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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Thursday, 26 March 2015

Nifty Gold Uptrend in Question

Visit StockCharts.com to see more great charts.
The Nifty has been in a continuous uptrend against gold (in dollars). Gold has been falling on deflationary fears. As the deflationary theme plays out and eventually spreads to risky assets like stocks a catch up to the downside is likely for stock market indices like the Nifty. A pull back thus seems to appear on the charts with Nifty under performance vis a vis gold in a deflationary context.Chart courtesy StockCharts.com.



Monday, 23 March 2015

Nifty Over Extended Vs the Dollar

The Nifty has been even out performing even the strong dollar off late.  The dollar has been strengthening significantly this year and has virtually out performed a whole host of asset classes. The Nifty and few other stock indices like the S and P 500 and the German Dax have outperformed the dollar. A bit of under performance vs the dollar has begun and is overdue for the Nifty. Chart courtesy StockCharts.com.



Visit StockCharts.com to see more great charts.

Sunday, 22 March 2015

Baltic Dry Index still near life lows

Check out this chart from StockCharts.com for the baltic dry index, which is close to its life lows and down over 95% from the highs set in 2008. Obviously the massive influx of liquidity form QE's in the US, Europe and Japan hasn't really helped the global economy.



Visit StockCharts.com to see more great charts.

Monday, 16 March 2015

Behind the tantrums of QE withdrawal lies a very grave deflationary threat

Last week most risk assets sold of on the prospects of QE withdrawal following strong job numbers out of the U.S. Here's how things shaped up:
The S & P 500 was down well over 1%
Gold  was down close to 1%
Oil was down close to 10%
Copper was up about 2.5%
Emerging markets were down close to 3%
The clear winner was the dollar which surged nearly 2%

If markets were really bothered about inflation, gold and oil would be going through the roof instead they have absolutely collapsed over the past year:
SPDR Gold Shares (GLD)
United States Oil ETF (USO)

In addition the flight to quality trade that surfaced during the recession of 2008 into the dollar seems to have emerged with a vengeance:
PowerShares DB US Dollar Bullish ETF (UUP)
While one may want to brush aside the emergence of deflation which has already started to surface in recent PPI and CPI numbers, let's not forget what it did to Japan since the early 90's. Despite the all out war to contain deflation in Japan interest rates are still negative and the stock market which has rallied off late is still down over 50% from the highs it set in 1989.

Friday, 13 March 2015

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.

Wednesday, 4 March 2015

Very Bad Sign When Markets go Down on Rate Cuts

It is a very bad sign when markets go down on good news. While the rate cuts from the RBI could be construed as a good sign in the short term, it is also a tacit admission to rapidly slowing growth in the future. Given the stock market is a discounting mechanism slowing growth and earnings downgrades are not factored into current stock prices and more declines are likely in the future as equity markets factor in a global recessionary outlook caused by rampant deflation.

CNX NIFTY (^NSEI)

Ultimately these rate cuts do also signal Rupee weakness versus the dollar in the long term and that most certainly wont help our deficits and the ambitious targets for the fiscal deficits proposed in the recent budget and our GDP estimates will mostly likely come down to the 5-6 % mark for the upcoming year. All in all a very negative outlook for equity prices in the upcoming year.
USD/INR (INR=X)

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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.