About

Ahead of the Curve provides you with analysis and insight into today's global financial markets. The latest news and views from global stock, bond, commodity and FOREX markets are discussed. Rajveer Rawlin is a PhD and 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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Time Series Analysis with GRETL

This video shows key time-series analyses techniques such as ARIMA, Granger Causality, Co-integration, and VECM performed via GRETL. Key dia...

Showing posts with label great depression. Show all posts
Showing posts with label great depression. Show all posts

Tuesday 20 June 2023

The Ghost of Irving Fisher Returns?

So many market cliches have been used to describe markets over the years. These include Goldlilocks, the Fed Put, irrational exuberance, don't fight the FED, don't fight the tape, etc. The aptest phrase for today's markets is the famous quote from economist Irving Fisher in October 1929 right before the Great Depression of the 1930s set in:

"Stocks have reached what looks like a permanently high plateau"

                            Source: Market Cycles Chart - New Trader U

Of course, central banks have a plethora of unconventional monetary policy tools at their disposal to avert major crises these days, but valuations are quite stretched.


Wednesday 30 September 2020

Interesting Market Views

 Here is a midweek take on markets from the pros I follow on Twitter:


Thursday 8 June 2017

Thursday 19 January 2017

Global Economic Downturn Ahead?

Thursday 1 December 2016

Major Sell Off Coming?

Wednesday 13 April 2016

Chart of the Day - Great Depression of the 1930's

The chart of the day is courtesy MichaelMarkowski.net via Seeking Alpha and shows the stock market crash during the Great Depression of the 1930's. Are we going to have a repeat soon FED QE's not withstanding?
great depression

Friday 26 June 2015

Early Signs of a Deflationary Collapse?

Some interesting developments are playing out in long term charts that make me feel comprehensively bearish over the long term:

a) Firstly a massive rising wedge  has formed on the long term S and P 500 chart. This is much bigger than that observed in 2000 or 2008 and has started to break to the downside which could have profound consequences. A major bear market could ensue post the break. Chart courtesy StockTwits.com:

b) Secondly Margin Debt is at record levels and has eclipsed levels seen during the maniacal peaks of 2000 and 2008. Once the above rising wedge breaks you could have a rush for the exit triggered by margin calls. Chart courtesy advisorperspectives.com:
stock market today

c) Thirdly despite multiple dosages of Quantitative easing (#QE) from global central banks the velocity of money is below the levels observed during the Great Depression. This implies that changes in money supply will have little impact on the economy going forward. Further QE's are likely but won't really stimulate the global economy. Chart source armstrongeconomics.com.
velocity 1910-2010
The above developments taken together with ongoing bear markets in several key asset classes  make for a deflationary collapse increasingly likely in the not too distant future.

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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.