When the bear market comes in the next couple of years, emerging markets including India will go down a lot plus India has been building up a lot of debt, says commodities guru and the Author, Street Smarts:Adventures On the Road And In the Markets.
What do you have to say for those who bought stocks of Tesla? Elon Musk is perhaps the new hero for everyone.
Well if you are in the press, Mr Tesla is one of those smartest people in the world except for Mr Trump. Mr Tesla and Mr Trump are two of the smartest people in the world. I see what has happened to the price of Mr Tesla’s stock. I have seen this before. I do not own it. I have not shorted it. I have no position. It is going to crash when the next bear market comes. I have no idea when or how much higher it might go but I know that stocks like that always come down a great deal in the next bear market. Some of the accounting things that Mr Musk does are questionable. Apparently it is a great car, apparently it is a great technology, but it is not a great stock for me at these prices.
You have young children which means that they have the advantage of time. If you have to advise your children to start an ETF in a country, where there is going to be a structural change, a decade or two decades of big changes, which is would be that one country?
In 2020, it would probably be Russia. Russia is hated right now. There are positive changes taking place, not too much debt, lots of raw materials. I know it is a strange name but to be successful, you have to look for strange countries. For a 12-year-old child, the world will change dramatically. Maybe Russia, maybe Venezuela. Countries that are hated, countries that are cheap that is where you look to find big profits over 20 or 30 years.
India is no longer the darling of global investors in terms of returns and asset allocation. Where does India fit in? Is it in the middle of the road or the end of the road? Where is India in terms of perception and in terms of investment destination?
You know India is one of my favourite countries in the world. I tell people all the time if you can only visit one country in your lifetime it should be India. It is fabulous for many reasons. But I am not an investor in India now. I am not investor in most emerging markets now. When the bear market comes in the next couple of years, emerging markets including India will go down a lot plus India has been building up a lot of debt. I mean this is not as bad as Japan or America or someplace but India has been building debt. I do not like that. Mr Modi says, he has always said he is going to balance the budget but he never does it. India is not on my list at the moment. If it goes down enough, of course it will be on my list.
I want to go back to that question where we talked about a country where you would like to invest for your daughter and for your children. But if you have to gift something to your daughter as just a token of what your thoughts are – will it be a gold brick or will it be a Bitcoin?
A Bitcoin no, no, not be Bitcoin. It would be gold. I certainly want my daughters to own gold and silver. Everybody should own some gold and silver as insurance if nothing else. If you get it right, you will make a lot of money in gold and silver. Money is going to be on the computer, it already is in some countries. But this going to be government money, governments do not like to lose their power, governments do not like to lose their monopoly, governments are going to make it legal to own and use their money in the future just as it always happens. So I do not plan for my children to own cryptocurrencies. I do plan for them to own gold and silver.
Couple of years ago it was Japan followed by US tech stocks, then it was China, then it has been US tech stocks. What would be that trend for next five-seven-ten-twelve, even fifteen years according to you?
The most exciting technology I see is the computer. It is where everything is. Artificial intelligence is one way to look at it. It is where everything is going to be on the computer. Many people are going to lose their jobs in banks because everything is going to be computerised now and when that happens, there is going to be enormous opportunities in some new companies and new technology. I do not have any names. I wish I did. I know Samsung and other companies are doing a lot of research but they are such big companies. The block chain is going to change everything we know. It is going to put a lot of people out of business. But remember, electricity put a lot of people out of business and nobody is going to get rid of electricity. If I could find a major way to play block chain, that is what I would do.
Do you think this is going to be a tough decade for any investor anywhere or should we expect a late single digit returns?
This is not going to be a good decade. The next bear market is going to be the worst in my lifetime. It is not a good time to be a young person, certainly not in America because America has built up staggering amounts of debt. I worry about my children and their lifetime. I worry about all of us including old people like me but I really worry about young people because in five years somebody is going to ask where did all this debt come from? It is going to be staggering and it is not going to be good for a long time for most countries. So I am going to do well but most will not.