About

Rajveer Rawlin received his MBA in finance from the Cardiff Metropolitan University, Wales, UK. He is an avid market watcher having followed capital markets in the US and India since 1993. His research interests includes areas of Capital Markets, Banking, Investment Analysis and Portfolio Management and has over 20 years of experience in the above areas covering the US and Indian Markets. He has several publications in the above areas. The views expressed here are his own and should not be construed as advice to buy or sell securities.

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The Case for a Global Recession in 2017 and Beyond – The Obvious Evidence

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Friday, 27 February 2015

Major Sell off likely post the budget

yes the budget is here but that's where the good news ends. Markets appear overvalued at trailing P/E's of well over 22.  Have a look at the data below:

2008 GDP - 7.5%, Dollar/Rupee - 42, Stock market Peak January - 6350, P/E -24, 3 month return from Jan 08  < -30%
2015 GDP - 5.5%, Dollar/Rupee - 62, Stock market Peak till date - 9119, P/E -24, It remains to be seen how much of a decline will occur, as of now -6.0%.

CNX NIFTY (^NSEI)

So clearly the stock market has advanced on weak fundamentals and rapidly deteriorating macros and no matter how great the budget, a substantial sell off beckons.

Wednesday, 18 February 2015

Warning Signs for Global Financial Markets in 2015-16

There are two major warning signs that are developing for risk assets in 2015:

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First we have significant #dollar strength despite a recent bounce in the euro, with the dollar index hitting multi-year highs. This is on the back of the potential end to the quantitative easing by the fed but also due to weakening fundamentals in the# Euro Zone which is mired in a deep recession and is unlikely to come out of it any time soon despite huge dosages of QE from the ECB.
PowerShares DB US Dollar Bullish ETF (UUP)

stock quotes
Even after another bailout for Greece, which is tantamount to throwing good money after bad dollar strength is all set to continue and would result in a serious bout of carry trade liquidation that could take down commodities, emerging market currencies and eventually global stock markets:
Global Commodity Equity ETF (CRBQ)
Market Vectors EM Local Currency Bd ETF (EMLC)
S&P 500 (^GSPC)

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The second major development is the potential upsurge in volatility. The #Vix index has not made new lows on each of the recent new highs for the S and P 500 in well over a year and is holding support in a multi year rounding bottom formation. This has resolved into higher prices for the Vix over the 50 level in August and lower prices for risk assets across the board. The Vix is incidentally well above it's 52 week low of 10.28.
VOLATILITY S&P 500 (^VIX)
Both these trends are set to continue into 2016 which could result in significant under performance of financial markets across the globe.

Tuesday, 3 February 2015

Down goes the Baltic Dry Index yet again

Another 28 year low for the baltic dry index, now down over 95% from it's all time highs, questioning the so called economic recovery these last 5 years and confirming that QE forever policies in the US, Japan and the Euro Zone are destined for failure. Eventually the weak economy globally should translate into lower asset prices across the globe.

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My Asset Allocation Strategy (Indian Market)

Cash - 40%
Bonds - 20%
Fixed deposit - 20%
Gold - 5%
Stocks - 10% ( Majority of this in dividend funds)
Other Asset Classes - 5%

My belief is that stocks are relatively overvalued compared to bonds and attractive buying opportunities can come along after 1-2 years. In a deflationary scenario no asset class does well other than U.S bonds, the U.S dollar and the Japanese yen, so better to be safe than sorry with high quality government bonds and fixed deposits. Cash is the king always. Of course this varies with the person's age.