Tuesday, February 14, 2017

Tuesday, February 7, 2017

Emerging markets to perform well compared to US markets

For the next 10 years, one will make more money in emerging markets than in the US. By historical standards, the US markets are extremely expensive and there is hardly any earnings growth.

In the last five years, we have seen an enormous inflow into ETF (exchange traded funds) and index funds and that has boosted large market capitalisation stocks in all markets, including India. The larger companies are relatively expensive in India. On the other hand, you have a lot of smaller companies that have been overlooked and neglected.

Tuesday, January 31, 2017

Marc Faber warns against protectionism and travel bans

Protectionism, I guarantee you, is not going to be good for the US. What if I'm a foreigner and I see a travel ban. So the private citizens, they see a travel ban on Muslims. Anyone with any brains will think what if tomorrow there is a travel ban on the Chinese and I own a property in the US or I own assets in the US and I can't access assets in the US. So I think this travel ban, psychologically, will have a very negative impact in the long run on the U.S. dollar and U.S. assets.


Tuesday, January 10, 2017

Economic statistics indicating US economy not growing

If I look at economic statistics that were published very recently, housing is not contracting but is not growing strongly either. Housing stats in November were down 18% month on month and down 6% year on year. Car sales in the US are weakening. Look around the world at the emerging economies. Most of the emerging economies are not really in recession with few exceptions like say Brazil but they are not growing rapidly either.

In some sectors of the economy, there is a recession -- not pronounced depression -- but business is lower than a year ago. In other sectors, it is flat but in general we have this asset inflation which has come essentially in many sectors of the economy to an end. Housing prices in San Francisco are no longer going up from an inflated level where well understood. Also in New York high end luxury is easing.

There are many symptoms that the economy is not strengthening but actually weakening and if interest rates go up substantially, that would choke off economic expansion.