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Hello and welcome to NDTV Profit. You're watching profit insights. I'm Hi Aladya. Joining us on the show today is a veteran investor. He's come up with an interesting book which is called and it in fact it is a young investor's guide to wealth and happiness from here on. It's the book of wealth. Mark Mobius, co-founder Mobius Capital Partners joins us to discuss more.
Mark, good afternoon and welcome to the show and a pleasure to speak to you as always and always a pleasure to read everything that you write about. First, what has been your motivation to come up with the book the book of wealth because you've been writing since quite a few years and the number of books I think I myself have read probably a dozen out of the ones you've written.
Uh what has been your motivation on this one? Well, I wanted to reach out to the young people, you know, people who are graduating from high school or middle school uh and going into college and so forth to write something that will give them some guidance as to how to build their wealth. Uh and of course, one feature of the book is that I talk about health as well because I tell people uh wealth is nothing without health.
So, you got to have both. And I talk about that in the book as well. What has been your best learning whilst writing this book? One from a markets perspective and two from a personal life perspective because I'm sure a lot of exploring that happens as well. Yeah. Well, the key of course is continuous learning.
uh you know even though I've been to university, I have a PhD and so forth, uh it means nothing unless you continue to to learn and to be interested in other things. And one of the reasons why I travel a great deal is because it gives me an opportunity to learn about what's happening in other parts of the world.
So uh I think that is the very I would say the key to being wealthy and also having a good life learning and keeping an open mind right you know you mentioned about travel mark and I think from 1999 to 2012 uh from the number of books that you've written a couple of them you have passport to profit I think you traveled extensively if I'm not mistaken 8 months of travel uh globe trottting is where you went and you actually were able to find the hidden market bargains overseas uh from this book as well any gems that you were able to find and give advice to investors.
Well uh in the book I outline the different ways that you can invest you know in currencies in uh gold in property etc. I give them a a menu of where you can invest. But the conclusion of all this is that equities in other words uh investing in shares and companies is the best because uh companies basically are working for you.
The managements of companies are working for the investor uh to grow their wealth and companies in a diversified portfolio will have a very good return over a long period of time. So uh that is the I think the key to uh having a a very good portfolio good being wealthy. Um of course gold is something that I think everyone should have physical gold but after that I would say it would be your own house in other words a place to live to own your own house and then equities in companies.
Okay. So, you know, when you talk about, you know, what you've mentioned in the book, you've clearly gone ahead and demystified the various financial instruments that probably a young investor can use whilst starting their investment journey. Uh from stocks to bonds, you're talking about alternative assets as well.
uh what would your pecking order be in terms of uh allotting wealth or allotting your funds right now to create wealth? Well, I would say first of all it should be over 50% in equities in companies shares and then uh the rest divided into maybe 10% in gold and then maybe 20% in property and the rest in other investments such as commodities or in in other like platinum I don't know whether you've noticed it recently platium and platinum are very good investments similar the gold.
Uh but that would be the the rough breakdown I would say in terms of someone's portfolio. Okay. Uh let's let's go back to a little bit of history in terms of all the books that you've written. Uh you know specifically I was just going through invest for good as well. I think that was full of a lot of entertaining and informative anecdotes that you gave from your day-to-day experience as well as well in the world of sustainable investments.
Uh from the current one any such anecdote that you would want to highlight? Yes, I think uh the most important anecdote or the most important lesson is that you've got to look at the people behind the companies in which you're investing. In other words, of course, you look at the balance sheet, you look at the profit and loss statement, but the key is who is running this company, who owns this company, and what is their ethical makeup.
In other words, are they going to do well uh by you as an investor, as a minority investor, or are they going to treat the investor badly and maybe make some mistakes and go against the law or do things that would be not at the in the interest of the minority investors. So I always tell people uh look behind the curtain who's running the company who is uh owning the company and get a good understanding.
Just don't look at the uh the financials. Don't look at the financials alone. That's the key. Mark, let's tie this up to all the books that you've written, the knowledge that you're imparting to young investors to what's happening in the current markets right now. uh if you have to look at India as a place where would it be in pecking order because I know you have been absolutely positive in terms of India in fact the last time we spoke as well you did mention you're looking at a new fund where majority of it will be India focused but you were looking at a couple of approvals to come through where are you on it and then we will discuss how to tie both of these together well India of course is number one in my view I want to invest a substantial portion of this new fund in India and of course the reason for that is that India has got so much things going for it first of all young population of 1.2 two billion a government who is digitizing and trying to raise the standards in the country a more unified country coming together all these factors are so important and make India really tops in my view and by the way one of the things we look at of course is economic growth if you invest in a country like India which is growing at six or 7% uh you will know that the companies in that country in India for example would be growing at double that rate.
That's usually the case and you can look at a 7% growth and probably have 14 15% earnings growth in the companies in good companies. So that's what we're looking at. We hope to get approval to invest in India within the next month or so and then we can begin to really build the portfolio. Right now we have 50% in cash.
So we're ready and waiting for this opportunity in India. Sitting on a 50% cash for the new fund waiting for that opportunity in India to open up and that's uh really a strong statement coming in there. But Mark if you have to look at Msei India if I'm looking at data from the 7th of April to now you have Msei India index which has underperformed global peers.
Secondly, if you have to look at inflation in India that is at a multi-year low. So if you have to tie this up and the role both of this will play for the markets which will be those pockets where you seeing value. Well first of all if you look at the uh the growth rate as I mentioned it's still very very good.
Some people say be seven, it would be six. But nevertheless, six is triple or at least triple that of the development world. So that's number one. Number two, I believe the Indian rupee will get stronger going forward and that's an important factor that you have to look at. And then thirdly, I believe that at the end of the day, you're going to see more and more global investors coming into India.
As you know um American manufacturers have used um China as their main supply source. That will change more towards India going forward. So there's going to be a lot of direct investments port not only portfolio investments but direct investments in India which is going to be very important going forward.
So taking the new opportunities into consideration and I'm sure I mean there were a couple of stocks we've spoken about earlier as well where Mark is invested in from a vodafone to persistent APL Apollo vari renewables I know there is some portion you mentioned that you have offloaded but majority of it is what you're still holding in India where are the other pockets would you say these are the names where you will probably look at increasing your stake with the new fund or will you look at other names and if So which would they be?
I'm looking at other names and particularly in uh uh computer hardware. I believe that of course India is already very preeminent in software. They're exporting software all over the world. So India is doing very well on the software side. But going forward I believe on the hardware u chips you know semiconductors for example and general hardware for computers and other electronic equipment will be very important in India that's where we want to look more carefully and perhaps invest in some new companies that are involved in that kind of activity.
Mark would these be from the small cap or the midcap space? Probably midcap. Um, we want to have liquidity. Liquidity is very important when you're running a fund as you know. So, we would probably go to the midcap. You know, companies that have uh in US dollar terms 1 million daily turnover or more.
So, you're saying techdriven, hardwaredriven IT companies is what your next bet is for the new fund with India. Apart from this any other sectors that you would be betting big on because the opportunity that comes in uh a lot of people are talking about renewables a lot of people are talking about where consumption will be a booster as well.
Do they fit your portfolio? Of course. Uh with 1.2 uh billion people India consumer market is going to be growing very rapidly already. It's growing rapidly. is going to be growing uh much much more as we go forward as per capita incomes go up which they are so consumer is very very important so we will be looking at uh se that sector as you notice company like Nestle has been doing very very well and I believe there are many other consumer companies that we'll be looking at Mark would you be looking at a consumer company which is focused on rural India or which is focused on urban India where would your bets be probably urban in India because as you know there's mass migration from the rural areas into the urban areas.
So urban consumption is going up faster than rural consumption. Okay. Apart from this you know apart you know let's I I wanted to I know I mean I don't want to really talk about individual stocks but Vodafone IDEA is one company which may has made it to your portfolio. There are three companies in the Indian markets which are in the listed space.
A lot of things happening with regards to Vodafone which I'm sure you're aware about. Uh what would your view be with this company right now? Well, that's a very interesting company but GEO is also very interesting. So all all three of these companies are quite interesting going forward. The question is how fast they will be growing and how much debt they have to take on.
This is something we have to look at carefully but definitely bodafform would be something we would want to look at. It hasn't been doing too well as you can see in the past 12 months but I believe going forward you'll see better performance in vodafone. So Mark, we've actually tied up what you preach in terms of your books to how uh you know young investors should look at from the actual markets.
From all the books that you've published so far, which would be your top three that you would advise uh young investors to read? Well, the one the book of wealth would be number one. Uh number two would be a book I wrote on inflation. It's called the inflation myth and the wonderful world of deflation in which I talk about you know how measures of inflation are very misleading and we have to look very very carefully at the numbers in other words uh the inflation may not be as much as we believe uh one of the things that's very important to remember is that technology has driven down the costs of many many things uh you know I remember when I was doing my thesis many years ago at MIT.
I was typing on a select electric typewriter. No spell check, no copies, no grammar check, etc., etc. And nowadays, you can do that at half the time, maybe one-third the time. So, these are the u the advances in technology that have driven down the cost of so many things. So uh that's one of the things I point out in the book uh the inflation myth.
It is a myth. There is no inflation. There is actually deflation in terms of value what you're getting for your money. Mark very lastly we would like to thank you for joining us on the show. But when is your next visit to India where we could then see you with us in our studios. When are you going gloating to get your next big opportunity?
Well, I hope to be in India in September. Uh, I first have to go to Japan and Taiwan and Singapore and then we'll go to India. Perfect. So, September is when we meet Mark Mobius in person back in India. Thank you so much for joining us and see you soon uh Mark for talking to us with regards to the books that you've written and the kind of opportunities you're tying uh for young investors with what's happening in the markets.
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