Hot Indian Market

These markets were bombed out just 10 months ago and no one wanted to touch them. Now everyone loves them and you can't stop hearing about job outsourcing to India or China's huge boom and commodity purchases etc. My instinct is that just too many people are piling in right now - it is the sort of thing you see fairly near an intermediate-term top in the market. There are lots of signs e.g. press comment, huge blowoff runups after an extended rally, funds going from discounts to NAV to significant premiums (IFN is a classic case). These are all signs of exuberance, and a good signal to book profits.

So, although they are probably in a long multi-year secular bull market, most of the appreciation has probably happened for now and IMO the risk is to the downside over the next few months. However, the long-term picture remains intact and that dip may provide a good opportunity to get back into these markets at more attractive levels.
 
Quote from Cutten:

These markets were bombed out just 10 months ago and no one wanted to touch them. Now everyone loves them and you can't stop hearing about job outsourcing to India or China's huge boom and commodity purchases etc. My instinct is that just too many people are piling in right now - it is the sort of thing you see fairly near an intermediate-term top in the market. There are lots of signs e.g. press comment, huge blowoff runups after an extended rally, funds going from discounts to NAV to significant premiums (IFN is a classic case). These are all signs of exuberance, and a good signal to book profits.

So, although they are probably in a long multi-year secular bull market, most of the appreciation has probably happened for now and IMO the risk is to the downside over the next few months. However, the long-term picture remains intact and that dip may provide a good opportunity to get back into these markets at more attractive levels.
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An absolutely kick ass post Cutten. Has the boom slowed the emigration of South Asians into the U.K.?
 
Quote from Pabst:

An absolutely kick ass post Cutten. Has the boom slowed the emigration of South Asians into the U.K.?
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Perhaps the Asians take fewer days off sick (are more conscientious), work harder (have a superior work ethic), are better educated (are more ambitious) and are on average more intelligent than the indigenous European tribes...

Moreover, perhaps they can create a tech boom in Europe, in a similar way they were in large part responsible for creating one on the west coast...

Its time for these Europeans to start kicking out their indigenous deadweight native tribes (maybe send em to Iraq and Afganistan for low-IQ peacekeeping work) and start importing more Indians, Chinese and others, if they want to be able to compete on the global stage... I say Amen to total freedom of labor mobility...

Let the crap workers rot (on a few $ a week welfare), and import the quality workers from overseas... that's the way to go... which is why America is lightyears ahead in economic and technological progress relative to the Europeans... America is truly the land of the entrepreneur, where the best thrive, irrespective of origin... Europe is, generally, a backward-looking excuse of a continent, living in a xenophobic colonialist dreamworld...
 
Pabst - no idea about the net effect. However, even a 100% rise in local living standards (which would take years) would still leave India way behind most western countries in terms of desireability. India is still a very poor, corrupt, badly governed country, where it is hard for an honest hard-working person to get ahead and achieve a good standard of living and personal freedom.

Emigration is mostly determined by strict western border controls rather than booming local economic conditions IMO, since demand massively exceeds supply. As an example, I wouldn't be able to get a green card without buying a US business worth $1 million or marrying an American woman (which would probably cost even more :D), and you would probably find it similarly tricky to migrate permanently to the UK. Imagine then how difficult it would be for an upwardly mobile person from India to migrate to the west. Many of them can't even get tourist visas.

Finally, it's not like I'm short these markets, so I'm more trying to sound a note of caution than make some kind of great prediction. I just find that after a big one-way move like this, the first rapid correction is often a warning sign that a top is imminent. I would certainly get bearish if they retest the recent highs and then start trading lower after a double-top.
 
Quote from Cutten:

Pabst - no idea about the net effect. However, even a 100% rise in local living standards (which would take years) would still leave India way behind most western countries in terms of desireability. India is still a very poor, corrupt, badly governed country, where it is hard for an honest hard-working person to get ahead and achieve a good standard of living and personal freedom.

Emigration is mostly determined by strict western border controls rather than booming local economic conditions IMO, since demand massively exceeds supply. As an example, I wouldn't be able to get a green card without buying a US business worth $1 million or marrying an American woman (which would probably cost even more :D), and you would probably find it similarly tricky to migrate permanently to the UK. Imagine then how difficult it would be for an upwardly mobile person from India to migrate to the west. Many of them can't even get tourist visas.
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It is very easy to migrate to USA for many high achieving Indians. If you work for multinational company in India, after few years they transfer you to USA if you are high performer. There is a special visa for this. Once in USA you can apply for green card and you get it.
Out of 42 people from my MBA class from one of the top business school in India currently 36 are In USA.
Obviously the other route is H1 and after that applying for green card.
 
Cutten "buying a US business worth $1 million "

Its more like $40,000 minimum with 2 US employees- we were going to emigrate from UK to Florida, but decided in the end not to. Would miss family, friends and proper pubs :)
 
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