You may have seen my ‘performance’ on the BBC. I was asked where if, like the recent lottery winner who won £173m, I would put my money. I said, that the best way to give financial advice is to pretend you are giving it to your mother in law – that way you will always be accurate.
So what was my advice? Well, this week the main Woodford fund is wound up. Remember I beat Neil Woodford in a 12 month Financial Times competition to forecast the markets over a decade ago and kept telling people you’re using name recognition (winner:him) to choose not performance (winner:me).
My advice, to keep things simple and short was to say, look if there is a crash, you need cash heavy companies. And my fellow Indians are heading up some of the most cash rich companies. Thankfully, this past week Indra Nooyi took on a Board position at Amazon too!
So I mentioned Amazon, Google, Microsoft, Apple, Mastercard. I could have added Adobe, Cognizant – which has revenues of $16billion. Of course it doesn’t have to be tech, there is Pepsi and Diageo too. And even more regular – Reckett Benckiser, whose CEO Rakesh Kapoor will be on around $100m salary when he retires this year – they’re HQ’d in Slough!
I don’t know if it’s because they’re Indian they pile up cash, or it’s his Indianness that led the share information site Motley Fool to say this about Rakesh, “We’re all used to chief executives bigging up underwhelming results by focusing on the positives and refusing to mention the negatives, so CEO Rakesh Kapoor’s candour is refreshing. “Our like-for-like performance in H1 was +1%, somewhat below our expectations. Hygiene Home delivered another quarter of consistent top line growth but progress in Health in Q2 was disappointing.” “
Maybe these IIT’ians learn lost about making every $ count, getting high return on capital expenditure, hiring carefully, paying not too well, but well enough? Maybe some of the things which in an austere India as they grew up, they learnt some very important business lessons.
One thing is for sure, the corporate world is in love with Indians. There is a gag about this. Head of Microsoft, Mastercard, Pepsi, Google – Indian. Head of JeM, Lashkar-e-Omar, Jaish ul-Adl, Lashkar-Taiba: Pakistani.
That’s a bit harsh. And one shouldn’t be jingoistic and nationalist. But given the Kashmir situation, I see why people make such gags. Given what India and Indians have achieved, the tragedy, as my Pakistani friends tell me, is the huge wasted potential in Pakistan.
Alpesh Patel
