"The Future gazing out, a past to overwrite."
Well, here we are again. It is Christmas eve & I figured now would be a good time to look forward & put down my thoughts. I have been meaning to write this for a while & had ideas but should have noted them all down because I don't remember everything. Nonetheless, lets roll:
2024 quick recap:
Professionally a good year. I learnt a lot of new stuff, though not at the pace I would have liked. Wanted to get my math, coding & finance way better than I ended up with. My pace of learning stays slow as I tried to tackle multiple things. We move. It is what it is. I'll continue to improve what I can, when I can. This was also the year I was most actively involved in markets. Looking across multiple asset classes, developing my understanding of how they move. Still a beginner though.
Personally it was a difficult year. Lost some important figures in my life, had some financial hardship which I am glad I survived. Didn't make much headway in the gym but stayed consistent which is the most important thing. I had made a commitment last year to be more involved with friends & family going forward. It started out well, but faded as the year passed. Again, it is what it is & I am making no such commitment for 2025. I learnt some invaluable lessons in money management & human nature which I believe will benefit me going forward.
Ok boring recaps outta the way. Let's focus on the interesting thing: THE FUTURE!
Personal stuff: All pretty standard, get better in the gym, improve my math, coding & understanding of the financial system. Finish some draft fun posts for the blog before I am totally out of ideas (I really am). Be more involved in markets & get better than my competition. Take good care of family & friends & help them achieve their goals.
Same professionally. I won't talk much here about work but my objective is to explore new areas & be the driver of better changes for my team.
***Please do not take anything here seriously I am an idiot & writing this for fun***
Now let's dive into what I think of markets going into the new year:
India: Look, India has had a bit of a PR problem now. Their markets have been struggling since like September, people are done with the filth & the pollution of the country. Been seeing lots of complaints about deep government corruption (look, we get the government we deserve. I won't explain here), normalization of the aforementioned things, rising costs of living, low agency & honor of people, lack of a manufacturing infrastructure as well as govt support, caste system & bad treatment of fellow human, bad education system, etc. I think this is good. First problem of trying to solve something is atleast admitting that there is an issue. All of these are real issues but people ignore that despite, or in spite of all of these, India has continued to grow & excel. Slowing GDP growth still means growth. Attitudes have gotten better. More & more people come out of extreme poverty every year. There is a thriving culture of startups. The services sector is doing well & may evolve with AI. Or get destroyed. I don't know. I won't bet against people adapting. Public infra has in fact improved a lot.
All of that being said, I see a muted year for Indian stocks going forward. I think valuations are a bit stretched, we will see earnings slow down. Not a crash though as Mutual fund flows are unstoppable in domestic markets. It still returns a green number in my opinion. Just not as spectacular as people would expect. There are some emerging themes which I am bullish on which I will discuss later in the post. I would also be comfortable owning Indian bonds here, esp HY corporate bonds through a fund (directly buying them is a hassle for me because of my job). I think USDINR continues to go up so if you want to be hedged there if this affects you. We can easily see this go to 88 or farther by June or September. But I know 0 about FX so pls ignore me entirely.
India is losing the information & PR war online, & they need to fight back. By improving, by shining light on its progress. I have sensed complacency from the ruling Indian parties & its patriots. This is the biggest single risk I see for India that is not discussed elsewhere. For the rest of them, I think we all know what they are as they are discussed on new forums so I will leave them out of discussion here.
US: More bullish on US stocks over India. I just don't see what stops this train. Sure they may not return the same 27% YTD, but I still think we see double figure returns. I will continue to monitor daily price moves & buying any dips. Their earnings are doing fine & their is no catalyst to signal otherwise. I do not want to discuss "macro" risks here as they are ever present & always being discussed online & there is nothing to highlight for me. I think Trump presidency will be entertaining again though maybe not as much as his first term. Which might be a good thing. US Bonds, I see them trading sideways. Would be fine owning them. I know there is a lot of talk about US yields going back up to like 5% on the 10 yr because tariffs but I think those chances are very very low.
Europe: I know zilch about Europe but I saw some bullish thesis on their stocks so I just want to say purely on my gut that I wouldn't touch Europe. Except maybe their defense?
China: This one gave me a huge loss & wasted my time throughout 2021, 22 & 23. I am probably never getting back in, but if I were I'd be bullish. Stimmy hopes, a really resilient manufacturing industry, doing good in tech. No one is getting rid of China, despite tariff threats from Trump which I think won't amount to much anyway.
Japan: Ugh okay adding Japan here. I've said this before as a half joke, the BOJ will never back off in my lifetime. And I understand. A lot of "experts" expect that when they hike rates the global markets will tumble on the "unwind of the Yen Carry trade" but I don't think this will happen. Sure maybe they hike rates & maybe some short term stuff brews, but real damage. The fears of "Reverse Yen Carry Trade" are overblown. Regardless, I will continue to stay away from Japan.
Gold & Crypto: As some of you know, I hate these assets & think they are garbage. Anyways, Gold I see going nowhere & Bitcoin will probably be a bullish bet as it becomes an important asset for crypto VCs in the US Govt.
Oil: No bull run this thing is sideways between 65 & 75 for the most part.
Great now lets dive into some themes which I think play out in upcoming years, not just this. Won't do a detailed write up because this is not sell-side research nor am I capable of writing those things. Just trying to vaguely pick up some things which I think might emerge. Now to be clear I don't think all of these will play out, just need some to. Mostly focused on India. Tried not to pick the mainstream things like AI or automation since that is on everyone's radar anyway:
1. Water (filtration, purification, infra). Aquaculture sensors, fish farming
2. Pet care
3. Eldercare
4. Energy (nuclear, power grid maintenance & building, waste management, AI, energy transmission)
5. MedTech (manufacturing, modernisation), Skincare Derma drugs
6. Aerospace/Defence
7. Heating, ventilation, and air conditioning (maintenance, supply, replacement)
8. Paper/Cardboards (rise of online delivery so increase in demand for this stuff for packaging)
9. Cyber security
10. Sellers of digital advertising
11. Travel: robust demand
I am looking to have investments related to above themes as I expect these to play out over upcoming years and decades. Fun exercise to do.
This is it for my 2024 recap & 2025 outlook. I hope it turns out to be a good year & we continue to improve.
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