Do it yourself

Financial Year 2024-25 (FY25), may be recorded in the annals of history as a watershed year for global politics, geopolitics, markets and the financial system. The events that occurred during the past twelve months have opened up significant possibilities for emergence of a new global order. Although the contours of the likely new global order are yet to begin taking a shape, it appears that fight for dominance over technology; endeavor to gain fiscal strength; interventionist democracy where the state exercises intensive control over citizens; and top priority to energy security would be four key characteristics of the new order. The markets began to take cognizance of the broader developments and oscillated wildly between the extremes of greed and fear during the year. However, thankfully, markets managed to close the year on a rather satisfactory note. Most asset classes – equity, bonds, precious metals, base metals and real estate yielded decent returns for the year. Moreover, as...

In the past seven trading sessions, the benchmark Nifty 50 has managed to fully recoup the YTD2025 losses, soothing the ruffled feathers to a large extent. The broader markets have also regained some of the lost ground, though the midcap (-10% YTD2025) and small cap (-15% YTD2025) indices are still in the negative territory. For the financial year 2024-2025, Nifty (+6.5%) has yielded a decent return, which is marginally lower than China (+12%), the US (+10%) and Europe (+9%), but much better than the other Asian peers like Indonesia (-11%), Japan (-6%) and South Korea (-5%). Broader markets in India are also positive FY25 (Midcap +8% and Smallcap +5%). Now the question is “how does the market look from here?”. I shall deal with this question in some detail next week. However, to close this financial year, I must say this. In my view, the collective wisdom of the market in India has appeared to have assimilated all the known events and anticipated developments regarding the economy and ...

A friend recently remarked, “I don’t want to be young for the first time in my life”. He was alluding to the challenges Gen Z (born between 1997-2012) and Generation Alpha (born after 2012) children are likely to face in the coming years. I fully agree with him. The silver on my scalp gives me comfort that a relatively well lived life may end as comfortably for me, and many people my age. But young people in their 20s have no such comfort. The people in their late twenties have already stood witness to three massive economic/market crises (dotcom burst, subprime burst and Covid-19 pandemic) that (i) were not caused by a war or natural disaster; (ii) did not cause human suffering which was anywhere closer to the crises witnessed during 19 th  and 20 th  centuries; and (iii) were brought under control through monetary and fiscal stimuli within a short period of time. In the past twenty-five years, the governments across the world have increasingly become more socialist. While se...

Continuing from the last week ( View from the Mars – 4 ) For a small investor like me, whose investment spectrum is limited to the locally available instruments and opportunities, it is critical to assimilate the impact of the global events on the local economy and markets. A natural follow-up would be to assess if a change in investment strategy and asset allocation plan is required to factor in the impact of the global events. In most cases, the impact of global events is temporary and does not warrant any change in the investment strategy and/or asset allocation. However, some global events could have a lasting impact on the domestic economy and markets. Such events often require material change in the investment strategy and asset allocation. It is important to note that in the past three months, the world has not witnessed any event that was not widely anticipated. The shift in the US policy (fiscal and monetary) paradigm was widely anticipated and documented. The response of the ...

Continuing from yesterday ( View from the Mars – 3 ) In my view, the following issues may,  inter alia , play an important role in shaping the contours of the new world order that may evolve in the next decade or so. ·           China presently is finding it hard to gain acceptance as a major global leader. One of the reasons is lack of democracy, which is still a major consideration for the western developed world. Besides, it is also regarded as an irresponsible power by the extant major global powers. Recently, the spread of Covid-19 virus from Wuhan laboratory, causing a global pandemic, has materially tarnished the image of China. In particular, the mistrust between the US and China have increased manifolds after the outbreak of pandemic, resulting in a Sino-US cold war. This cold war that may last for many years, or may be decades, may be a key determinant of the new world order. Important to note that Russia, which was a key WWII ...

About 17 years ago, a global financial crisis (GFC) engulfed the global markets. The impact of the crisis on financial markets was mitigated in a couple of years by collective efforts of the governments and central bankers. However, the social, geo political and economic impacts of the crisis largely remain unmitigated even today. The "Reset" button pressed by the crisis resulted in widening of socio-economic divide across the world. The geopolitical tensions have intensified materially with rise in nationalism, protectionism and parochialism. This has not adversely impacted global trade. The rising unemployment in Europe and most commodity dependent economies in Asia, Africa and Latin America, declining growth in China, substantial cut in developmental aid to least developed nations due to fiscal pressures, has caused widespread rise in human suffering. The COVID-19 pandemic further accelerated the "Reset" process, paving the way for the emergence of a new glob...

Continuing from my previous post ( View from the Mars ) “Make America Great Again” (MAGA), campaign of President Trump has been one of the most successful political campaigns of recent times. The campaign won Mr. Trump and his Republican Party (GoP), a clear control of the white house, the Senate and the Congress. From the campaign material available publicly, it is not clear what is the reference point for President Trump’s MAGA pledge. The campaign did not seem to have specified when did the greatness of the US begin to diminish and how much of the global stature, it supposedly enjoyed at some point in history, has been lost. For the lack of adequate information, it is safe to assume that the campaign of Mr. Trump, referred to the term of his predecessor, Joe Biden (2021-2025), as period of decline of America, and intends to revert to the status quo ante as on 19 th January 2021, when he vacated the White house after a four-year stay, and carry forward the unfinished agenda fro...

Have you ever wondered why— ·          In the post WW2 popular movies and novels, all mischievous and malevolent inhabitants of other planets and galaxies (‘Aliens’) attack only the United States of America (the US), especially the richest cities of New York and Los Angeles! Whereas, there is evidence of just one attack (9/11 WTC attack in NY) on the US soil by a non-US citizen, in the post WW2 period. ·          Mostly, agents of the US secret services (or in few cases agents of the UK secret service) assume the responsibility of saving the earth from an imminent destruction (‘Apocalypse’) and always achieve the task successfully! Whereas, there is overwhelming evidence of multiple failures of the US secret services. For example, they failed to prevent assassination of President Kennedy (1963); attack on WTC (2001); Capitol riots (2021); assassination attempt on Trump (2024). They also failed misera...