A property bull market, property boom, property bubble — we love it. Stock market, we might own 200 shares, but a boom still makes us relatively richer. The only bubble populations hate is the commodity bubble. Save for, let’s say, the gold bubble, and forget about that. Inflation is only a matter of enriching a few Indians. But broadly, all commodity price inflation is going to hurt you and me. I do believe that there is a natural human barrier to paying higher prices for a commodity. And governments will, by force, by fiat, by any means possible, legally or illegally, ensure that commodity booms are pricked. You can play it as a trade but I don’t belong to the Jim Rogers school to believe that there is a perennial bull market in commodities.
Not even agri commodities?
It has to be pricked, boss. What will you do? Look at sugar, halat kharab hai ekdum (the situation is pretty bad). But then wohi hota hai (that’s what happens). For a while it will run, but then something will happen. Controls. Or people will simply stop consuming. We end up buying more of stocks and real estate when they are running up. But we don’t buy more of tur dal and sugar when they are running up, right? We don’t fill up more petrol because oil prices are rising. We probably think of cutting back here or there.
What do you make of the Obama administration attempts to end proprietary trading by investment banks?
Not just prop trading, he has talked about offshoring also. I don’t think we should underestimate that particular issue even ifthe IT industry may shrug it off. Look, we all thought Wall Street was a holy cow and no US politician would ever do anything that hurts its interests. But this guy Obama is clearly thinking differently. So when he talks about offshoring becoming the new enemy I think we have to take him very seriously because if he can hurt the interest of Wall Street banks, which are a huge interest group in the US and they dominate a lot of a policy-making there, what are half-a-dozen Indian IT companies? We are not there even on the radar by way of any influence. I’d be very concerned. Fine, we can always say six months later that nothing happened. And I’ll be glad because my fear is that if a tax is imposed it clearly becomes a big problem for Indian companies. In India growth has been from the domestic consumption story and the IT boom has driven a very substantial part of it for the last 10-15 years.
What about the Union Budget? Not too much of a case for the market to anticipate much?
Yes I agree. But to be honest with you, I mean again I attach too much rational sense to what the market does. It all depends on what the general events around that day are on the global macro and corporate fronts. We should be slightly careful in ascribing market moves after the Budget to just the Budget. Sometimes the market is just poised to fall and it does. Sometimes it is poised to rally and it does. And the Budget, anyway, I don’t think has much of an effect on the market beyond the first week because I have never seen anyone even remember the Budget or its proposals unless it is something terrible like fringe benefit tax, which is remembered for 5 years.
Do you expect the Budget to take measures on fiscal deficit?
I doubt they will do anything immediately. I don’t think they will roll back whatever they did in December 2008 or January 2009, whenever the so-called stimulus package was brought in. I don’t think it was a stimulus package, but for lack of a better term, we started calling it that. But I just think because the markets are very nervous and on top of that there’s the divestment plan which stretches out all the way into the horizon, I doubt if they will do anything immediately. It will happen at some point. But I don’t think they will upset the applecart just yet.
Divestments will also depend on the market…
Which is why they will not roll back or at least they will not contribute their bit to bringing the market down.
What do you read?
I don’t read newspapers.
We didn’t mean newspapers…
But I do read DNA Money, by the way. And I am not saying this out of politeness. I think this is the only newspaper I read because I think it’s a terrific paper. I really find something useful in it almost every day. But by and large I don’t read newspapers.
What is the last good book you read?
Actually I have stopped reading books on finance also.
Generally speaking. It need not be a book on finance…
Oh. I read a lot. Everything other than finance I read now.
Chetan Bhagat?
I read Five Point Someone many years back when it had just come out.
That was his best book…
Yeah, after that people told me the other ones are not that good. So I thought let’s stop it at the peak, boss. Right now I am engrossed in watching this serial called 24. I am absolutely addicted to that. I keep watching that and that has affected my reading. Crime thrillers are something that I have been reading since I was a kid. And there are a lot of books lately that I have bought. Superfreakonomics I am half way through. The Logic of Life was the last book I read and that was interesting.
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