October 4, 2020 @ 11:30 AM – 12:30 PM
Tej Shah, Portfolio Manager – Marcellus
Its been 4 times in the history of the last 4 decades when the US recession coincided with a 50% or more fall in crude oil price. This happened in Years – 1983-85, 1990-91, 1997-1999, 2007-2009. Whenever this scenario occurs, the money supply goes up, leading to fall in bond yields. This leads to fall in interest rates. And every time this happening of all these events has a positive impact on India’s economy, in the form of either economic recovery or economic growth as these events lead to an increase in GDP by 3 to 3.5%. And, this economic recovery benefits financial companies the most. But, the period before economic recovery leads to many imbalances in many financial services companies as well. Thus, before recovery occurs, some companies in this sector are unable to survive, some are barely able to survive, but, some actually not only survive but also take advantage and increase their market share. And, when recovery occurs, those which survive and those which increase market share actually thrive.
The same has happened 5th time now, during the COVID crises.
The fall in crude oil prices followed by the rise in bond yields is followed by the fall in interest rates. This should be now followed by an increase in GDP and economic recovery over 1 Year.
Marcellus Kings of Capital is Financial Services Focused Portfolio Management Service which is striving to participate in the expected economic recovery.
WISH TO MAKE INFORMED INVESTMENTS FOR LONG TERM WEALTH CREATION
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