Some food for thought
"Dogs are better than human beings because they know but do
not tell."
—Emily Dickinson (American Poet, 1830-1886)
Word for the day
Logogriph (n)
A puzzle in which a certain word, and otherwords formed from any
or all of its letters, must be guessed from indications given in a set of
verses.
First thought this morning
The memory of my phone has been choked by numerous forwards of
Ambani family dance show. I am speechless after watching three odd minutes of
this mega event staged in Udaipur. The event was apparently attended by hundreds
of A list Indian and global celebrities. The scale of the event could be judged
from the fact that some mega Bollywood stars were seen as back dancers in the
dance show.
Incidentally, all the video clips from the event I received in
my inbox were without any comment or any Emoji.
I am not sure if people in contact list love the first business
family of the country so much that they wanted to celebrate their family event
by sharing these clips with everyone they know. But by avoiding any comment or Emoji,
they have complicated the situation for me. I am finding it extremely hard to
decipher the objective this data bombardment on my phone. Is it a joke? Is it a
satire? Is it appreciation of Ambanis' and Piramals' dancing skills? Is it
celebration? Is it protest? Is it regret? Is it hostility? Or is it just the
"breaking news syndrome" that makes people automatically forward
whatever they get in their inboxes?
Anyways, if the objective was to seek my views/comments on this,
I must remind that I have already commented on this five months back (see
here).
Chart of the day
Notes from my Diary
If as an investor, I am asked to describe the 2018th year of
Christ in one word, I would say "Capricious".
The year started with muted hopes, gained significant momentum
raising hopes to new highs, and is ending with despondency all around.
This has been a year, when most asset classes disappointed
investors. Higher volatility caused by frequent mood swings, marked the
financial as well as physical asset markets. Just when it appeared that the
global economy (and therefore markets) may be ready for unwinding of the
unconventional monetary policies in vogue since global financial crisis
(2008-09), some dark clouds have begun to gather on the horizon.
The global growth cycle appears to have peaked for now and is
widely expected to slowdown in 2019. Domestic growth in India appears stable,
but the triggers for any acceleration are missing. Risk of current trade &
tariff shenanigans escalating into a real crisis is keeping the global
economies on tenterhooks.
The macroeconomic picture in India is unclear at the moment.
The government has managed the fiscal balance quite well in
2018; though the challenges still remain. Headline inflation has mostly
remained below the RBI target. However, the core inflation seems bottoming out.
This leaves government/RBI with little fiscal and monetary leverage to
stimulate the economy, should it slow down further.
The external balance has worsened materially in recent months
due to a variety of factors, e.g., volatile energy prices & INR, poor
export growth, rise in non-oil & non-gold imports, etc. The real rates in
India continue rise. However, despite higher real rates, the household debt (as
% of GDP) breached the pre GFC high level, that has alarmed the regulators.
The industry wide capacity utilization levels improved somewhat
during the year. GST collections have stabilized somewhat, though it still
remain much below the budgeted levels. After many initial hiccups, the NPA
resolution process appears set to gather some steam. Resolution of couple of
large cases has created lot of optimism on that count.
The financial markets are jittery.
While the benchmark equity indices are almost unchanged YTD,
broader markets have given up most of the gains made in 2017. Out of the 18
major sectors, only six could give positive return in 2018, while 12 sectors
gave negative return. Cash (Liquid Fund) and Gold (INR) returns outperformed
most of the debt fund returns during the year.
This has happened despite record domestic inflows into equities;
though the foreign investors remained net sellers in equity and debt, first
time in five years.
Socio-political conditions are tense.
Insofar as socio-political conditions are concerned, the year
2018 has been marked with widespread farmers' protests, cases of mob outrage,
and some decline in the popularity of BJP.
After managing marginal majority in key assembly of Gujarat last
year, BJP is expected to cede more ground to the Congress party in states of
Rajasthan, MP and Chhattisgarh. Many market participants are taking this as a
harbinger of political uncertainty in 2019.
Socially, while
no one is starving to death, the people in general are seen to be restless. The
primary reason is unreasonably high expectations and aspirations driven by such
expectations. There is little indication that this gap between political
promise and actual delivery will be mending anytime soon.
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