Warren Buffett in India

Bangalore -- Preferring metal sheets to silicon chips, billionaire investor, Warren Buffett, in his maiden visit to India said he would rather invest in software or chewing gum industries than semiconductor industry.

“I don’t think we have attributed any kind of investment towards semiconductor industry, I don’t understand it all. I think about the software industry or the chewing gum industry, something that I can understand,” he said during his media interaction on 22 March.

After his touchdown in Bangalore airport at 16:30, direct from Seoul, this 80-year-old chairman and chief executive officer of Berkshire Hathaway, was all set to take a barrage of questions from the Indian media at 17:50, with no tangible signs of tiredness at all. Rather, he enthralled the Indian media with his inimitable wit and endless energy and patience answering questions ranging from investment strategies to philanthropy to American and Indian economy, for over an hour.

With about 90 per cent of Berkshire Hathaway’s investments located in the United States, he admitted he was a bit “ retarded” when it came to making investments in India or any other Asian country. “I have always been a stay-at-home fellow for most of my life but now I see more opportunities outside of the US. I have come to India pretty late and hope to spend some money here. Better late than never,” he said

“Sometimes we have misread the future and there are a number of opportunities that I have missed. But if I could get a good idea a year, I feel very good about it,” he added.

He said that India was a dream market for investors. “The market is growing, getting more prosperous by the day, businesses are flourishing and opportunities are many more now," Buffett said.

Commenting about the American economy, he said that the US economy was improving steadily though not a great rate. “It is improving fairly since the summer of 2009 and it’s hard to say what the major factors are. People talk about fiscal policy and that’s important. People talk about monetary policy and that is important too.  But I think the most important factor is the underlying resilience of the American people. There are 309 million Americans thinking about doing something better tomorrow. And all these three factors are all equally important.”

Replying to a question on the perception in the US government and the American on the street, about India, particularly Bangalore, taking away American jobs, he replied, “We have 309 million Americans in the US and some people will feel  anything is a threat whether it is India or China or Japan, you name it. I am an enormous believer in trade and the more trade the world has the better it is over time. Trade is essential for world prosperity.  The more prosperous the rest of the world is, the better it is for the US. The more countries like India and China prosper, the more US will prosper better. There are many people in every country that resist an idea – whether it is the US or any other country in the world. But going by the economic history they will be proved wrong.

When asked about his reaction on the tragedy in Japan or the political upheaval in the Middle East, he said that the tragedy that has happened in Japan was terrible. “One of our clients was also affected but there have been terrible things that have happened in the US too in my lifetime -- for example, the 9/11 and the panic in the fall of 2009. But business goes on. Most economies of the world will march forward all the time and I certainly believe that about the US. My children will live better than I do and my grandchildren would live better than my children. This has been the history….market/ society will keep producing such results. I have no doubt about this. There will also be interruptions from time to time and that is the nature of capitalism and nature of markets. It has happened many times in my lifetime.  The main thing to do is to keep an eye on what is going to happen about five or  20 years ahead,”

While outlining his investment strategy and the sectors that he would concentrate on in India, he said it would the same as in the US. “Businesses where I understand the  future reasonably  well  for the next  5 or 10 or  20 years. It wouldn’t be industries that are changing rapidly because in such industries there would be few successes and many failures and I am not good at predicting which ones would be the successes. So I look for industries relatively modest rate of change and which would be doing well 5 or 10 years from now.

“There are a number of areas/industries that I know are going to do well but I wouldn’t know which companies are going to do well within those businesses. For example, in the US, there were roughly 2000 automobile companies established since 1900. All but a few failed. It wasn’t hard to figure out that automobile industry had a wonderful future but it was hard to figure out which company to buy. That’s the way I feel about many of the industries that are developing. I think the industry that is going to do well is the one that is going to change people’s lives and all of that but I just don’t know where its going to be in terms of companies. I focus on things that I understand,” he explained.

And, the final remark he made was poignant in its simplicity. When asked whether he would like to be remembered as the world’s richest man or the world’s greatest philanthropist or the world’s greatest investor, he replied, “I would like to be remembered as the world’s oldest man,” he said with a laugh which had an underlying tinge  of sadness.