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  Year 2023 started very strong for US equity market but does this rally has legs to continue. Pondering on the same question happy yto share observations on US economy and markets which you may find value. Current Narrative: At present equity market narrative is dominated by better-than-expected economic data of Europe, China Re-Opening and Immaculate Disinflation in US. Elaborating further equity markets are expecting a scenario where Inflation in US comes down along with growth, but without breaking system or at least economy will not go in deep recession. This will help FED to pivot an allow interest rate to come down and risk assets will do well in this scenario. This trade started in October creating rebound in US equities and drawing more and more participants into it. There are few data points and observation which are in contrast with current narrative. Observations Growth Sales growth remained strong at 11% in Q3 and remained firmly above trend line indicati...

  [ 9th Feb 2023 ] US economy is poised at interesting cross-roads. While inflation is coming down growth data is holding up. FED has been less hawkish on one day and more than less hawkish on another. And perhaps most of the economist are at best can be described as “Cautiously Pessimistic”. As they say if US goes into recession this year it will be most pre-announced recession in recent times. With this pretext how various factors are stacking up: Fundamental Data US data holding strong, deterioration in cyclical data. Europe and China data picking up. Most Imbalanced Labor market condition. Still Quarterly County Survey holding strong for labor market. There are 54 lacs employees who have left labor market. In line with inflation wage growth has soften a bit to 4.4%. ISM Non-Manufacturing surprise on upside. Number jumped from 43 to 60. Number greater than 50 is expansion in activity. Monetary Cycle Fed may pause b...

 [ This article was written on 19th January - Posting for record ] Lyndsell Train is value focus asset manager which focuses on protecting the real value of client’s capital for long period of time. They believe “Survivability” is the key criteria for any Investment Practice. 1 In its latest newsletter “The Triumph of Experience Over Hope “ 2 portfolio manager James Bullock builds a case for very low churn equity portfolio having companies which has survived more than 100 years. Here are few highlights of his portfolio: ·        Portfolio consists of 24 stocks. ·        Out of 24 companies in portfolio 16 companies are in existence more than 100 years. ·        Fund has sold only 4 companies since last 11 years. In an insightful article James Bullock, Portfolio Manager- Lyndsell Train addresses most important question before Investor: Is there any advantage to be gained investing in a compan...