Marcellus: A Cynic’s Guide to Reading Indian Newspapers

OVERVIEW

Published on: 25 Jan, 2019

80% of the content in Indian newspapers is irrelevant for investors; the other 20% is very useful. The latter 20% focuses on: (a) the actions (not words) of Indian promoters and politicians; and (b) narratives about the majority of Indians whose lives are less comfortable than ours. Furthermore, these narratives suggest that not only are Indian politicians less relevant than potrayed by the media, their impact on the lives of ordinary Indians is often less malign than many imagine it to be.

“You do not have to read newspapers for UPSC Prep for the sake of it. You have to read it in a mission mode! Avoid anything on Politics, Sports, Entertainment. Avoid making notes in the first reading – you are likely to find everything important and create a parallel newspress of your own! Remember that newspapers are written with a very specific formula: the who, what, when, where, why, and how always come first. As an IAS Aspirant, you are required to focus on the underlying theme or issue rather than specific newsbytes..” – From ‘3 Key Points on How to Read Newspapers for Indian Administrative Services Prep’ (Source: https://www.civilsdaily.com/how-to-read-newspapers-for-upsc/)

Most people under 40 who have a job no longer seem to read newspapers; basically, only people who grew up before the mid-1990s read newspapers. As a result at Marcellus only the forty-something people read newspapers. Leaving aside age, another reason very few of our colleagues read newspapers is that 80% of the content in Indian newspapers has little relevance for investors. Even those of us who read newspapers find that most Indian newspapers can be read cover to cover in less than ten minutes. There are three notable exceptions to this which are discussed below. Before we get to those glorious exceptions, it is worth highlighting why one can skim most of the content which appears in Indian newspapers.

One can safely discount what politicians and promoters are saying – most of what they say they don’t actually mean. So when a promoter says that “I am committed to investing in the India story” it does not mean very much and certainly does not mean that he’s actually getting reading to commit capital expenditure. This also applies when the promoter says negative things such as “I am increasingly worried about the rising level of regulatory intervention in India.” Such discounts can also be applied to what politicians (of all shades) are saying. Most people who are promoters, CEOs or politicians rarely say what they mean and they certainly don’t mean what they say. That means you can skip 50% of the printed matter in Indian newspapers.

Next – unless you are interested in restaurants, electronic gadgets, film stars, holiday destinations, Virat Kohli’s latest century and yoga tips – you can skip another 20% of a typical Indian newspaper.

Then come the Op-ed columns which with very rare exceptions contains views from sundry members of the Indian elite. These are typically upper crust people with elite education and/or a career in upper echelons of either the Indian civil service or a well known company. They are more clued into what is happening in London or New York than in Dhanbad or Dhanaulti. Often they reside full time in London or New York whereas it is highly unlikely that they will ever visit Dhanbad or Dhanaulti. Their default world view is that India is going from bad to worse thanks to greed & corruption. If you read too many op-eds in Indian newspapers you will be convinced that the country should have fallen apart five days after the British left the natives to their own devices.

That brings us to the final 20% of the Indian paper which is worth focusing on, namely:

- 1. What are politicians doing? Who are they meeting – at home and abroad – and where are they spending their time? If a prominent national politician goes to a state capital to meet a regional politician then he’s sending a far more important message than a speech or a press statement. If a regional politician meets another regional counterpart then that is a more eloquent statement than any loan waiver announcement will ever be. If a politician repeatedly allows himself to be photographed at places of worship and/or with clergymen then that is more revealing than a speech in the Union Budget. If a minister’s wife’s name shows up on the shareholder register of a company then that is a more powerful statement than any policy announcement. Actions speak deafeningly louder than the words uttered by Indian politicians (which are often meaningless and sometimes incoherent). For both politicians and promoters, we tend to pay more attention to their actions rather than their spoken words because “nothing ever happens in India for no good reason”.
- 2. What are promoters doing? Are they selling or pledging their assets or shares in the companies they own? Or are they acquiring? IF they are selling it is worth trying to understand why they are selling? If they are buying – even if it is a mansion for their personal use or a stake in a start-up – that is a more useful bull signal than any amount of blather in a quarterly earnings call. Actions speak much louder than words for promoters and the Indian newspapers do a good job of reporting what promoters (and their SPVs) are up to.
- 3. Narratives from the bottom are far more revealing and far more useful than narratives regarding the urban elite’s struggle with traffic jams, air pollution and university places. Here are three examples of telling narratives in Indian newspapers about the people who make up 80% of India’s population:

In mid-January the Business Standard published a story on how climate change is impacting fishermen in the fishing town Kakdwip in West Bengal: “In the last six months, 37 fishermen have lost their lives while fishing in the Bay of Bengal. In the last ten years, the death toll from fishing stands at 165. Most of the deaths took place in August and September…the intensity of storms in the Bay of Bengal has risen significantly over the years…‘Over the past decade, we have witnessed increasing number of serious cyclones in the Bay of Bengal. Normally, it is seen that after a storm makes landfall, its intensity falls. But over time, we have witnessed that that this intensity is not slowing. The overall size of the cyclone has also increased. As oceans become warmer, they conserve more energy to sustain a cyclone’ says Prasad Kumar Bhaskaran, head of Ocean Engineering and Naval Architecture at IIT Kanpur.…Last year…by the time weather alerts reached the fishermen, they were already in the midst of the storm in the sea. The rescue boats could reach the site only after almost 36 years past the mishap…fisherman in West Bengal were dependent upon weather prediction forecasts from Bangladesh until last year, as weather forecasts from India came very late.” (Source: (https://www.business-standard.com/article/current-affairs/unpredictable-weather-dwindling-catch-drive-fishermen-into-choppy-waters-119011200720_1.html)
The elite’s narrative on Chhattisgarh is that it is a Naxalite infested place where progress is patchy. In reality, not only has Chhattisgarh been one of India’s fastest growing states in the past five years, it’s hinterland is also beginning to recover. This Indian Express story from a year ago captures the spirit of the renaissance: “Nearly every district headquarters in Chhattisgarh has a “mini-stadium”, used for cricket and football. In May last year, the administration of Bijapur, among the districts worst affected by left-wing violence in the country, decided to build in one such mini-stadium the Bijapur Sports Academy. Eight months later, it has over 240 students, training in 10 sports, under head coaches accredited by the Sports Authority of India (SAI). Of them, 17 have made it to the national level and four have won medals. At the state level, the medals tally of Bijapur Sports Academy trainees stands at 45….” (Source: https://indianexpress.com/article/sports/sport-others/in-the-heart-of-maoist-land-in-chhattisgarh-an-academy-shapes-sports-champions-5042939/
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The Indian labour market is poorly understood not just by the urban elite but also by labour economists. Last week the Mint published a long article containing an outstanding analysis of the Indian labour market: “Migration for work within India is highly circular, with migrants working in multiple destinations during their lifetimes, and retiring in their native places. As per the Economic Survey of India 2016-17, there are over a hundred million migrant workers in India, of which most are circular migrants. The durations can be as short as a day or a week, in which case they are referred to as commuters, numbering in the tens of millions…A few more tens of millions migrate seasonally for work—for a few months of the year, drawn disproportionately from the Scheduled Castes and Tribes and from particular clusters in central India….These migrations are brokered by contractors, often tied with debt, and studies have documented difficult prospects of upward mobility….In a recently published book, India Moving: A History of Migration, I have argued that the great Indian migration wave of semi-permanent, male-dominated, and remittance-based migration is the world’s largest and longest voluntary stream of migration….” (Source: https://www.livemint.com/Politics/8WPPsZygqR7Mu6e3Fgy55N/A-million-migrations-Journeys-in-search-of-jobs.html
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Investment implications
If you consume the output spewed out by India’s many media outlets in a conventional manner you are more likely than not conclude (incorrectly we believe) that the country is heading in the wrong direction. This is because the media consists of people like you and me whose view implicitly references India against the West or with cities like Singapore, London and New York. If on the other hand you read the Indian media selectively with a particular focus on narratives about the 80-90% of Indians whose lives are nowhere as comfortable as ours a very different picture of the country emerges. Whilst life is unrelentingly tough in this other India, the underlying trends seems to be in an upward direction regardless of which political party is ruling the roost. This upward trend seems to hold true even in states perceived as backward, notably, the Hindi speaking belt.

Similarly if you read promoter or CEO-speak in the Indian media, you are likely to conclude that without more reforms the economy cannot move forward; this is the persistent refrain of India Inc and the media has played-up this line for as long as we have been alive. And yet, the same promoters are investing in Indian start-ups, in Indian private equity funds and (still) buying upscale residences for themselves in Mumbai or in the countryside. The politicians through their family offices are also making similar investments albeit a little bit more discreetly. Hence it makes sense to ignore much of what these people say and instead focus on their actions.
If you want to read our other published material, please visit https://marcellus.in/pms-investment-blog/

Saurabh Mukherjea is the author of “The Unusual Billionaires” and “Coffee Can Investing: the Low Risk Route to Stupendous Wealth”.

Note: the above material is neither investment research, nor investment advice. Marcellus does not seek payment for or business from this email in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services and as an Investment Advisor.