Why Do Indian-Origin CEOs Outperform Wall Street? | Vantage on Firstpost | 4K

[00:00:00]What if I tell you there's a stock market shortcut hiding in plain sight?

[00:00:04]And no, before you think about insider trading or a billiondoll hedge fund strategy, let me tell you it's not so technical. You don't have to take weekly stock market classes to understand it.

[00:00:15]No more studying the candlesticks or following up with company's return on equity. You just need one simple hack.

[00:00:22]If an American company brings in an Indian-born CEO, buy the stock. It might sound absurd, but I promise you it's not a WhatsApp forward in my family group.

[00:00:33]This theory came from one of Wall Street's most influential investors, Michael Milin. He's not someone who throws words around carelessly. He's one of Wall Street's most powerful figures, a billionaire investor worth over 7 billion. He has shaped American finance for decades. And that's why what he said is gaining momentum.

[00:00:53]This statement was made last year. He said that whenever a US company replaced an American bond CEO with an Indian bond executive, the stocks he's he would buy their stocks. He even added that he was thinking about hiring an Indian bond CEO for his own operations.

[00:01:10]This interview has resurfaced now after someone decided to actually test it. The baradas known as DD is an Indian origin investor and tech entrepreneur. He heard Mulan's theory and thought let's find out if it holds up. Now before we go further here's a quick explanation. So when investors test a strategy they often back test it. So you can think of it like rewinding time. So you take a strategy go back 15 years and ask if I had followed this rule back then what would have been what have happened to my money now? It's a way to check if an idea has legs before betting real money on it. So DD back tested Milin's theory across 15 years market data and here's what the numbers tell us. If you had built a portfolio 15 years ago by buying into companies every time they appointed an Indianborn CEO to replace an Americanb born CEO, $1 would have turned into 58. Now, just for context, if you had invested that same dollar in the S&P 500, which is America's benchmark stock index, it would have earned you $7.7.

[00:02:24]So that's 58 versus $7.7.

[00:02:28]The Indian CEO portfolio delivered annual compounded returns of 30.3%. The S&P 500 14.2%.

[00:02:37]Compounded annual return is how fast your investment grows year after year.

[00:02:44]The higher the number, the faster your wealth multiplies. Think of it like a snowball rolling downhill. The Indian CEO portfolio was rolling much much faster. According to this analysis and these aren't obscure companies, these are names you know most of these companies are or have been headed by executives of Indian origin. Arista networks return nearly 40 times the original investment since 2014. Micron 37 times followed by an energy Mastercard, Alphabet, Microsoft, PaloAlto Networks, Adobe and IBM.

[00:03:22]As of 2022, Indian origin CEOs led 26 companies in the S&P 500, constituting more than 5% of the index and 13% of its total market value.

[00:03:35]When Sundar Pachai took over Google in 2015, Alphabet's market value stood at around $500 billion. Today, that company is worth more than $3 trillion at its peak, making it the world's second most valuable company. Alphabet stock price has risen more than five times driven by growth in artificial intelligence, cloud computing and digital advertising.

[00:04:00]Microsoft under Satya Nadela tripled its stock price within 5 years of him taking over in 2014. The company became the world's most valuable business in 2018.

[00:04:11]Its market value went from $300 billion in 2014 to over $3 trillion.

[00:04:19]Now Adobe under Shantanun Narayan grew its revenue from $3 billion in 2007 to over $21 billion in 2024.

[00:04:28]It's not just the CEOs. Look at Anthropic. The artificial intelligence company behind a claude family of AI models. It has an Indian origin CFO.

[00:04:39]Anthropic earned its first dollar of revenue in 2023. Today it is reportedly on track to hit a run rate of $30 billion.

[00:04:48]That would make it one of the fastest growing software companies in history.

[00:04:52]In business terms, a run rate is just a way to estimate future yearly income based on what a company is earning right now. So let's say a $30 billion run rate means if the company keeps earning like it is today, it would make about $30 billion in one year.

[00:05:10]So DD himself was careful to clarify something important. The data does not prove that Indianb born CEOs caused these results. Of course, correlation is not causation. There may be other factors at play. The industries these leaders work in, the timing of these appointments, the companies they've inherited. And here's what we do know.

[00:05:29]Many Indian origin executives in the US come from engineering and technology backgrounds. They rose through global firms. They navigated different markets, cultures, corporate structures. The software boom of the late 1990s and 2000s created a massive pipeline of Indian engineers in Silicon Valley.

[00:05:48]And that pipeline eventually produced a generation of corporate leaders. Maybe it's the talent, maybe it's the timing, maybe it's both. What we know for certain is this. India's footprint on global business isn't just growing. As per data, it's been one of the most profitable footprints in the world.

[00:06:10]>> The countdown begins to the Trump she summit amid the war in West Asia.

[00:06:17]The world's two largest economies at odds for years. Trillions in trade tangled in tariffs.

[00:06:26]A global power contest over technology and Taiwan.

[00:06:31]The agenda is long. The trust is thin.

[00:06:34]The world will be watching. And what's at stake for India? The news, the nuance, the analysis. We'll bring you all the top updates >> from the Trump Summit from Beijing only here on First Post.

[00:06:47]>> Stay tuned.