But I do know it's going to change everything we know.
Yes. Uh let's talk about the fact that you know companies like Antropic and Open AI are cumulatively getting closer to becoming like almost 1% of GDP in terms of revenue. You know they closed this year at 30 billion. They're fast approaching a hundred billion in terms of revenue. uh you know Jim I can't remember a time where companies grew so quickly and that to to trillions of dollars in terms of valuation what is your take on that.
Well, I can I'm older than you so I can remember you know computers came and changed the world had huge valuations automobiles railroads electricity many things came along and had huge valuations and it's happening again one of the Great things about the world is it's always changing and there are always new things and people who are smart enough and know what to do will make a lot of money. I'm not smart enough. I don't know enough about AI.
You're too humble when you say that. But you know if some young investor wanted to understand from you in terms of how to benefit from this youth change which is happening, right? What would your ad advice be to them?
My advice to everybody is only invest in what you yourself know a lot about. If you know a lot about AI and the companies and the people, then please invest invest, you know, but only invest in what you yourself know a lot about. Don't listen to other people. AI is going to change everything, but only invest if you know what you're doing.
That's true. And you know, reflecting back on your portfolio because you uh bought into Usbekistan and it seems like you were very bullish on the economy there. Uh what is the thesis when you look at a market like that?
Well, Pakistan is a long history. It's been extremely successful country at times in its history. The government there is trying to make Usbekistan more attractive to investors and it's been my experience that when a government in any country tries to make investing more attractive things get better. I have learned to when watch a government and when a smart government a competent government tries to make things better I should invest.
And the same parallel if we apply this framework to the US economy um you know the debt just keeps on rising it's hit it's crossed $39 trillion and interest payments also have crossed 1 trillion which is more than the entire defense budget so how do you de how do you make sense of what's happening there? Is America past the point of no return?
Well, I am an American citizen. My family Americans, but I do not like what I see. America is the largest deter nation in the history of the world and the debt gets higher every day. I do not have investments in the US. I mean, if the US goes down, I hope I buy more, but at the moment, I have nothing there because the debt is very, very high and getting worse. And in Washington, they think don't worry. When Washington says don't worry, I worry.
That's so true. Given the fact that, you know, uh, Doge was assembled to cut down expenses, but it was quickly dismantled. So it hasn't really uh impacted the economy as such right and then you have a government which keeps spending and keep backing different wars in different countries. How does uh we how does the world economy make sense of that?
I do not make sense of it. See you're a smart person. You know what's you can see you can add. You can subtract. You know it does not make sense. I know it does not make sense. But right now there's a lot of easy money in the US. The central bank has been printing a lot of money. When central banks print a lot of money, it has to go somewhere. It often goes into the investment world. And that's what's happening now. Now I know what's happening but I don't like investing in times like that because I know it's not real. I know it cannot last. But at the moment it's lasting and everybody's very happy.
And I'm just watching. That's uh commendable in terms of you know how you think about it because to be able to not buy into the hype as they say because there is a lot of fear of missing out. Uh most of in US equity holders are seeing their portfolios rise right. Absolutely. So then uh you know when you say that you uh want to u enter India at a good valuation or when there's despair on the streets are there any targets you have in mind in terms of you know what the price earnings ratio should look like or what the multiple should be that makes it attractive from your perspective?
Well I do not have a target. I hope that the market will tell me. I hope that we're not seeing everybody in despair in India. I hope when people say never ever buy stock in India again, I hope that I'm smart enough to buy India again.
You've always been bullish on India, but we haven't seen you put any dollars to back that uh bullishness. Why is that?
No, I have invested in India several times in my life. Um, I've been investing in India for long time when when things are right. But right now, everybody's happy. It doesn't matter which country. When everybody's happy and things are going up, I don't like to buy. I like to buy when things are going down and everybody's unhappy. It doesn't matter what country. If everybody's unhappy and things are going down and the government wants things to change, I try to invest. Not just India, many places.
And what do you think of economies? Because you know India is at also everyone keeps talking about how it's at a structural inflection point right like after four 5 trillion dollars the economies tend to grow very rapidly. That happened in the US and China. But Japan uh for example was uh an outlier in the case that you know it's still around 5 trillion. So you know it hasn't really given any meaningful returns in the last 30 years. Do you think which example do you think India will closely mirror over the next 10 20 years?
Well I mean Japan is Japan has had a great year and Japan has been going up. Japan was down for decades. Japan was a bad market for a very long time. Now the stock market has been doing doing well. China, I still own Chinese shares, but China's going straight up now. I haven't sold, but I have to worry. I don't know. I don't know a market anywhere that is depressed and people are very unhappy. If you know a market like that, do not tell. send me a private message.
Sure, I will do that as soon as I get to know. But seems like every economy is uh doing well, especially the emerging markets. If you look at what's happening in Taiwan and Korea, uh a lot of Indian investors are looking to invest internationally and are backing these markets as well. Have you looked at any of these emerging markets closely?
Well, I try to look at everything all the time. I'm lazy. I don't look as closely as I used to. But no I don't as I look around the world I don't see many places where people are unhappy. I mean Pakistan I've invested but that's because you know things are changing and the government is trying to encourage the market but I don't see many places. If you know some place that's depressed, please send me an email. But I don't see many places. I don't see any places right now that people are depressed.
Jim, you've been a.
I mean that's good that's good for the world, but but that's not good for me as an investor. Yeah, you know, that's what my follow on question to that was that you've been around for decades and you've literally spent more than six, seven decades in the stock markets and evaluating these companies etc. What happens when there's so much bullishness around the world? Has there ever been a time where there's just been everyone's happy around the world and how long does that last?
Well, I don't remember. Yes, I know there have been times when there's been exuberance and happiness and bullishness, but this is one of the few times when everywhere everywhere is bullish. Um, you know, enough of history to know that when everybody's bullish, it's a time to worry. Now, I don't know when. I'm not good at market timing, but I do know enough to know that when everybody's bullish, when you should ask questions, you should be worried.
I mean, look out the window. Everybody's happy everywhere in the world. That usually means you should be worried.
So, when when if someone takes this advice seriously, um should they also sell off all the equity holdings and then where where should they invest the money? only gold and silver according to you.
Well, everybody has to decide for themselves. People should not listen to other people. People should decide for themselves.
But when you think about a market like China where you know you were bullish for a long period and now the rally has actually started. What are some of the biggest risks that you see affecting the Chinese economy?
Well, the biggest risk right now is that China's going straight up. Um, everybody's getting excited. I have not to sold my Chinese shares, but I'm worried. The biggest risk is price and excitement. China, the Chinese market in recent days, recent weeks has started going straight up. And that's always a big risk wherever the market. I have not sold China yet, but I see the risk developing.
But you know, like for a portfolio like yours when you have sold off pretty much equities in the US and Russia, why are you still holding on to China?
Well, China is going to be the next great already is the next great country in the world. It's a huge population. They've had periods in their history when they've been very successful and it's happening again. I don't know why China is one of the few countries in the world that's been on top three or four times and it's happening again now. I do not want to buy China now but I have not sold my Chinese shares. And when it comes to you know comparing it with the US because you are a US citizen at the end of the day um do you think there's a changing world order uh where geopolitically things are going to see a dramatic shift especially after this US Iran war which has just happened.
Well things there is dramatic shift taking place in the US. The US is the largest debtor nation in the history of the world. The debt gets bigger every day. It's astonishing to me how much debt Washington is building up. I have read about this in many countries in history. It has always ended badly, but at the moment it's not ending badly. I'm still a US citizen. My family, we're all US. But I can see I can see that this is going to be very bad in a few years. Very bad. You know, a hundred years ago, Britain was the richest, most powerful country in the world. Few decades later, it was bankrupt. Horrible bankrupt. Margaret Thatcher came along to try to save England. She did some good things. But England also discovered the North Sea oil. If you give me the largest oil field in the world, we'll have a very good time. And that's what saved Margaret Thatcher.
Jim, you know, you've been so right about so many of your predictions even since our last conversation. But just to wrap up this conversation, you know, you're I think 83 years old. How do you think of legacy and investing at this point in your life?
Well, who knows? I want I hope I live to 103. But my only what I try to do is for my children is I want them to know about the world. But the main thing I want them to do is to figure out what they love the most and that that's what they should pursue. Most people never pursue what they love the most. They do what their friends or their teachers or their parents tell them. But everybody, the most important thing is to figure out what you you you love the most, then do it. If you want to be a gardener, be a gardener. You'll be successful and happy. And if you're not successful, you don't care. You're happy. Most people in the world are not happy. It's good to be happy.
And thank you so much, Jim. I think you know every time I talk to you we get this decadel long um profound wisdom from you and we get to learn so much. So thank you for being so candid and sharing your advice so sincerely for all of us.
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