The Indian Stocks

In a Fortune magazine article on the Economy and the World (Fortune, Jan 12, 2004), Peter Drucker is highly complimentary of India (and not so for China). There is, I believe, a good case for a rapidly growing economy in India for years ahead, but less so for stocks. At this point I'll take a wait ‘n see approach before adding Indian stocks to my global portfolio.

Here are some quotes from the eminent Mr. Drucker in the January 2004 Fortune article: "The dominance of the U.S. [over the world economy] is already over. What is emerging is a world economy of blocs represented by NAFTA, the European Union, ASEAN. There's no one center in this world economy. India is becoming a powerhouse very fast. The medical school in New Delhi is now perhaps the best in the world. And the technical graduates of the Institute of Technology in Bangalore are as good as any in the world. Also, India has 150 million people for whom English is their main language. So India is indeed becoming a knowledge center..."

"In contrast, the greatest weakness of China is its incredibly small proportion of educated people... the likelihood of the absorption of rural workers into the cities without upheaval seems very dubious. You don't have that problem in India because they have already done an amazing job of absorbing excess rural population into the cities".

Whether or not you still think the highly acclaimed 95-year old management guru Mr Drucker still has his wits about him (HarperCollins recently released yet another of his books), I don't think you can argue that there will be more jobs outsourcing from America to India as well as an increasing number of Indian companies listing on U.S. exchanges. The latter in particular is something I'd like to see.

There are a number of India mutual funds, including a good one by Templeton, but the funds, like the stocks, are volatile because that is the nature of the usually grossly over-hyped India market.

Here is a list of 10 U.S.-listed stocks from India you might also consider. I would insert the ticker symbols into the portfolio program at www.cbs.marketwatch.com to get a quick detailed study of them all before further discussion.

RDY HDB IBN INFY MTE REDF SAY SIFY VSL WIT

For a detailed look into individual stocks that trade on Indian exchanges like Bombay as well as U.S.-listed ADR's from India, I recommend you have a look at JP Morgan's www.adr.com web site.

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