, Marc Faber Blog: Why Marc Faber is looking to invest in badly hurt Indian stocks

Friday, January 11, 2019

Why Marc Faber is looking to invest in badly hurt Indian stocks

If we look at the markets around the world, they have always been driven very much by the S&P500. In other words when S&P500 goes up, other markets go up some more and some less. Like in 2017, all the Asian markets grossly outperformed the US, and also European markets in 2018 most Asian markets have underperformed the US. I have to say there is an exception, which is India that has performed reasonably well, not that well in the US dollarNSE 2.45 % terms, but in local currency it is at least up for the year.

Since the beginning of the year if you analyse statistics, there was a slowdown in economic activity and in particular after August, business fell off a cliff. I talked to some people in August and they were still very optimistic about the future and in November they wrote that the revenues are 20 per cent below a year ago.

In other words they totally misread the economic slowdown that was going to take place in the second half and this economic slowdown is actually visible in the performance of bonds in the US. If you look at the stock market between October, early November and today, we are down say plus/minus 10 per cent, depending on the index.

Some indices are actually down from the peak by 20 per cent. But in the bond market, the 10-year US treasury has rallied since early November by 10 per cent. I think we will now consolidate and I am just saying that bond market was beginning to recognise the economic slowdown earlier than the stock market.