New Delhi: Global investor Mark Mobius has endeared himself to the investment community in India for his bullish view on the Indian economy as well as its markets. He was one of the first to talk about continuity in India’s central politics, stating that Prime Minister Narendra Modi looks set for a comeback for Modi 3.0. A votary of PM Modi’s push for digitalisation, Mobius remains an optimist, but that does not mean he views the world from rose-tinted glasses. In his slim book, The Book of Wealth: A Young Investor’s Guide to Wealth and Happiness, Mobius sets about charting the importance of investing by sharing anecdotes from his life as well as those from the lives of other famous investors such as Warren Buffet. Mobius is meticulous while describing the asset classes that are available for investment — from equity to gold, mutual funds to real estate, Mobius has you covered. News9 got in touch with Mobius to talk about his book and dovetail into his life, his plans for the future and his one advice for young Indian investors.
Here’s the edited excerpt of the interview
Mr Mobius, what made you write this book?
This book is aimed at young readers, who are starting out their investment journey. It is advisable to start investing young to start on the journey of wealth creation. This is also an attempt to introduce finance to young readers since there is a paucity of material of finance in primary and secondary education.
In your book you advise readers to invest in equity as the most preferred asset class?
Equity has historically seen better returns than even gold and bonds. It is important to give this asset class the time to grow after entering it at the right time. The power of compounding does it magic. And even if there are setbacks, market crashes, that period hardly lasts more than a year-and-a-half.
How would you advise investors to react to a market correction? After all it can be unnerving for small investors?
If you are already invested in the market, it is important to remain invested even if the market is down. In fact, if you have money to invest, buy the good stocks at a cheaper value. If you are not invested in the stock market, a market correction is a good time to buy stocks and hold on to them till the tide turns.
Mr Mobius, in your book you emphasise personal well being as separate from material well being…
Yes, personal well-being is important. Without it, you will not be able to enjoy your material wealth. The goal is to live a rich life. And without personal well being, without working on yourself and knowing what you want you will not be able to enjoy your wealth. It is important to focus on one’s health and have an optimistic view of life.
How did you weather challenges in your career?
I worked on my learning. I went to college and earned a PhD from MIT. And then I started my career. I work out every day. In life, it is important to focus on what you want. You need to carefully craft your path to success. Today, the younger generation is burdened with so much information that at times it may become challenging to separate what they want from what they see others doing with their lives.
Do you think social media can be a challenge?
I use my phone and the Internet and everything it offers to further my learning. I think the younger generation is aware and smart enough to understand what is a trend and what carries more substance online. Sometimes, social media may distract you from finding what you actually want.
What is your typical routine like?
I start my day early and get on the stationary bike. I read while exercising for 30 minutes. After that, I get ready for work and listen to an audiobook on my way to work. I read my emails and carry out my daily duties. There are a few meetings. I wrap up my day in the evening and spend time with my family.
How do you spend your spare time?
I like to work on myself and I like to read, and workout.
You were upbeat on Modi 3.0. Now that he is back in the saddle what changes do you see in the next 5 years?
[Prime Minister Narendra] Modi has done a good job of digitalising the economy. I hope that continues and there’s more of it. The Indian economy is growing at 7 per cent and this means that investors’ wealth must be above those levels. Modi government can simplify rules for foreign investors to make investments in India.
Why is there a domestic surge in investment in Indian markets? Are Indian markets overvalued?
Indians have more money and they are investing that in the stock market. Indian markets are not overvalued if you look at the price-earnings ratio. However, when you consider other parameters such as return on capital and growth rate, the valuation is affordable.
Will stock markets witness correction? I ask this against the backdrop of Harry Dent’s prediction
When markets go up consistently there is a chance of correction. markets will correct if the rise is led by companies that are not necessarily earning money but are thriving based on certain trends. But it is important to not be bogged down by the correction and stay in if you are invested. It is also advisable to buy in during a correction.
Thematic investing has become popular in India…
Thematic investing can be dangerous since these trends are not necessarily founded on a company’s returns…
Infrastructure and railways stocks have become popular in India…
We are not invested in infrastructure and railways since we do not see these companies giving the required returns. To be sure, Modi has placed an emphasis on growth and as India grows it will need more infrastructure and will need to grow the railways.
Gold and real estate are seeing a surge in India right now…
It is important to diversify your portfolio. My own portfolio has some gold and I own a house. However, these asset classes do not match the returns offered by equity. it is important to buy a home without borrowing much to live in. Beyond that, equity investing is advisable for small investors.
Which sector will you bet on next in India?
Indian companies are known for their IT prowess. They dominate the software landscape. Now, i feel hardware will witness growth with the rise in domestic demand for semiconductors.
Could you share some finance tips for young investors?
My advice to a young professional would be to:
Invest or save 50 per cent of your income
Focus on educating yourself
Avoid fixing a career at an early stage
Don’t be swayed by what others are doing
Know what makes you happy
Global investor Mark Mobius, the founder of Mobius Capital Partners, has seen the highs of the financial world while starting out from humble means. In an interview with News9, he shares his wealth creation mantra for young investors and how he spends his free time. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
