“India is the single-biggest opportunity in this crisis – and the only one in my opinion,” my friend Rahul Saraogi wrote yesterday.
India? Who’s thinking about investing in India today? Not many people at all… which is when you should get interested in an investment…
And what makes India different during this global economic crisis?
Rahul knows…[ad#Google Adsense 336×280-IA]Rahul has an Ivy League degree.
He came to America to get a great education, and he intended to stay here in the U.S. and find a job, possibly on Wall Street.
But after school, he felt the opportunities back home in India were far greater than what he saw in the U.S.
So today, he manages an India-focused hedge fund from his home base in India.
I personally invested in Rahul’s hedge fund in late 2008, the last time we saw similar conditions in India. I sold my investment after just over a year invested with him – for a triple-digit profit.
I think that same type of thing could happen again, soon, in India.
Rahul’s case for India starts with the idea that India doesn’t suffer from the same problem the rest of the world does. If anything, India has the opposite problem…
The rest of the world took on too much debt, and it is deleveraging now. In the U.S. and Europe, people are spending less. So there’s no demand for stuff and too much supply.
India has the opposite problem – too much demand and not enough supply.
“India is experiencing a surge in demand driven by demographics and rapid urbanization,” Rahul says. But there’s no supply in India. “Not only is India short on supply, investment growth has come to a complete halt… Indian entrepreneurs are willing to invest… however they have no capital available.”
Rahul cites “poor sentiment” as the main reason capital has dried up. But he says sentiment toward India can change “very quickly.” And “sentiment around the world does not have to improve before sentiment about India improves.”
In short, Indian stocks can run up dramatically, even while Europe does nothing.
In his letter yesterday, Rahul laid out the roadmap to big profits in India…
Once sentiment changes, capital that is unable to find a home anywhere in the world will start gushing into the country. As capital inflows restart, the Indian rupee will start appreciating rapidly. The appreciating rupee combined with weakness is global industrial commodities will reduce inflation in India and will lead to lower interest rates.
He finishes his letter saying: “This is the time to stop overthinking… It is a time to get rid of your worthless dollars, euros and yen and to convert to Indian rupees that are trading at a big discount. It is a time to buy Indian assets that are available at once-in-a-very-long-time cheap prices.”
I think Rahul will turn out to be right. I trust him. We’ve traveled together, and he’s taken me to a few Indian cities showing me specific opportunities. I always enjoy his company and respect his ideas.
I am onboard with Rahul… But I am playing it safer.
In my True Wealth newsletter, we’re waiting for the uptrend in India. We don’t have it yet. But we hope to be buyers in India soon… And if my friend Rahul is right, it could be good for huge profits.
Source: Daily Wealth