Do it yourself

A famous fund manager recently expressed serious concerns about a “financial crisis” that is just about to hit the Indian middle-class households ( see here ). In a podcast with Mint, he said, “With household financial savings at a 50-year low and debt levels (excluding mortgages) among the highest globally, the country is dangerously unprepared for a looming wave of tech-driven job disruption.” He was apparently referring to the disruption created by the popularity of “Artificial Intelligence” (AI) in the global job market. I have no disagreement with the analysis of this gentleman. In fact, to a large extent I do agree with his concerns. The fabled Indian middle class may indeed be facing an unprecedented crisis. However, I have my reservations about AI causing or accentuating this crisis. I firmly believe that this advancement in technology, just like all the previous ones, will definitely improve overall employment prospects, in particular, and quality of life, in general. If anyth...

As I highlighted yesterday ( see here ), the bond yields are raising a red flag over equity markets valuations. However, by no means it is the only red flag. There are some other warning signals, cautioning investors to tread cautiously as the road ahead could be bumpy with some obstacles blocking the path. For example, the following are some of the red flags I have recently noted from the research reports of brokerages: BoP almost zero, as foreign flows dry up : 3QFY22 saw a marginal net foreign investment outflow of US$1bn compared with the past five-quarter average of ~US$20bn. This is mainly due to: 1) FPI turning negative with outflow of US$6bn, and 2) FDI dropping to US$5bn compared with the recent quarterly average of US$13bn. FII selling has worsened in 4Q, with our latest estimate putting it at US$15bn vs US$7bn for the whole of 2021. As the US Fed continues tightening, FIIs may not be major buyers for the rest of the year, though they may not sell too much either, after a...