"We have no
patience with other people's vanity because it is offensive to our own."
—Francois de La Rochefoucauld
(French, 1613-1680)
Word
for the day
Eristic (n)
A person who engages in disputation; controversialist.
Malice
towards none
How relevant are SAARC, NAM
and Commonwealth in the present context?
First random thought this morning
Watched the video of presidential debate between Ms. Clinton and
Mr. Trump. Three observations:
(1) None of the two
candidates appear worthy of becoming head of the most powerful state in the
world.
(2) The degeneration in the
quality of the leadership might be reflective of the general state of American
society itself.
(3) Whosoever wins, it will
not make any difference to my life.
Assumptions for Strategy
Continuing from yesterday (see here), I may share with my readers the latest assumptions
that would, inter alia, drive my investment strategy for next couple of
years; and the key highlights of my investment strategy.
Assumptions
1. The
monetary policy of most developed nations and meaningful emerging markets will
continue to be accommodative till at least 2018; though there is no evidence
available to suggest that BoJ, ECB, BoE, SNB, US Fed, PoBC and RBI etc. will
need to materially tighten their monetary policy even after 2018.
2. US
Fed fund rates may rise quickly and peak in 1.5-1.75% range by end of 2018. The
benchmark treasury yields may have already bottomed and may rise to 2 peak in
.75-3% range.
3. US
GDP growth might peak ~2.5% by end of 2017 and decelerate thereafter as
economic cycle sets in. India & China will continue to grow in 6.5 - 7.5%
range supporting the aggregate growth for Asian region. EU, UK and Japan may
continue to flirt with recession but may muddle through avoiding any major
contraction.
4. Brexit
may actually not materialize by the end of 2018. The uncertainties and delays
might impact the business to some extent.
5. The
global consumption of fossil fuels may continue to underperform the supply.
Prices of the conventional energy may continue to remain around the current
levels, or moderate a little more.
6. Global
demand (both consumption and investment) may not rise materially to cause any
inflation scare. However, inflation could surprise on the upside if currency
& rate adjustments are not managed well and investors move in a herd away
from financial assets and into physical commodities. Precious metals in
particular may remain in favor.
7. Indian
bond yields may bottom around 5.5-5.75% and stabilize close to 6.5%.
8. INR
may move between 65-69/per USD. No devaluation either by China or India.
9. The
capex cycle in India may finally begin between 2H2017 and 1H2018. Demand for
capital goods, industrial credit and EPC services may see material improvement.
10. The consumption demand - especially luxury consumption, credit and
construction material (cement, paint, tiles, sanitary etc.) - to become
stronger. Residential real estate to bottom out and start picking up....to
continue
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