Friday, October 4, 2019

India - Missing The Wood From The Trees?

Trees are born from seeds. Insignificant seeds that are affected by the amount of light, the quantum of nutrients in the soil or simply a sheltered location.

Then there are times when after fruiting the leaves wither and shrivel, falling away due to parasitic attacks or just some other factor.

The Indian economy is beginning to resemble a tree under attack less from natural causes and more from the fact that the woodcutter has pruned the tree in a lopsided manner. Imbalanced, the roots losing sustenance and failing to hold on.

Who wins - the gardener or the woodcutter?

The damage done looks immense yet the self healing properties inherent in the economy should make a comeback.

On the street, pessimism reigns supreme. Not since the last decade have so much of a shakeout happened so quickly even when officially we are in 'slowdown' and not a recession? Ask the man in the street if verbal jugglery makes any difference.

I did think that a shakedown of the system with the cunning and conniving finally getting their come uppence would be good for overall business but the rot ran so deep and we might just be somewhere in the middle of the cleansing seems like a frightful thought.

There are always sectors that will find stability but making a guess as to which of them it will be is beyond me. Best to go with the flow and not take high risk directional calls. Unfashionable stodgy but cash rich or duopolistic businesses  are a good defensive portfolio hedge.

I am excited about finding entrepreneurs and business stories that are fighting the volatile times effectively and sectors that have taken hits but sustained.

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