Friday, August 5, 2011

The World Wont Collapse and India will Grow

 After today's global selloff and since the middle of 2008 I have had more phone calls from scared clients and investors than I can remember in the past couple of years.

Yes the US economy is deaccelerating,Europe is under a mountain of debt,commodities and food prices are at an alltime high.Asia has inflation and infrastructure issues.Come to think of it the money printed since the Lehmann collapse had to show its affect at some point so cannot say that this turn of events was entirely unexpected.

The Positives are the fall in crude and downturn in the commodity circle which for India will have a beneficial affect although in the short term the capex expansion by most firms will cause some pain.

I keep hearing the Finance Minister of India say that Inflation will soon be at 5%.How?With the rapid urbanisation and 9% of agricultural land being turned into urban settlements in india in past 2 years the pressure on food prices will not ease unless new technology comes into play and really quickly.

Since the Israelis introduced drip irrigation I have not seen any new innovations in my village in Punjab and for those who do not know the best place to see the latest tech is to watch the Punjabi farmer in his fields.

I think the value investor in India can try a bottoms up approach in indian equities,commodities or real estate.Ask me if you need specialized advice.

1 comment:

  1. Nice thoughts, and to the point. Developing economies as the driver of global growth is the new normal, especially India and China. The wall of money is waiting to hit these economies. Good thoughts. Keep it up.