India Reminiscences India Reminiscences: India... a Country of Contradictions James Boric gives us some Reminiscences of his and his colleagues' recent visit to India. For the last 10 days, Greg Grillot, Karim Kahemtulla and I trekked all over India. We visited Delhi, Agra, Bangalore and Mumbai (also known as Bombay) -- in search of investment ideas, business contacts and real, on-the-ground insights into this emerging superpower. It didn’t take us long to realize India is a country of contradictions. There are pockets of tremendous wealth surrounded by tear-jerking poverty. There are expensive European cars traveling on gravel roads lined with trash, excrement and rotting carcasses. And there are factory workers who can’t spell their names but are buying stocks on the surging Sensex. I could write for days about everything I saw in India -- and try to explain the contradictions to you. But I won’t. Instead, I will show you firsthand -- via the pictures we took over the last two weeks. You’ll see everything from the Taj Mahal to the poor tent communities... glorious hotels surrounded by 4-by-4 concrete “homes”... and modern malls built next to mom-and-pop food stands. The only difference is you don’t have to take a 16-hour flight and spend $10,000 to see all of this. Here is some of what I saw in India...
In Delhi, most people who can afford to drive drive what are called tuk-tuks (the green and yellow vehicles you see in this picture). These funny-looking three-wheelers run on natural gas and are small enough to zip in and out of traffic -- which in India is a must. Stoplights, double yellow lines and lane markers mean NOTHING in India. It’s every man for himself. Trust me, you haven’t lived until you’ve survived 10 days driving and walking in Delhi traffic. We narrowly avoided death on several occasions... crikey.
You don’t have to go far in Delhi (or anywhere in India) to see a scene like this: modern high-rises surrounded by cows, dogs, chickens and monkeys. Indians believe you can tell a lot about a country based on how the people treat their animals. In India, the animals are treated very well. They can go just about anywhere...
On day two of our trip, we got up at 4:30 in the morning to catch a train to Agra -- home of the Taj Mahal. This is a picture of my buddy Greg Grillot waiting by our train. As you can see, we managed to get tickets for the “air conditioned” car. We were pumped -- until we saw what the AC unit looked like. Check it out in the picture below...
Nothing like eight of nine high-powered fans to keep you cool! YEAH! By the time we got to Agra, we couldn’t wait to see the Taj Mahal -- one of the wonders of the world. This breathtaking white marble structure was built over a span of 22 years by Muslim Emperor Shah Jahan to honor his late wife, Mumtaz Mahal. More than 20,000 workers delicately carved every piece of marble by hand. And when they were finished, it looked like this...
To give you some sort of an idea of just how large the Taj Mahal is, the central dome is 213 feet tall and 58 feet in diameter, and the four minarets are each 162.5 feet tall. I couldn’t imagine anyone building something like this today -- let alone in 1648. Remember, there were no power tools back then. Everything was done by hand. Fast-forward to today... Not much has changed in Agra. Workers still make intricate marble tables, plates, cups and ornaments by hand. Below you can see a few Indian workers carving a marble tabletop -- adorning it with precious stones to attract tourists like me to spend money.
When it is finished, this marble tabletop will go for several thousand dollars -- far more than most Indians make in an entire year. Talk about a contradiction! While India’s GDP is forecasted to grow 8.1% this year, the average salary in India will only be about $500. This disparity of wealth is exactly why most people in Agra live on streets that look like this...
Despite the fact that thousands of tourists come to Agra every year to see the Taj Mahal, the rest of the town is depressing and backward. And I doubt it will ever change. The Indian government banned industrial business of any sort from setting up shop in Agra to protect the Taj from pollution. The result: no jobs, a lot of poverty and scenes like this...
Of course, just when we started to feel depressed about Agra, it was time for lunch. So we got in our car and drove a few miles to the Oberoi Hotel -- once rated the finest hotel in the world.
Amazing view. From our balcony view at the Oberoi we could see the Taj Mahal in the background. And below, a monkey waved to us as we sipped on our Kingfisher beers.
From Agra, we went back to Delhi... and then on to Bangalore. The plan was to spend about a day and a half in Bangalore. But Air Sahara (one of India’s TERRIBLE domestic air carriers) put a wrench in our plans. Thanks to a three-hour delay, we didn’t get into Bangalore until late in the evening. And the only thing we had time to do the next day was take a car tour of the city. Here are a few of the sites we stopped to see...
Bangalore was far and away the most modern city I saw in India. The high-rises, hotels and shops are reminiscent of Europe and North America. But you still didn’t have to go far to see old monuments like this one. The bull you see here is dedicated to Nandi, the Indian god that represents passion and love.
Farther away from downtown, there was one of the most gorgeous botanical gardens I have ever seen.
It cost 5 rupees to get into this botanical park, so there weren’t any beggars or homeless people bothering us while we walked the grounds. But nothing could keep the dogs away -- they loved this quiet place. It made for a great napping area...
From Bangalore, we flew to Mumbai. Once again we used Air Sahara -- arguably the worst air carrier of all time. This time we were delayed by four hours for no apparent reason. We concluded that there were not enough people to fill the plane... so management decided to combine two flights into one. UGH.
As we waited for our flight, Greg and I managed to “rig” the one electrical outlet in the airport so we could both type away... Finally, our flight took off and we arrived in Mumbai -- India’s financial capital. After about an hour-long drive, we made it to our home for the next 72 hours... the Taj Mahal Hotel.
This beautiful building is the Taj. It is right on the Arabian Sea -- only meters away from the famous Gateway of India...
The Gateway of India was built to commemorate the visit of King George V and Queen Mary in 1911 -- during the British rule of India. It was also the site where the last British sailor set sail when India got its independence in 1947.
I bought the postcards for 50 rupees -- or about $1. As India’s economic hub, there were quite a few gorgeous buildings in Mumbai. But like anywhere in India, we didn’t have to go far to see the slums. This was depressing...
Could you imagine what it would be like to live here? I can’t. It’s easy to block this kind of scene from your mind when you invest in an emerging country like India. But make no mistake about it, India has a long way to go before it is fully developed. OK, let’s leave the poverty for a second and travel to Elephanta Island -- 11 kilometers off the coast of Mumbai. Elephanta Island is home to a series of caves that the Indians carved out between the fifth and eighth centuries. In these caves are intricate depictions of Shiva, the Hindu god of destruction. Check it out...
And all over Elephanta Island the monkeys ran wild. This one stole a lady’s cookies and had a feast in the trees...
These little fellars look friendly. But beware... I made the mistake of getting too close to one. It hissed and barked at me. Instead of heeding its warning and backing off, I stood my ground. A second later it lunged at me -- teeth and all. That was all I needed to see... I bolted from that tree faster than an Olympic sprinter on steroids! After we took in the sights of Elephanta Island, we got on a ferryboat and returned to mainland Mumbai. Here’s the view of the city from the Arabian Sea...
That fog you see in this picture really isn’t fog. It’s solid pollution. To help the environment, much of India now requires all buses and tuk-tuks to run on natural gas. We’ll see if it helps... All in all, my trip to India was a great one. Despite the poverty, I saw modern malls, vibrant markets and a healthy middle class. There is no doubt India will continue to grow. But as an investor, you need to know what you are getting into before you lay down your hard-earned money. Right now, the Indian market is very much overvalued. The average stock on the Sensex trades for over 18 times earnings and 4 times book value. That’s at the top of its historic trading range. And I wouldn’t be surprised if a major correction happens soon. Still, there is one area of the Indian market that I would consider investing in right now: construction. Everywhere I visited I saw people building streets, sidewalks and shopping centers. Cement demand was up 14% this past January (versus January 2005). And the construction sector of the market was one of the few laggards last year. As the government starts to invest more and more money in infrastructure (which it MUST), the construction sector will pick up. To help you figure out how to take advantage of this up-and-coming trend, I’ve asked Sala Kannan to find the best vehicle for you to buy. She’s working on it now. And as soon as she has it figured out, I’ll let you know. Until then, I hope you enjoyed your walk through India. Best regards, James Boric P.S. Sala wrote a fantastic India report about three months ago. In it she picked four stocks to take advantage of the surging Indian market. Today, all four stocks are up -- some as much as 60%. Now she is working on the next big idea…Africa. While I was in India, Sala was in Botswana and South Africa meeting with gold companies, diamond producers and high-ranking finance leaders, including the central bank governor of Botswana. As I type, Sala is now writing a new report -- filled with at least four dirt-cheap plays to take advantage of the next great emerging market...AFRICA. While the report is not yet finished, you can secure your copy of Sala’s Africa report by signing up for her Special Reckoning Reports Series. If you sign up, you’ll get a copy of her India report (with all the stock recommendations), plus you’ll get her brand-new Africa report as soon as it is finished. I urge you not to miss this chance to subscribe. http://www.isecureonline.com/Reports/SRR/ESRRG204 |
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