Thread by @CFASocietyIndia

We head to our 3rd session for the day - Navigating the Market Maze - by @Lakshmi1876 , with a very quirky introduction by @jayenshah !

A very interesting introduction to the Market Maze - with an analogy to the movie Bhool Bhulaiya!

The central bank printing press has gotten too hot - and the excesses are being sucked out.

The US is currently stuck between Recession and Inflation. Commodities have taken a beating, and US consumer sentiment is at its lowest since 1960. While payroll data is strong, the number of job openings is 1.9 times higher than job seekers!

Peaking out of inflation is a harbinger of markers bottoming out. Inflation in the US hasn't really given a sign of peaking out, but by and large we're there.

An unfavorable cycle has to peak out.

Mentions Indian Economy as an Oasis in the global desert. A global desert which is currently facing a sandstorm.

Points in favor: Rising FDI flows brick by brick. Surfing exports, capacity utilisation closer to pre-Covid levels, above estimate tax collections, (Continued. 👇)

Indian economy an Oasis in the global desert, Points in favor (Contd.): Rising credit growth, improving credit rating profile, supportive monsoons and higher food prices to support farm income, high cash balances with the government, emerging revival in consumption (continued 👇)

Indian economy an Oasis in the global desert, Points in favor (Contd.): Inflation may peak over the next few months (subject to Oil prices - which has extreme views on outlook).

Factors that reinforce faith in India: improving GDP size, share in global GDP, Global trade, FDI Flows, growth in production of Steel, Autos, mobile phones - read more in the attached:

Outlook on Indian Equities: Corporate profits have risen sharply - with market caps having risen only in line with profits. FPI selling has been very sharp in the last few months.

While India's premium to EMs has been high, quality comes at a price.

India has been the best EM return generator in dollar terms.

Bad, uncertain times have inevitably been followed by revivals, unless economies go into multiple self goal mode, which looks unlikely.

On Debt Market outlook: global challenge around lower growth and high inflation. India's real interest rate is low, but is much lower than global peers. US inflation being higher than India is going to continue for some time.

Trajectory for inflation in India is on the receeding side. Surplus liquidity has significantly declined. India is on a keto diet!

Significant opportunity in the 3 to 7 year segment, with a good amount of future rate hikes priced in. This is not the time to go all in, however, best to invest in a staggered manner.

We now head to the Q&A session.

Q: how do you factor geopolitical events into asset allocation?
A: Defaults in some economies don't matter us. The key watch point are events that impact us. Macro risks are high geopolitically, hence stick to the shorter end of the curve.

How does technology impact investments? @Lakshmi1876 : technology is clearly the way forward, Quantamental investing is the future!

#MAW