Andrew Stotz was interviewed by ETNOW on global markets and Asian equity markets in particular. Parts of the interview was transcribed and published by The Economic Times:
The first thing is that we have to make a bet or decision about what is going to happen with the US and my conclusion at this point is that the US is headed for a fall and that fall could come may be in three months or six months. The valuation is so high that it is hard to see that Donald Trump is going to be able to push that market up further through his actions. The biggest issue that we have to content with is the fact that the overall stock market has been driven by almost a decade of almost zero interest rates.
The biggest issue that America is faced is they have a huge amount of government debt that is equal to the GDP of the country and it has been financed at about 1.7%. As interest rates start to rise as the Fed is starting to do, what is going to happen is that the burden on the federal government is going to get high plus higher interest rates means falling stock market.
As far as India is concerned, it is an attractive market. I look at attractive versus unattractive based upon what I call my FVMR or methodology which is just looking at the stocks and the markets from four areas – from fundamentals, valuation, momentum and risk point of views. India does come up as being a pretty attractive market. Even though it is a little bit expensive, you are getting a pretty good ROE and pretty earnings growth. The demographics of India are so powerful with strong growth in population and with a low level of GDP per capita, that there is plenty to go.
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