Monday, December 24, 2018

Have The Communists won and all that...

President Trump's surrender to Vladimir Putin will rank as one of the greatest victories of the ex communist regime,off course nowadays all wear the 'free market' garb.Leaving Syria and Afghanistan bereft of US presence when the IS and taliban are yet to be completely defeated smacks of recklessness by the Americans and bodes ill for the future security of the west.

Russia,Iran and Turkey now form an axis that becomes a third front in the game played by Taliban/Islamic State - Saudi Arabia/UAE sunni front - Iran/Syria Shia front.I do not think these conflicts will get better in 2019.If anything they will get worse.

Oil has been such a surprise.From predictions of $100 per barrel to sub $60 was precipitate.India would celebrate if not for those in power focussing on power of a different kind.Lord Ram might win elections but it does not have the power to repair an economy facing lack of jobs,trouble in the agriculture sector,religious issues etc

Despite losing local elections 5-0,the Indian markets have been resilient.The next six months I fear are going to be a nightmare for traders but astute investors will find huge opportunity to build a portfolio that will generate above average returns over the next Three years.

PSU Banks will undergo consolidation and not all of them will come out smelling of roses.I do not understand so I will not go there.Information Tech is at the whims and fancies of The Donald and hence difficult to predict as is pharma.

The villians of 2018 - small and mid cap companies with a strong product suite and cash/risk management will spring to life(and their stock prices) and hold the best hopes of creating a good return on investment.

My theme for 2019 remains:-
Return of Capital instead of returns on Capital.

Liquidity is still tight.Businesses face their biggest challenge accessing capital.NBFCs will find space in the banking genre but their risk management has to be extraordinary.There are a couple.

I also feel the Real Estate sector,especially the affordable housing space will boom in 2019 in a lot of states.

Interesting to wait for Elections,for China - US trade standoff,wars in the middle east,oil,capital....many factors that were there last year except euphoria.