Monday, December 28, 2015

Long equities - short gold

Thought for the day
"The formula for achieving a successful relationship is simple: you should treat all disasters as if they were trivialities but never treat a triviality as if it were a disaster."
—Quentin Crisp (English, 1908-1999)
Word for the day
Munificence (n)
Generosity, benevolence
(Source: Dictionary.com)
Malice towards none
Shocked by the PM Modi's Lahore surprise, Indian opposition leaders make demented comments.
First random thought this morning
In past senior political leaders from other States, especially UP, Bihar, Haryana and Tamil Nadu have used much vulgar language than AAP leaders in Delhi.
It would therefore be inappropriate to credit AAP for lowering the level of political discourse.

Long equities - short gold

Over a 10yr timeframe Indian equities have outperformed most financially tradable asset classes, except gold. Apparently gold has outperformed, but adjusted for duty element, gold would also underperformed equities.
The point of interest here is whether over next couple of quarters, this outperformance will continue or we may see commodities or USD outperforming Indian equities.
From the following chart of relative performance it appears that it might be little early to initiate long commodities short equities trade, but a relative trade might still exist in short gold vs long equities.
 
 
 

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