The puzzling factor we were discussing is that as far as the quarterly earnings in our country are concerned, is there some kind of sense of slowdown that could be prolonged due to macroeconomic concerns in India?
Mark Matthews: I don’t know if these are macro concerns, but you’re absolutely right. I think the main problem facing India now is slowing earnings growth. And the Nifty will continue to hover around 10% profit growth this year, but in the most recent quarter, it looks very flat. And yeah, I don’t think this is really driven by the economy, but I mean, the economy looks good to me, but you need earnings growth to sustain the Indian stock market, like any stock market anywhere in the world. . I mean, without that, it seems very expensive.So if you had to let us choose between US stocks, global bonds, gold or Bitcoin, which direction would you lean towards over the next 12 months?
Mark Matthews: I guess I would lean towards global actions because I think the Chinese market will rise over the next 12 months and there are still good stories in other major economies in the world. He emerging markets They have quite strong GDP growth ahead of them in the coming years, the highest relative to the United States in 20 years, I might add. And global actions, of course, include the United States. So if I’m wrong in saying that the rest of the world doesn’t surpass America, well, you still have America in your favor. But I think things are fine. He American economy you can see it well. The Chinese are stimulating. The elections are likely to go the way the market wants. Geopolitical events do not appear to be causing any impact on the global economy. In fact, there is a possibility of some slowdown in geopolitical issues over the next 12 months.
Let’s also understand what the outlook is as far as some of the exporters are concerned because of where the rupee is heading and I’m sure many other emerging market currencies with the movement that we have seen in the US dollar, how can you Do you think any of these companies or sectors are likely to be successful?
Mark Matthews: Well, if based solely on the dollar, I think the dollar should probably weaken over the next 12 months, but it is very difficult to predict because other central banks will also be busy cutting interest rates. The ECB just cut 50 basis points last night, for example, and Lagarde had a very subdued press conference. Anyway, I hesitate to make a strong directional bet on the dollar, but my bias would be, if I had to make a bet, a little bit softer, which I assume would therefore be negative for exporters.
In terms of asset class right now, where do you rank? Because it is a strange moment in which both precious metals are at an all-time high and stocks and crude oil are also quite unstable and one would say at high levels. .
Mark Matthews: Yes, the world is changing in very strange and wonderful ways. So I think what you’re seeing with precious metals is a huge appetite from a wide variety of investors in that asset class for a wide variety of reasons, but probably most of them relate to geopolitics. And the idea that there has been such a bifurcation in wealth between the rich and the poor around the world in general, that more and more governments will seek to tax the rich more and that gold is a non-systemic asset, so it is less easy to be taxed.
But anyway, sorry, yeah, I think overall things are looking good. I mean, certain markets that have done very well, such as India and the United States, are expensive and therefore perhaps next year we will see a rotation towards some of the cheaper markets, such as China. I don’t know where else, maybe Japan, I don’t know. But in general terms, I think the outlook in the world is good and we should not be pessimistic.
Looking to increase allocation to gold vs. stocks right now?
Mark Matthews: Well, we are much more overweight in stocks. I mean, if memory serves, we have over 50% in stocks and we only have a little less than 10% in gold.
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