Jim Rogers Nervous About His India Stocks and Modi Promises

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Jim Rogers India Stock Market

Jim Rogers no longers believes Mody is serious about reforms and might sell his Indian stocks.

Just 3 months ago, the street smarts analyst and investor, Jim Rogers lauded the Indian Central Bank for its decision to cut rates. It surprised the market by cutting the benchmark repo rate by 0.25% to 7.75%. This was the first rate cut in one and half years. Jim shared with The Economic Times of India:

“The Reserve Bank of India is one of the better-manned central banks in the world. They seem to understand what needs to be done. And they are doing a better job than most. I wish the Reserve Bank of India were running the U.S. Federal Reserve.”

He also shared that he owns Indian stocks even though he is not a big bull in India. But in recent interview with Livemint, Jim said that he is no longer patient and might soon sell his Indian stocks. He is starting to lose faith that Prime Minister Modi will do what he promised and what he knows must be done.

The Modi government has done nothing but talk, Jim Rogers shared

According to Jim Rogers, “cleaning toilets” is wonderful but is not as much as he expected from Modi after his strong campaign to reform India.  “He, Modi campaigned for many months saying he knows how to fix India, but he has done very little.

Jim Rogers also the chairman of Rogers Holdings Ltd, said:

I had bought shares in India—it was one of the few times I’ve done that in my life, and it was because of the new government. So far, the new government has done nothing but talk, and it is a shame because Modi had experience; he said he knew what needs to be done. He campaigned for many months saying he knows how to fix India, but he has done very little. Cleaning toilets is wonderful, but as far as building the economy or changing India goes, he has not done very much. I still own Indian shares, and I wonder if I should continue holding, because, after a year of no action, you begin to wonder if anything is going to happen. One might say he is getting ready to act, but Modi had run a provincial government for a long time and he knows what to do. So what is all this talk about? I am getting disillusioned about India, but I’ve not acted yet.

This is an important comment because it reconfirms our theory that if one wants to buy stocks, the best time is before elections. This is the time of hope for a change. Of course only if these hopes come true and reforms are made, one should stick to the stock market of the country. It seems India is the usual example when only the talk was big but not the actions.

According to the great macro analysis CLSA, the Modi government overrated its ability to revive the Indian economy.

Jim Rogers might even sell India short

He said that:

But Modi has a very large majority, he has experience, he has the contacts, and if anybody could do something, it has to be him. If he can’t do it, then I don’t want to remain invested in India. If he can’t save India, no one else can. So I would want to sell.

A year ago, Jim said that what will make him long-term bull on India will be if they make the currency convertible and easy for foreigners to use. Its still illegal for foreigners to easily invest there. If India wants to be a great economy power and proud to be a BRICS country, it must reform its financial system as well as address its high inflation, debt and ease of investing. Jim said that bureaucracy must be cut also as its one of the the worst bureaucracy in the world.

Jim Rogers Upcoming Speeches will be:

On Thursday, April 23, 2015 http://lp.forthcapital.com/jim-rogers-global-equity-markets-seminar/, Hong Kong and these at undisclosed yet location, Wednesday, May 6, 2015, Switzerland, May 19, 2015, Korea, May 22 & 23, 2015, China, September 12, 2015, Singapore

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