My Best Pick 2013

The long shot

It's time to look beyond Indian shores and invest in US gas stocks, which are quoting cheap

Soumik Kar

Although Indian stocks account for only 2.5% of global market value of equity, Indians tend to concentrate their holdings in India. This “home bias”, where people prefer to invest nearer home than abroad, is a universal phenomenon: Americans prefer US stocks, Europeans concentrate their portfolios in European stocks, Japanese concentrate in Japanese stocks and so on. In unfamiliar situations, the predominant emotion is fear. Foreign stocks are less familiar than Indian stocks, hence the home bias. Currently, Indians can invest abroad to the tune of $200,000 every year, but this bias keeps them away from investing in good value stocks globally. Once you break the bias, several new opportunities open up. I have a firm conviction in the future of the US natural gas sector and the US companies available at attractive valuations.