In December 2012, Japanese Premier Shinzo Abe announced the much touted “three arrows” to financial stimulus. With a view to drive the country towards economic stability and better productivity, Abe’s measures focused on monetary policy, fiscal policy, and economic growth strategies to encourage private investment. Read More
The Multi-Act ‘Moat & Special Situations’ PMS portfolio is a unique way to create market opportunities in company stocks with inefficient market pricing but which earn substantial returns during a market recovery. We believe that investments in businesses with moats (businesses with high & persistent barriers to entry) ensure long periods of excess returns for investors. Read More
“Since the financial crisis began, Gold grudgingly began to form a part of the investment landscape and gradually began finding a role back in investors’ portfolios. But as we complete more than 5 years from arguably the “depth” of the financial crisis, it is remarkable that the debate about the utility of Gold as an investment still remains an open one in the mainstream press. Read More
As always the best way to explain anything is with a story – and in this case a true story.
Forest fires are a major concern in many parts of the U.S., upsetting lumber companies who saw profits burn and individuals who saw the trees ablaze. The Government decided to try and better the situation. They spent money and time to train personnel and improve infrastructure and after a few years, they had stopped the various small fires from breaking out. Everybody seemed happy. Success? Not really. Read More
Though much derided by sceptics, short selling has proven it’s uncanny ability to indicate bubbles before they engulf the entire system. A great example of this was the post-2007 subprime crisis where short sellers, who realised the toxicity of these supposed AAA+ derivatives, started betting against them. Short selling is an important market feedback mechanism. In a bull market, participants tend to snap up products driven by exuberance rather than by due diligence. It is instances like there where a short seller intervenes and restores a semblance of sanity to the market.
It is in fact the constant Government interference, especially, in terms of interest rate manipulation in a free market is what has corrupted the system. With the state having more power in times of war and more authority under the welfare guise, excess spending is seen by many nations. This excess however is not funded via taxes or other revenue streams, but by debasing the currency and giving rise to inflation. In fact in a true free market, not only would government interference be minimal, but also have gold and silver standards and let interest rates be market determined. Read More
Given the interest rates remain 200 basis points below the official inflation rate, how this aides in achieving monetary stability will be interesting to see. Like his predecessors there is an equally high chance RR is under pressure to please his political masters, who in India are constantly competing on who can be more leftist In the years leading to India’s current inflationary woes, the RBI while claiming to keep a careful eye on inflation, were in fact expanding the money supply by 22%! The plan to keep inflation in check has so far been pricing control and micro management of all growth related activities, to the point of stifling growth in the country. This has led to not only a painful slowdown in industrial growth, but also destabilised the currency and seriously hampered our purchasing power parity. Read More