Fed rate hike most likely in 2016. September or December? September hike will put pressure on emerging market equities including India.
— Uday Kotak (@udaykotak) August 28, 2016
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Linkfest: August 29,2016
Some stuff I am reading today morning:
Global interest levels at lowest level in 5000 years (Yahoo)
I-T department to send emails to 2.59L tax payers (ET)
UPI:Moving towards a cashless future (Mint)
How short termism can destroy companies (BL)
Will Rajdeep Sardesai’s anti-Namo stance destroy investor wealth? (RJ)
Random Thoughts on Financial Planning (Prashanth)
The pinch of owning concentrated portfolios (Safir)
Paul Tudor Jones & the nature of the beast (CS)
One Million Market Beaters (Irrelevant Investor)
Deutsche Bank’s $10 Billion Scandal (New Yorker)
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Weekend Mega Linkfest: August 26,2016
Some off beat reads for the weekend:
Why India is the true victor at the Olympics (Theodore Dalrymple)
Bihar’s war on alcohol (HP)
Khursheed,a Kashmiri Jawan,took 8 bullets for India (Quint)
How one tweet led Syrians to Germany (Guardian)
Rare picture of Mahatma Gandhi & Dalai Lama (Twitter)
How this 29 year old built a 180 Crore solar business (YS)
How the European harmonium become synonymous with Indian music? (Scroll)
Why the US President needs a council of Historians (Atlantic)
What drives Great Britain’s medal machine (Spectator)
In Photos:African Slavery in Iran (Guardian)
Research: Being lazy is sign of high intelligence (Independent)
The most exclusive restaurant in America (New Yorker)
Travelogue:Drive to Tawang (TeamBHP)
Mulayam Vs Akhilesh Yadav (Gossip Guru)
Naga girl fights racism with poetry (BI)
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Listen Up ! Low rates are a tax
Goals-based investors with a return target are forced to save MORE, spend less at 0% rates. Low rates are a TAX on the economy, not stimulus
— Downtown Josh Brown (@ReformedBroker) August 26, 2016
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Cut the risk and raise cash
Global liquidity seems to be the reason all these relationships are breaking down. With negative rates pervasive across sovereign markets, this is also changing across asset relationships. The markets seem to no longer be heterogenous, everyone is on the same side and looking at the same central bank put, playing the short-term liquidity. Without heterogeneity in markets, short term liquidity overpowers everything else.
With all these relationships breaking down it is no surprise that many investors are confused, doing badly and very worried. I have very rarely seen so many top quality investors all so bearish, across all asset classes, at the same time. Whether it be Soros, Druckenmiller, Singer or others, most of the people with really good long-term records are asking you to exit the markets entirely.
As is typical, markets will keep us guessing, and test the conviction of the bears. I would not be surprised to see continued market gains globally driven by the liquidity. However, be rest assured, this will end badly, and when it does no-one will have time to react. The prudent thing would be to slowly take risk off the table, knowing that one may hurt returns in the short term, but preserve capital for the inevitable bust. If you are a global investor, the responsible thing to do is cut risk and raise cash, no matter how painful it may be in the short term.
India is in a structural bull market, but will also correct if global markets turn turtle. Any correction in India remains a buying opportunity.-wrote Akash Prakash,Amansa Capital