Thursday, June 22, 2006

Reading Material on Commodities

Primer on my investment outlook

Karan, a longtime reader, inquired about reading material for investors. There are a number of free resources I use.
www.mcdep.com - a newsletter for energy investors :-) always bullish, but interesting
www.fullermoney.com - Free daily commentary from the UK
- Insightful commentary from John Hussman
http://abnormalreturns.wordpress.com - A forecast free blog that compiles news
- convertibles notes on the ASX.
- Jyske Bank Intl Bond analysis - especially of emerging markets and interesting markets like Iceland.

Thursday, June 08, 2006

Correction or Crash

Primer on my investment outlook

A friend asked :-
Any thoughts on the recent "correction" in the Indian stock market?
How much further to go before the dust settles down.

Do you think a buying opportunity at some point? What sectors? Cement,
Real Estate seem to have the momentum?

The last few years have seen an unprecendented growth in liquidity and ultra low interest rates. As a result, financial assets of all types have gone up in price. The recent fall seems to leave us with an oversold state with a possibility of a rebound. however, liquidity everywhere is slowing down. Interest rates everywhere are going up. It also falls to reason that if ALL financial assets could go up in the last 3 years, they could ALL go down in the next 3 years.
Personally I am short the US housing sector. I have most of my money in convertibles of companies involved in commodities but I am looking to lighten up on my holdings.
As for India, it is a bubble, make no mistake. The Indian govt runs huge deficits, and reform is still slow to come. Hot money has flown to India over the last few years, and it can flow out.
If someone entered the market 3 years ago when it was at a low base, holding on makes sense. India is overvalued and I personally would not enter now..