1 from The Road August 2022

#1fromTheRoad

Unintended Bias and Turning of Tables.

First things first, there is no such word as Unintended bias, I just coined it. Even the most evolves thinkers suffer from biases. Lesser mortals like me, who know such biases exist and try to work through them, too suffer from some biases or others.

During the recent road shows, meeting people managing large institution money whom i would like to classify as evolved people. I was surprised to see that even these people were suffering from Extrapolation bias.

The Inflation overhang was so bad that, it was the only thing on their mind. We were prepared for this and the reaction to our responses were smiles, surprised, few eureka moments as well.

More the inflations is raging its head in developed nations and majorly western part of the Globe, more these economies look like emerging economies and making Emerging markets looks better.

Developed economies running huge debt, raging inflation, high fiscal deficits increasing bond yields no doubt are on the job to clear the mess and preparing for a bright sunny days ahead, but the Night is only getting darker before the Sunrise.

History suggests that Inflation has changed regimes ignited civil wars, we saw that in 2011 to 2013 in our own country, but thats where it ends.

Western nations have an entire generation which hasnt seen Inflation except in Books, and series of Central Bankers who only focussed and may be only trained to focus on growth and Inflations may be was pushed to last chapters or footnotes.

India has experince in handling inflation which is recurring and ss recent as 2011-2013. Our Inflation is largely food based, with some amount of seasonality owing to supply chain disruptions during monsoon. Where staples' prices are controlled by Govt through MSPs , the larger variables are still under control.

GST, has been a boon, with buyoant tax collections govt has used to cushion to cut down on excise further reducing fuel cost which is approx 17% contribution to Inflation and waterfall effect on all other components.The response gave lot of confidence to the Investors.

I must mention that buyouancy around India is pretty strong and there is lot of Interest in India, once economies get their house in order, we should be recipient of massive inflows mostly of long term money in India.

Till then we will be on Roads (not literally, but literally ...raising money)

#emergingmarkets?#job?#FII?#longterminvestment?#GlobalInvestors?#ontheroad

Photo Credit : Self