What is India and What About Investing in India?

What is India… ?

We don’t know. We prepared for this trip by reading ‘Maximum City’ but it wasn’t enough.

Here we give you impressions… glimpses… the kind of sensory overload you get when you are traveling in India.

Women on the back of motor bikes with rolls of belly fat…  old men with Gandhi-like sheets wrapped around them… concrete, piles of bricks, bamboo scaffolds… smoke, heat and haze so thick you can’t see across the harbor… a man with his hair and beard tinted bright orange… another man with a wild look, like John the Baptist after a drinking binge… shiny glass office towers… body odor… taxis with more horn that horsepower… cute, dirty little girls who stalk you, grab your arm, pester you, following you for blocks… gray, dilapidated tenements with names such as Meadowland Mansion House, with laundry hanging out of windows… .whole families camped around trees and light posts… two boys with neckties taken to school by their father on a motorcycle, one in front, one behind… another man with four children on his bicycle… .traffic so wild and chaotic that even an Italian driver would blanche… high-rise apartment complexes, with balconies advertised – ‘where young professionals can live an unpolluted life’…  “Scared of the Stock Market?” asks a billboard, inviting customers to call the Franklin Templeton funds… Muslim women dressed in black, head to toe… elegant women with light skin in saris… stick figures squatting beside the highway… acres and acres of rusty tin-roofed slums.. “Earn 9% Interest at the Catholic Syrian Bank… minimum deposit R100 (about $2).”

… Bombay is noise, smells, colors… new and old… so much to see you can’t look fast enough… 

… and then… there is the train station! (About which there will be more tomorrow… )

A week ago, Bombay was beset by riots. Buses burned. Cars over-turned. “Watch out,” a friend warned.

“Just like Paris,” we replied.

The malcontents, we learned, were Dalits – a low-caste group that has been largely left behind by the “good times” so many other Indians are enjoying. GDP growth rates are edging up towards 10%. The place seems to be booming. But according to the India Times, only 44% of Dalits have electricity. Only 48% have running water in their homes. “Prosperity is eluding them,” says the paper.

“The upper classes are getting rich, fast,” said one of our contacts. “So the gap between rich and poor is actually widening. We have gained a lot from globalization, but mostly in the IT sector. Not manufacturing. So people who speak English and have college degrees are in demand. But not the poor people you see on the street. There will almost certainly be more trouble.”

The ‘Taj’ is a great hotel. ‘The towels are so fluffy you can barely close your suitcase,’ as Dick Gregory used to say.

But venturing out of the hotel last night, we went to a restaurant on the other side of the peninsula. The place was called Gaylord’s – brightly lit… large… across from the Ambassador Hotel – an extraordinarily ugly building with a revolving restaurant on top.

Gaylord’s was said to be a good restaurant serving Indian as well as Continental food. It sounded like a good bet. But we were surprised to find that we were the only white people in the place. And though the waiter spoke English, it was not a version of English that we were able to understand.

We decided to sample the Indian cuisine, but specified that we would prefer a ‘mild’ Episcopalian level of spiciness. What we got tasted like a prairie fire.

“Try some of our Indian wine,” the waiter suggested. The waiter was an odd-looking fellow. He had died his hair several weeks earlier, so that the grey hair had grown up and was clearly visible as a wide, white streak on the center of his head. He also had one eye that seemed unconnected to the other, so the overall effect was as if you were talking to a cross-eyed skunk.

“Sure,” we replied. “Is it good?”

“Oh yes, sir… our Indian wine is veddy, veddy good.”

What relief French vintners must have felt when they tasted the stuff! It clearly poses no threat to Bordeaux or Bourgogne. The closest thing we recall to the taste of Indian red is a vague memory of what we got when we tried to siphon low-grade diesel fuel out of an old tractor by sucking on a rubber tube.

What about investing in India? “It’s a very good long-term bet,” says a local analyst. “The market took a sharp decline in the spring – down from 12,000 to 8,000 or so. But now it’s back near 14,000. Stocks aren’t cheap – they’re trading at about 22 times trailing earnings. But you have to remember, these are companies that are growing at 20% per year. In terms of forward earnings, prices are pretty reasonable. I can’t tell you that investing now will be a good deal in the months ahead. But I can tell you that investing in India will almost certainly be a good deal in three or four years. ”

“Yes, everyone says that,” said another analyst. “But the truth is the market is very bubbly… I took my own money out of Indian stocks. It’s all in cash now. Yes, maybe the long-term outlook is good. But I don’t know how far out the long-term is. I don’t quite trust it.

“I would say the only thing that is more or less certain is that standards of living in India and the West are converging… but I’m not sure if that will happen by rising standards of living here… or falling standards of living in America.”

“There is definitely a lot going on here,” added a third. “But that doesn’t mean you’ll make any money by buying equities. They’re not cheap. And they tend to run in cycles – boom to bust. Right now, we’re in a boom. Come back when we’re in a bust.”


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