Rajesh Chandra

US Economy is now in the 10 year of expansion. Calendar year Q4 of 2018 was devastating for the stock market which have put market participants in a cautious mode. Everyone is convinced that ‘Recession’ is inevitable but the only question is ‘when’. Currently unemployment rate is at 49 year low. Wages have started rising in US. WTI Crude oil futures have declined 40 % from the peak in October 2018 now trading at $45 per barrel. Lower energy prices give more purchasing power for consumers. GDP estimates for next 2 quarters are not negative yet. Tax Cuts & Jobs Act which became law in 2017 lowered corporate income tax from 35 % to 21 % and most personal tax returns will likely result in higher refunds. Inflation reported by CPI is hovering less than 3 %. It is hard to make a case for an obvious ‘recession’ in 2019 given these +ve data points. There will be interest rate hikes by FED in 2019. But depending on how fast FED hikes interest rates - Yield Curve can enter -ve zone very ...

I had recommended 2 portfolios. My ‘defensive’ or ‘safe’ portfolio had a loss of 3 % but I still beat the broad market which went down by 7 %. I included ‘consumer staples’ in my defensive portfolio. This sector wasn’t immune to broad scale declines without “ITA, IYK, VCSAX” which represent the same sector I would have been positive. “Aggressive” portfolio met with a 15 % decline. Uncertainties over trade wars with China hit CQQQ massively. 2018 was still a year which saw ‘net’ growth but declining numbers as the year closed in.

Inverted Yield Curve A hotly debated subject in the markets is the looming threat of inverted yield curve (difference between yields of short and long term treasury bills/notes). Inverted yield curve has successfully predicted the last 7 recessions since 1960. There are many experts who have argued that the current inverted yield curve doesn’t pose a risk to a decade old bull market. The reasons range from unusual demand for long term debt since European debt is yielding much lower or because US government is issuing more short term bills. Future of economy of course cannot be decided by one chart. Many leading indicators like global PMI, consumer/manufacturing confidence and others are positive and indicate continued growth in 2018. However, policy errors by FED could significantly invert the yield curve and we could be in recession. Of course, we will not know a year from now if there will be economic stagnation. Markets Lot of optimism generated from President Trump’s tax refo...

Sudden uncertainty at the end of 2016 due to President-Elect Trump made me go on the defense so I chose a very safe portfolio. The portfolio contained only 4 recommendations & after including the dividends the gain is close to 18.5 %. My portfolio narrowly beat SP 500 index! 2017 was a spectacular year for US markets. Every sector had positive returns. President Trump Stock market rallied 20 % and closed at historic highs. Was it a fluke, magic or exaggeration? Neither! Markets can be irrational but there is a good reason for a strong bull market. It is turning out that our current POTUS is the best thing that happened to US in a very long time. White house has made tremendous gains in every front right as promised during campaign. It has been less than a year since POTUS took oath. Some highlights: - Stock markets gained close to 20 % in single year & closed at record highs - Credited with elimination of ISIS from Syria & Northern Iraq - Cut funding for UN ope...

2016 delivered a shock election of President Elect Donald Trump. Elections in Europe set to dominate headlines in 2017. Anger is rising against islamic refugees in Europe - these conditions favor leaders like Marine Le Pen (of France) and Geert Wilders (of Holland) to win national elections. Germany is likely to shift to far right as well. This theme will be prevalent across Europe in 2017. Election of Donald Trump thaws the ice between US-Russia relations which can seen as a positive sign in the geopolitical scene in 2017. President Putin is undoubtedly the most powerful and decisive figure in the world as of today. It is in good interest of any nation to keep friendly relations with Russia. Russia made successful military gains in Syria, Iraq & Ukraine - with change of guard in Europe & US - the war against radical islam in Middle East is likely to expand more. President Trump seems very unpredictable as of now with regards with almost everything be it foreign policy or e...

President-Elect Trump beat all odds & got elected. This created an earthquake in bond markets leading to spiking of yields. My prediction of bond yields moving up softly was therefore incorrect as of Nov 9th, 2016. I recommended 4 tickers which yielded 13 % gain if bought on Jan 4th 2016 & sold on Dec 30th 2016 This portfolio beats broader S & P which grew only 10 % compared to 13 % of my portfolio!

- 2016 will be difficult year for stock markets with very limited gains, similar to 2015 - Federal Reserve has started tightening monetary policy but bond markets will continue to see strong inflows - Subsequent interest rate raises by Federal reserve will be at a very slow pace, yields on sovereign bonds will not move up rapidly primarily due to the safety perception of bonds compared to stocks - Even though the U1 unemployment is dropping, wage growth continues to be low which is why inflation will be tame, expect energy, food and other commodities to be continue to be low - Geo-politics will continue to make headlines throughout 2016. Russia is likely to maintain its gains in military diplomacy. Expect escalation of armed conflicts in Middle East. - In light of these highlights, I recommend to buy ITA - US dollar will continue to appreciate which will hurt foreign income of US based corporations - HEWG seems to be an attractive option to play the currency differentials - Pre...

This is analysis of the recommendations I made in my blog post below on 27th December 2014 #I computed the % assuming if you had invested on these tickers at market close on Jan 2nd, 2015 and sold all the holdings on Dec 31st, 2015 at market close A hypothetical portfolio of 7 stocks listed above if purchased at market close of Jan 2nd, 2015 would have yielded at profit of $2626 which is close to 8 %. I consider this a good success considering that broader stock market S&P actually lost close to 1 % and the blue chip index DOW 50 lost a little above 3 %. The only losing ticker would be PIN. I had high faith in performance of Indian bourses but did not pan out well. I also had recommended some investments which are likely to lose. Here is the summary of losing stocks which I recommended to stay away from. Gold, crude oil, junk bonds, treasury bonds, small caps were very bad losers. The ETF for Europe IEUR lost 3 % - I did get this right. I had also recommended to sell Japa...

Markets face headwinds from many areas - Weaker growth in China and Europe. Weaker corporate spending. Raising core interest rates. Geopolitical instability in Middle East and Russia. Aging bull markets since 2009. There are some positive developments which can propel further momentum - Falling crude oil prices will boost GDP in oil importing nations. Improving labor markets in US and increasing growth (even though slow). Keeping this mind: (1) Low gasoline prices is likely boost spending by low end wage earners: XLP is the top pick which is very safe way to play low gasoline prices (2)Health Care will remain in focus in 2015. Small cap index is likely to be very volatile but the gains could be substantial given that health care related spending will increase exponentially in coming years. PSCH is a small cap ETF (3) Exposure to emerging markets is a must. India seems on upward growth ladder, thanks to a dynamic new government which is bringing economic reforms. World Ba...

‘Global Warming’ has been a buzzword in political circles in this decade. The western world continues to churn out ‘doomsday prophecies’ of the world coming to an end if nothing is done to contain the greenhouse gases in atmosphere. Most of the western media claims of a consensus among climate scientists that the earth is heating up due to increase in carbon emissions caused by human activity. According to them rising temperatures of our planet will lead to dramatic rise in sea levels, floods, wide spread droughts, intense heat waves, powerful storms, etc. The very concept of ‘warming earth’ is flawed since genuine data suggests that earth temperatures are falling rather than rising. Greenhouse gases are composed of water vapor, carbon dioxide, methane, ozone and CFCs. Water vapor has more than 70 % contribution to greenhouse gases. The world is currently focused on carbon dioxide with actually constitutes less than 10 % and out of that less than 2 % is due to man-made causes. The ...

Three decades old military conflict precipitated on May 16, 2009 when the exuberant Lankan President Mahinda Rajapaksa declared unanimous victory over the LTTE rebels. After the civil war officially ended this day, the status quo in Northern Sri Lanka continues to be quite disturbing with thousands of Tamil civilians being driven shelter less and forced to survive in filthy conditions. A ruthless secessionist campaign led by the elusive warrior Velupillai Prabhakaran will leave indelible stories in the pages of history of island nation of Sri Lanka . LTTE was a saga of longest armed resistance thriving since 1976 against a democratic nation in entire Asia . The Tamil community in Sri Lanka is suffering from discrimination in all aspects from the majority Sinhalese since ages. The majority Buddhist population of Sri Lanka never acknowledged ‘Tamil’ identity. Sinhalese schools do not teach Tamil and Sri Lanka recognizes only Sinhala as their official language in spite of...

Barack Obama’s phenomenal and seminal victory in US presidential elections created ripples all over the world. A man of color and a person far less tried than many of his elders in his party but far more gifted politically had triumphed on the night of November 4, 2008. He is a political whiz-kid who radiates a gracious charm and is capable of inspiring rhetoric. Obama’s minority identity and his approach to transcend identity politics leave deep impression among Indian communities. Left-Liberals back in India had a celebration marked by unrestrained revelry unwary of the potential impediments for India. Obama’s message of ‘change’ is a cabinet full of ex-Clinton administration hawks. Old liberals from the old school are back and desperate to solve all world problems. The new administration has already set its imperial aims to win Afghanistan and to do so it needs Pakistan’s Army to co-operate. In one of the interviews Obama said “We should probably try to facilitate a better understan...

“Hillary left 18 million cracks in the highest, hardest glass ceiling in America , but it turns out the women of America aren’t finished yet, and we can shatter that glass ceiling once and for all”. These lines created waves in the political world and in mainstream America. Sarah Palin, a new face of GOP has redefined the rules of this neck and neck race. Sarah has been serving as the first female Governor of Alaska since December 2006 and before that she was the Mayor of Wasilla, Alaska for about 6 years. Nobody had inkling that John McCain would pick an average hockey mom, mother of five children, former beauty queen, life member of national rifle association and a moose hunter to be his running mate! Sarah, also known as “Xena” or “Sarah Barracuda” injects fresh blood in this Obama skewed presidential race. Her strength and determination to fight the odds stems from her strong sense of leadership qualities ingrained in her. Her career in politics kicked in 1996 with the race for...

Jerusalem ’s downtown Zion Square was inundated with people celebrating and dancing on the night of 14 th May, 2008. It is a day on which millions of Jews found a ‘home’. It was the day when the great nation of ISRAEL took birth after Great Britian terminated its mandate over Palestine . It took lot of blood to create this nation. Jews single handedly triumphed in 1948 against the Arab army comprising of Egypt , Syria , Jordan , Yemen , Saudi Arabia , Iraq & Lebanon . Destitute Jews pouring into newly created Israel from North Africa, Europe and other Arab nations were successfully absorbed and integrated into Israel which went on to evolve as an economic and military superpower in Middle-Eastern region. As of this year, democratic and sovereign Israel completes 60 years of independence or existence. Fortitude and perseverance of Israelites to exist and thrive after centuries of virulent animosity and fanaticism from anti-Semitic people astounds me. The threat to this...

Foreign students have always been instrumental in spurring a cultural and technological revolution in the US . International students not only bring ‘hopes’ and ‘dreams’ but also a major economic boost to the US . According to a report from the Institute of International Education , foreign students brought in a total of $14.7 billion to the US economy from their home countries to pay for tuition fees and living expenses in the year 2006-07. The US continues to attract lot of hopefuls from hundreds of countries. The number of students enrolling in US universities is soaring every year. The largest numbers of students to the US are from India followed by China . The procedure to fly to the US for graduate studies is quite tedious and cumbersome. A 4-year degree is usually required to pursue a graduate degree in US. The first and foremost step is to appear for GRE ( www.gre.org ) and TOEFL ( www.toefl.org ) since most US universities require applicants to have taken both the t...