Black Swan on horizon?

Black Swan Definition from Investopedia:

A black swan is an unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan events are characterized by their extreme rarity, their severe impact, and the practice of explaining widespread failure to predict them as simple folly in hindsight.

From Markets point of view, there are two events in 2020 which could match the above definition:

Coronavirus becoming Pandemic:
Based on weekend news, the virus has already spread in South Korea, Italy and to some extent Japan. While China is putting extra-ordinary measures to stabilize the situation, other countries are just gearing up to potentially deal with unfolding situation. This means lock down of cities, travel restrictions, cancellations of trade shows and major gatherings to control the potential of spread. Companies have been prudent in cancelling major shows like MWC (Mobile World Congress) and many others. Markets was expecting this to stabilize within few weeks and getting signs that China's measures are working and net new cases have come down significantly. However markets have not taken into account spread beyond China. Economic impact was also supposed to be contained with China. Now most likely world economy in Q1 would be barely positive and potentially slide into negative territory if the spread continues into Q2. Friday yields on 30 year treasury reached all time lows. Bond markets are flashing red signaling trouble ahead. Central banks (US FED being most important) need to gear up for rate cuts and get ahead of the curve before deflation takes hold. Won't be surprised if US Fed declares surprise rate cut in 2020.

Sanders winning Presidency:
Given the primary/caucus voting in first three states, Sanders have momentum and have more than 50% chance of winning democratic nomination unless all other candidates rally behind centrist alternative like Bloomberg. In next 10 days (till Super Tuesday), democratic nomination race would be reduced to 2-3 candidates with clear choice between socialist Sanders vs centrist/capitalist Bloomberg. Young generation (including my kids) are going for Sanders while older voters (like me) would prefer someone like Bloomberg. It would almost feel like: do you want to change the complete system (revolution) vs incrementally improve (evolution). If Sanders wins nomination, it would be a battle between left vs right. Markets have not incorporated the possibility of Sanders presidency (same way it did not consider Trump Presidency in 2016). 

Given the real possibilities of these two events, watch out if you are considering any new investments. 

/Shyam

Oscars, Democrats and Tesla!

Oscars have come early this year. The Academy had moved the event from last week of Feb to 2nd Sunday of Feb to potentially reverse the decline in viewership in changing world of entertainment. This year's Oscars would be interesting for few reasons:

• Netflix has arrived on Hollywood: Netflix has highest number of nominations (more than Disney). Last year it came very close to winning best picture with Roma. This year it has couple of strong contenders (Marriage Story, The Irishmen) but most likely actual wins would be very limited if at all
• First time a foreign language film (Parasite) is nominated for main category of best picture
• The slate for best picture is varied from two world war movies (1917, Jojo Rabbit) to period dramas (Little Women, Once Upon a time, Ford vs Ferrari) to Comic adaptation (Joker)

Here are my predictions for 6 main categories.

• Best Picture: 1917 (even though Parasite deserves to win. Since Parasite will win Best Foreign Film category, Academy voters will vote for 1917 for best picture)
• Director: Bong Joon Ho (Parasite). He deserves to win since even as foreign language film, he had done such a great job directing that language is not barrier at all. It's rare that best picture and director awards get split but last year Academy had done it with directing award going to Roma. I hope it happens this year also
• Actor: Joaquin Phoenix (Joker)
• Actress: Renee Zellwegar (Judy)
• Actor in supporting role: Brad Pitt (Once upon a time in Hollywood). Al Pacino (The Irishmen) could also surprise in the category
• Actress in supporting role: Laura Dern (Marriage Story). Florence Pugh (The Little Women) could surprise. She had acted well.

Parasite should also win Editing and Original Screenplay Oscars.

Moving onto rest of the big news:

Democrats had a bad week starting with Speaker Pelosi tearing up State of the Union speech in front of TV audience. While she may not agree with President Trump's policies or claims, that was disrespectful and childish since the speech did had stories of many many Americans. I am sure Trump would weaponize that snippet during elections but Pelosi should not have given him that chance. Finally the Impeachment drama is over - it was necessary drama. Senator Mitt Romney established himself as independent voice much on the lines of McCain. If only Mitt was running for nomination on democratic ticket. That brings us to mess in Iowa Caucus. Democrats could not even run a successful caucus of a small state. Come on, how difficult it can be? Maybe Indian election commission should give some training to them since they are used to conducting many complex elections every six months. The week wrapped up with debate among candidates just before NH primary. I am not inspired by any of the candidates on stage. Another 4 weeks before Super Tuesday when I need to decide whom to vote for democratic nomination. The only viable choice right now seems to be Bloomberg.

Tesla stock had a wild week. I had wrote about Tesla multiple times in last few years. Here are relevant bogs from 2013 and 2017

Tesla = Apple of Cars? (2013: Stock price: $50)

Should Apple buy Tesla? (2014: Stock price: $150)

Tesla: Car company or Tech company! (2017: $250)

Today's stock price: $750

Markets are trying to still figure out how to value Tesla. In fact in 2014 blog, I predicted Tesla stock would be worth $1000 (M-cap: $200 Billion) in 5 years time-frame. It almost reached that target last week. Now that stock is at $750, what should one do? Is it bubble like Bitcoin of 2017 (or so many bubbles of past) or would be like Netflix or Amazon where these companies changed the landscape of complete industries and grown into the valuations. Tesla is disrupting one of the biggest industry with the foundation of technology. So if it does not stumble in scaling up its production, distribution and keep it's technological edge, you are potentially looking at similar trajectory as Netflix/Amazon. So decide fo yourself since this stock is not for the faint of heart!

Enjoy the Oscars Evening!

/Shyam

49ers SuperBowl Wins and Markets!

America's National Sports Day (also called SuperBowl) is here! Nearly 100 million plus Americans will be glued to their TV sets on Sunday afternoon to watch history in making (will explain later) as well as advertisements which cost $5.6 million for 30 seconds and JLo/Shkira performances during half-time! There would be Super Bowl parties, tailgate parties, and so on. This year is special for multiple reasons:

• After long time, Patriots are not in SuperBowl. Instead two most exciting teams are playing.
• If KCC wins, it would be their win after 50 years; If 49ers win (which is what everyone in bay area is rooting for), it would be their first win in 25 years - that's why this is historical!
• First time, sports betting in 18 states is legal so Americans will be betting over $6 billion on anything related to SuperBowl (even how long Demi Lavato's Anthem performance will take in seconds)
• 49ers would match the record of most SB wins (6 if they win)
• KCC's last win was when Patrick Mahomes' (KCC QB) father was also not born. I am sure Kansas City have been waiting for this for longest time

What about stock markets? Let's look at how market returns were in previous 5 49er's wins.

• 1982 - 14.76%
• 1985 - 26.33%
• 1989 - 27.23%
• 1990 - minus 6.56%
• 1995 - 34.11%

That means 49ers SB win can predict above average double-digit market returns 80% of time!

I know this is not at all scientific. But hey, I want America to root for underdogs 49ers to win SuperBowl. Sorry KCC - when you won last time (1970), markets barely broke even (.10%) and none of us want that.

Given the recent market turmoil due to spread of coronavirus impacting China and world economy, potential surprise win by Sanders in Iowa caucus and bear market in commodities, investors are anxious. Suddenly the narrative has changed at least last week. But that may be short-term. Impeachment drama will be over next week. After Iowa, Biden may resume his momentum assuring markets that leftist candidates (Sanders and Warren) will not get democratic candidacy. So if you are looking for potential bottom, it may come early next week. During this churn, Semi and biotech ETF (SMH and XBI) provide good entry point as they would recover quickly when markets resume it's upward trend.

That's all for now. Enjoy the SuperBowl and Go 49ers!

/Shyam

Go 49ers!

MLK weekend is becoming a sports weekend. India won 3rd deciding cricket ODI against Australia. 49ers won NFC championship to claim their rightful place in Super Bowl and KC Chiefs got their chance to appear in Super Bowl after 50 years. Overall weekend was filled with lots of sports watching. This year's Super Bowl will create history since it would be first win for 49ers after 25 years and first one for Chiefs in 50 years. Both teams have exciting, young and upcoming quarterbacks who are willing to play their own games of rushing (sometimes themselves making touchdown) and occasionally college football type hail-mary passes. It would be fun to watch the game (and advertisements and JLO/Shaikra half-time show). Of course we all in Bay Area know who is going to win. Go Niners and Make History!

Let's look at how first month of new year is shaping. First phase of trade deal between US and China is signed with all the fanfare. Same day house sent Articles of Impeachment to Senate for trial with its own fanfare. USMCA is passed in senate. Earnings are great - especially by big banks. Next two weeks would be the climax of earnings with tech heavy-weights announcing from this week. Markets are liking what's  happening in economy, earnings and interest rates. It's only 2 full weeks and markets are already up by 2-3%. The momentum would continue for another 2-3 weeks before 2020 election blues take over. DOW wants to break 30000 and S&P wants to touch 3400 before taking pause. So if you are thinking of what should one do, I would say, stay invested in index funds (SPY) and let it do the work. If you want some peace of mind after having great year in your portfolios, its ok to take some profits and keep it in cash. It all depends on individual risk/reward profile. 

For the daring souls, let's take a look at one binary high risk/reward stock: Sprint (S: $4.8)

I am sure everyone knows that T-mobile and Sprint have proposed to merge. US justice dept and FCC  have approved the merger. On other side, 13 states have brought suite against the merger arguing that it would reduce the competition and increase the prices in long-run. All depends on outcome of this trial. The terms of deal would entitle Sprint shareholders to receive .102 T-mobile shares ($8.36 base don current T-mobile stock price). That means at current prices, Sprint shares are trading at 65-70% discount to merger value. That means market players put the probability of deal going thru very low. Here is my hypothesis on why merger will go thru:

• Combined T-Mobile and Sprint would be a much stronger competition to AT&T and Verizon
• Combined company would have resources to invest in significant capital expenditure for 5G roll out
• T-mobile has established itself as price carrier offering value at slightly lower prices than its two bigger competitors
• With Google, Comcast, Dish, there is new emerging competition. It's matter of time when Amazon offers wireless plans to its prime subscribers.
• Sprint as standalone company may not survive after 5-7 years effectively reducing competition (which is the argument states are making to oppose the deal)

So I put the odds of deal going thru at more than 65-70%. Judge presiding wants to wrap up the trial by Feb. So it's possible that one could make or lose 40-50% in next 4-6 weeks if one is willing to take the risk. That's the pick of the week for Risk/Reward Category! 

Usual disclaimer: Do your own research and then ONLY decide to invest or not. Personally I will recommend to stay with index funds.

Enjoy the Super Bowl and Go 49ers!

/Shyam

2020!

100 years back, decade of 20's was called roaring 20's till depression started in 1929. Looking at markets in 2019, it feels like repeat of 90's or start of another decade of roaring 20's? Well - we have to wait few years to see how this decade rolls.

Since this is first blog of the new year, it's time to look back and see how the recommendations of "BEST" of New Year 2019 did?

BEST represented Biotech, Energy, Social/Streaming/Semi and Technology. Looking at companies I recommended, if one has invested equal amount of money at prices recommended and held till end of 2019, the portfolio collectively would have returned close to 60% (which is twice of S&P return). Did I just got lucky in identifying 75% winners like ROKU (360%), AAPL (100%), MSFT (60%), DIS (40%), AMD (180%) and so on. There were losers mostly in energy sector like OAS (-36%), RIG (6%), NKTR (-36%). However winners did much better than losers to create a combined return of over 60%. I think it was partially timing, picking up stocks in beaten down sectors like semi and overall out performance by technology and of course some luck. I am sure it would be very difficult to repeat this in 2020 or for that matter for any other year.

On Macro fronts, my predictions were less on the mark - partially due to changing of stance by Fed. 

Let's look at new year 2020 macro predictions and 20 stock recommendations.

Macro predictions:

• US GDP growth of 1.75 to 2.5% (so no recession in 2020)
• 10 year interest rates: 1.6 to 2.4% (2% seems to be new normal)
• US Unemployment rate: 3.3 to 4.4% (lowest unemployment trend continue)
• No interest rate changes by Fed all year (Fed can go on long vacation)
• S&P: 3400 to 3450 
• US China trade was subsiding with phase 1 done and phase 2 discussions ongoing
• US-Iran geo-political war-of-words continue without actual war
• Biden or Bloomberg becoming democrat nominee but President Trump winning 2nd term

Stock recommendations:

I am sticking with BEST theme with small changes: Biotech, Entertainment, Software/Semi and Turnaround

• Biotech: With personalized medicines, advance of gene therapies to treat rare diseases and finally some breakthrough for Alzheimer are the themes while picking up these
• CLVS ($10), SAGE ($70), BIIB ($280), MYGN ($25), NKTR ($19)
• Entertainment: Last decade started the journey of streaming which has led to most media companies finally adopting it. Entertainment is going thru profound changes and right now is the time to take long view. Also the lines between media and technology are blurring.
• NFLX ($300), DIS ($140), AAPL ($280), ROKU ($125)
• ETF: ETF is good way to get exposure to BEST sectors. So here are few worth considering.
• Software: IGV ($225)
• Biotech: XBI ($90)
• Semi: SMH ($130)
• Defense and Aerospace: ITA ($220)
• Software/Semi: Cloud based software hosting and delivery has been big theme last decade and it's only gaining more momentum. Semis continue their record run and has more room to run. Cloud based security is going to be another big theme.
• AMZN ($1800), MSFT ($145), ZS ($43), AMD ($44)
• Turnaround: This is a new category in BEST but worth considering. Many marquee names have been beaten down due to company specific issues. As long as these companies survive, there is good case to be made to invest
• GE ($11), NTNX ($30), NIO ($3.3)

Note that I have intentionally provided target buy prices which are lower than what they are trading  because I strongly believe that markets are frothy right now and in first quarter, there would be enough opportunities to buy these recommendations at prices mentioned. So one has to be just patient   and disciplined in his/her investing strategy. As always, usual disclaimers apply. Do your own due diligence before investing.

That's all for now. Now when it comes to Super Bowl, I am happy that 49ers are in playoffs and have very good shot in making all the way.

Happy New Year 2020!

/Shyam

The Week of Climax!

Once in a while a week comes when so many events line up that it feels like we are reaching climax of many! Next week feels like that.  Let's look at some of the events which could reach climax

Finals Week:

Since both my kids are in college, I know when is Finals Week and what it means. Next week is finals week for them (one of the final is on today Sunday - who schedules final exams on Sunday?) Knowing the pressure of finals and maintaining grades, I am only imagine the relief these kids will have at end of week. I am definitely looking forward to seeing smiles on their faces after finals are over!

Trade-War:

While President Trump may say that there is no deadline, he has to make a call if he plans to put tariffs on rest of Chinese imports (including iPhones) on Dec 15 or not. That would give a signal to world if phase 1 deal is near or would continue what has been going on for last 12-18 months. So in a way, Dec 15 would be a day of climax for trade war between US and China. This would also be market moving event.

Brexit:

After 3 and half years of countless negotiations, potential deals, failed votes in UK parliament, 3 prime ministers and as many elections, it has come down to Dec 12 elections. This election is almost like re-referendum on Brexit. UK citizens have a choice if they want Brexit or not and accordingly vote. The only good thing is that finally this Brexit drama would be over - hope so since you can never predict what UK politicians may do.

Fed Meeting:

Fed is having its last meeting of 2019 to decide interest rate direction. Exactly 12 months back, Fed spooked market by increasing the rate in last meeting of 2018 and giving indication that more increases are coming. What a difference 12 months make?  Fed not only changed the course but reduced interest rates 3 times since then. This meeting would be less dramatic. Fed would stay the course of pause given mixed signals on economy, employment and inflation. Most likely 2020 FED meetings would be "no event or do nothing" and that would be a good thing.

Economy and Markets:

Economic signals are mixed. Both Manufacturing and services readings are below expectations signaling potential trouble in making. Inflation is low. Employment is again at 50 year low with Nov employment report is strongest in many months. Holiday shopping season started with a bang (even though crowds in malls are noticeably less - that means online shopping is really becoming mainstream). Markets are generally reacting positively and are up by 28% till date in 2019. Another 2-3% increase and it will beat 2013 record. With best month for markets underway, S&P can touch 3200 before year end (my prediction was 3100 few weeks back). 

So let's wrap these climax events and get ready for holidays. My next update would be in new year with 20 recommendations for 2020!

Happy Holidays!

/Shyam

Unicorns: Hope, Hype and Reality!

Unicorn which is supposed to be rare is known to many people working in tech or general investment community. Let's look at Wikipedia definition: The unicorn is a legendary creature that has been described since antiquity as a beast with a single large, pointed, spiraling horn projecting from its forehead. In private market (per-IPO) unicorn means startup which has billion $ valuation before IPO. This used to be very rare and hence association with unicorn! Based on latest Google search, there are over 300 "unicorns" (it used to around 100 in 2015). Let's look at journey of these unicorns from "Hope, Hype and Reality"!

Hope:
By definition, startups are all about hope of starting something new, changing the industry and world and improving lives of billion people. They are also about dreams of founders and employees to make big in terms of monetary rewards. VC community is able to fund these with initial capital, guidance and groom them to become unicorn in hopes of multiple times return on their investment. Common people also get excited when they read the stories of college dropouts becoming billionaire and richest people on planet. They can see that anyone with dreams can make it big without inheritance (like old times). Investing community ride their hopes on potential to participate in outsized returns like they have done in last 2-3 decades by investing in Amazon, Microsoft, Apple, Google and so on! So hopes all around....

Hype:
The companies start getting their products/services out which start getting wide-scale adoption. The heady triple-digit growth (albeit on very small base) get everyone excited and every financing round becomes a news. In span of 2-3 years, private valuations from millions to billions making them "unicorns". The excitement continues since many VCs join later financing rounds at every higher valuations reaching the climax of valuations of tens of billions (WeWork at $47B, Juul at $38B and so on). In this phase profits don't matter. As they say, growth at any cost becomes the only mantra! Companies start expanding in new markets because it feels like nothing will go wrong. Founders start getting coverage in magazines and start flying in private jets. And then..... the phase of reality starts!

Reality:
In this phase, suddenly profits matter and law of large numbers start catching up. Growth slows from triple digits to under 30%. Founders start cashing out in ever increasing valuation rounds. IPO talks start because "profit at all costs" need new funding and VC funding dries up. Employees want to cash out.  The new markets do not pan out and companies remain "single pony trick" (no wonder Unicorn has only one horn). Despite all these challenges, IPO happen and first day pop happens. And then over next six months, gravity brings down stock to below IPO price. Lockups expire and employees start cashing out even if stock if 50% below their post-IPO highs. Many times, change of management (including CEO) happen. The vision evolves from "changing the world" to "making profits" and "survival". And then the real winners  (like Microsoft, Apple, Amazon, Salesforce, Facebook, Google, Netflix) emerge which really change the way world works!

Looking at current set of companies, Uber seems to have gone thru all three phases and has most potential to survive and prosper. Because it is changing the way we commute!

/Shyam

Chips and Clouds!

First of all, Happy Diwali - Festival of Lights to all my readers. Its' climax of series of Indian Festivals which start at end of summer and is considered biggest Indian festival. It's 5 day festival which also marks start of new Hindu calendar year! On eve of such festival which celebrates Lakshmi (Goddess of Wealth), S&P is within inches of reaching all time high. I am sure it will reach new highs next week on its way to 3100 as seasonal Santa Rally gets underway.
So what changed in supposed scary October month? As in Halloween, markets have been playing "tricks" on investors with scare of upcoming recession but at same time "treating" patient investors for just staying invested. 2019 is turning out to be one of best year of returns with S&P returning over 20%. It does not feel that way due to recent drubbing software/cloud stocks took. That brings me to today's topic of Chips & Clouds!

Chips:
You can read this blog eating Chips and Salsa but you know what I really mean by chips. Semiconductors are generally referred as "chips". In product development we also use term called "Chip to Ship" means how long it takes when we get key "chip (ASIC)" to when we can "ship" final product. The semi stocks took drubbing in early year with MU, NVDA, TXN, QCOM and even Intel falling off 20-50% on fears of inventory overhang, slowing cloud spending, delays in 5G/IOT/AR/VR and generally no major game changing device/application on horizon. While all of these played out as predicted during the year, semiconductor companies have been adjusting their capital spending and investments to address these (in past these companies used to go thru boom and bust cycles every few years). They were able to burn down the inventory, introduce incrementally improved offerings. At same time, cloud spending is slowly ramping up and iPhone11 seems to be doing well (no wonder Apple stock has gained 50% in 2019). As phones are becoming cameras (and very good ones), they would need faster CPU, more memory, more storage and better image processors. All of these are provided by "chip" companies. Semiconductor ETF SMH is all time high and will continue to do well in 2020! My favorites in this sector are MU, AMD, INTC, AMAT and beaten down NVDA. But I would recommend to just go with SMH.

Clouds:
Cloud companies span from cloud providers like Amazon, Microsoft to cloud software providers (SAAS) like Salesforce, Splunk, MongoDB, Zscaler or recent IPOs like MDLA, Pagerduty, HCAT and so on. There must be over 100 companies one can choose from. The line between enterprise software, cloud/SAAS providers or even security providers is vanishing since almost all software players are moving to delivering their software over Cloud. Salesforce pioneered this and Adobe showed the path of how traditional software players can transition to this model. Microsoft did same with Office365. In last 8-12 weeks, stocks of many of these companies took hit bringing their valuations down by 20-50% - almost exactly what happened to Chip companies in Spring. So is it time to consider investing in this sector? Let's look at secular trend. This week one most important news came out was "Pentagon awarding $10 Billion cloud deal to Microsoft". While Microsoft is direct winner of this, IMO all cloud companies (even Amazon who supposedly lost Pentagon deal) are winners. If one of the most secretive organization in world can trust cloud for its IT operations, why not banks, retailers and other government agencies? The trend is almost as powerful as Internet trend in late 90's. That means double digit growth of cloud companies would continue in next decade (at expense of traditional IT players). And it's still relatively early to jump on this trend and reach the state of Cloud9! My personal favorites in this sector are NTNX, MDLA, HCAT, SPLK, NOW, WDAY and of course MSFT! But best way to invest would be thru IGV (ETF)

Happy Halloween!
/Shyam

"Bet" (BREXIT, EARNINGS, TRADE) ing Season!

October is known for market moving events since most of the big downward moves (1929, 1987, 2008) have happened in Oct. Why Oct?  It could be Autumn Blues or upcoming time change with Fall Back, Back to school season... There are many potential topics for behavior finance scientists to study and may get some doctorates. This year's October started with its usual volatility in first week due to inflation and not-so-good manufacturing and services sector confidence readings. Second week  gave some positive signals on trade talks bringing back markets. Now let's look at events for remaining part of October.  All of these events again could impact markets!

Brexit:
Finally the deadline of Oct 31 is almost here and that has forced UK and EU to seriously talk to each other on some kind of deal - including the question of hard vs soft customs border between UK and N. Ireland. It will come down to the wire but my guess is that either deadline will be extended by another 3 months or some kind of Phase 1 of deal would be in place. Either way it would be good since crashing out of EU without a deal could seriously jeopardize the confidence in UK and extend it across EU and World Economy does not need yet another uncertainty.

Earnings:
Next week earnings season should kick off with full force with Netflix and many major banks announcing earnings. The expectations have been lowered across the board. So earnings would play out similar to what's happening over last few quarters. Companies after companies would beat already lowered earnings and give slightly cautious-to-upbeat forecasts with caveats of trade deal, interest rate direction and so on. Basically companies will talk about external factors and still boast how they are doing well despite these challenges (which is true by the way). Markets would react positively to the companies who guide higher and severely punish who miss on guidance even slightly. I call it as putting them in "penalty box" for couple of quarters. Many cloud/SAAS companies including some of the recent IPOs have reset their valuations. So these companies would go up if they can maintain double digit growths. I like the potential of HCAT, MDLA, NTNX and MRNA.

Trade:
President Trump is learning the art of "phasing" from Silicon Valley (even if he hates California and valley). It was very evident from his supposedly trade deal, Basically he announced BVP (barely viable product) and told his trade representatives to write "PRD" over next three weeks for phase 1 of the deal. At same time he also said that we have started work on phase 2 of trade deal. As we all know this seems like any product development in high-tech. I am sure there would be phases 3...n. But either way it's positive signal that something is happening and risk of increased tariffs has gone down significantly.

There are couple of other factors which one need to watch out. Interest rate direction in Fed meeting at end of Oct and Election results in Argentina. More on that some other time!
/Shyam

Is IPO party over?

2019 was supposed to be multi-billion unicorns coming out to markets with big bang with their stocks going up by 50% plus on first day. But suddenly these unicorns are finding that staying private was much easier than public scrutiny on their books. WeWork had to cancel it's IPO because valuation it was getting was nearly 70% below last valuation of $47Billion. Uber and Lyft also had to reduce their valuations and they are further down by 30-40%. Peleton is down by 15% since their IPO price. Slack is down by 40% since opening day price. There are few exceptions like Zoom and Guardant Health. But generally mood is downbeat. Is IPO market having Autumn Blues or is this the start of trend similar to what we saw in late cycle during dot.com bubble? It feels very much like late 90's - similarities are too many to ignore. Let's look at them

• Longest economic cycles (1991-2001 and 2009-2019). So the economic cycle is getting tired and markets are betting that recession is in sight
• Federal bank policy of interest rate cuts to keep the expansion going as much as possible
• Cheap money due to low interest rates
• Currency crisis - Russian ruble, East Asian currencies and now Argentine Peso (and currencies of many emerging countries)
• And of course Impeachment - The tables have turned. Republicans were going after Clinton and now Democrats are going after Trump. In modern times, every 20-25 years, US gets a President which does something illegal (Nixon, Clinton and now Trump) and country had to go thru Impeachment drama!

Markets have returned barely 3% since Jan 2018 and are just about 3% below all time highs reached in July 2019. So what's in store for last quarter of 2019? Would it be as scary as last quarter of 2018 or will it be sane as last quarter of 2017? Looking at events in October - Q3 earnings, Brexit, Elections in Argentina, continuous back-n-forth trade war drama, Impeachment, Biden getting hunted out of democratic nomination race due to his son's involvement in Ukraine (his son's name happens to be Hunter!) and Warren becoming leading democratic candidate. Lots of potential market moving events. So IMO, October would be rough and then markets would be mix of 2017 and 2018.

Happy Navratri!

/Shyam

Tweets, Trade and Treasuries!

Three T's are driving the market sentiment and ups and downs (two of them are caused by another T). After increased volatility in which DOW was going up and down by 300-800 points on regular basis. August wrapped up where it started. So if you were enjoying your summer vacation without looking at daily ups-and-downs, you did not miss anything. Let's look at each of the T's and see where market is heading for rest of the year and 2020.

Tweets:
Tweets are the new norm on how policies are made and communicated on the fly. You know whom I am referring to. President Trump had almost made this as norm. I am sure his twitter followers know what's in his mind before his chief-of-staff. His decision on additional 5% tariffs on China, his constant criticism of Fed Chair Jay Powell or his supposed offer to mediate between India and Pakistan and his "hereby" order to American companies to move their production to USA - all of these would have been carefully thought and communicated in previous administrations. But hey, Trump is not a "normal" president and given everyone is "twitter" happy, President is just following how today's world is operating. How many of us still write letters and make a phone call to wish, congratulate or console instead of just sending a WhatsApp message? So we have to get used to policy by "tweets"

Trade:
What started as skirmish between US and China is turning out to be a potentially full-fledged trade war. Last December after Trump and Xi meeting at G20, many thought that by early 2019, trade war would be over. However after some back and forth discussions, the intensity of barbs and tit-for-that tariffs seem to be increasing. While actual trade $$ amount (~$600 Billion in combined GDP of $35 trillion) is small, the impact on sentiment is dis-proportionate. And when it comes to markets, sometimes sentiment and confidence matters more than actual numbers.

Treasuries:
It's no secret that Trump does not like Fed and it's chairman Jay Powell (whom Trump appointed). However Fed being independent institution is doing its best in ignoring Trump tweets and comments and that's good for economy and markets. At start of year, many pundits were predicting 10 year rate to be near 3% and Fed planning 3-4 interest rate hikes (I am no market pundit but I was expecting same). What changed suddenly that 10 year is yielding 1.5% and Fed is on his path to do 3-4 interest rate cuts? No one knows the answer. Rest of the developed world is swimming in negative yield. German Government is getting paid to buy it's bonds. Italy which does not even have a functioning government is able to issue bonds at 1% (lower than US government). UK is mired in Brexit mess and impacting overall sentiment in EU (watch out for British Halloween on Oct 31).  Emerging countries are mess with Argentina on verge of default and slowing economies in China and India. It's ridiculous  out there and shows that there is no better place than US to park your money and still earn small but positive return. No wonder world money is coming to US treasuries even at 1.5% return.

So what does all this mean to rest of year? The answer is always - It depends!
The calendar has two of scariest months (Sept/Oct) for markets followed by two of best months - Nov/Dec (2018 being exception). So if you are in market for long-term, do nothing for your existing investments. In fact when markets go down in Sept/Oct, be ready to make opportunistic investment for dollar-cost averaging. On sectors, I still like Tech and Biotech. Recently NTNX ($24), MRNA ($15), my favorite ROKU ($150), Disney ($135), Microsoft ($135) and WDC ($55) seem be holding up well and could do better than market for rest of year and 2020!

Happy Ganesh Chaturthi and Long Weekend!
/Shyam

Streaming Wars and the Winners are....

Just came back from relaxing vacation in Kauai and surprisingly we did not even turn on TV during all of vacation. That must be some kind of personal record given the countless choices we have in world of streaming with Netflix, Prime Video, Hulu, HBO, Cinemax, Hotstar and so on! And given this week's announcement of upcoming bundle of Disney+, Hulu and ESPN+ coming in Nov 2019, more choices are coming! Not to be left alone, AT&T is going to launch HBO Max. Viacom and CBS are talking about combining their content. And each of these are offering some high quality content to watch almost on daily basis. What started as a small experimental stream by Netflix about decade back is turning out to be a flood-gate. By some counts combined spend on streaming content would exceed total US  movie box office collections (which was around $11B on annual basis). Netflix alone plans to spend over $12-15 Billion on content - majority of that would be on creating original "Netflix" original content. It has spent $150 million on Martin Scorsese directed "The Irishmen" starring Robert De Niro and Al Pacino. And Netflix subscribers would get to watch from their own home without paying any additional money! Disney+ would make all Star Wars, Marvel and Pixar movies available as soon as their theatre run is over (within 3-4 months). HBO Max, Apple TV, Prime Video...I can keep on going. And then of course you have sports to watch! So it feels like streaming wars are on with all these companies fighting for subscribers,  their entertainment time and monthly subscription $$.

So who are the winners in these streaming wars?

• Netflix and Disney are going to be leaders when it comes to content. Each of them would have over 200 million subscribers in next 10 years. And most of them won't mind paying $15 per month to consume quality content every day for less than price of movie ticket!
• Content creators: There is real war going on in acquiring content and signing up top-notch content creators. Prime video paid over $250M to acquire rights of "Lord of the Rings" TV series. Netflix signed Game of Thrones creators David Benioff and D.B. Weiss for nearly $300 million over 5 years. 
• Subscribers: You get to consume quality content from your home for significantly less than what it would cost to subscribe to linear TV and movies in theatre. And you get significant diversity in content from all over the world anywhere in the world!
• Roku: This is not-so-obvious winner. But here is my hypothesis. To stream any of the channels mentioned, you must have a "streaming" device to connect to your TV. And Roku is most popular device with significant market share lead over Amazon Fire, Apple TV and Google Chromecast. The Roku device is like gateway to streaming world. Roku company has complete data on your streaming habits. It also has free aggregate channel "Roku Channel" on which it provides access to free movies, TV shows as long as you are willing to watch some ads.  It has over 30 million "subscribers". It also licenses Roku OS to TV manufacturers. No wonder it's stock is on fire in 2019 rising over 300% from under 30 at start of 2019 to trading above $120 now. And relatively speaking it's still cheap at $13 Billion valuation. And this was one of the stock I recommended as 2019 pick in "Best of New Year 2019"

With every war, someone is losing. And in this case, linear TV and broadcast and cable channels are the losers. Do you remember Blockbuster. Hollywood and RedBox? Those were the early victims of streaming wars.
That's all for now.. Time to check what's new in streaming world today....After all I am back from vacation!
/Shyam

Markets: What's in store for rest of year?

As I wrote at start of year "Third year is Best", 2019 is turning out to be exactly like that and more. In 3rd year of president's term, markets have been up on average of 15%. This year, S&P is up by 20% and only half the year is over. So does that mean we have seen all the gains for 2019 already? With earnings season about to get into high gear, let's look at key factors which would decide what's in store for markets.

Earnings: 
Next two weeks, large number of companies would be reporting 2nd quarter earnings and provide forecast for 2nd half. While some companies have started warning season (e.g ILMN), it has been relatively quiet on warnings front. Analysts have already lowered their expectations. Economy is not doing as badly as feared at start of year. Trade noise is subsiding. So majority of companies would meet/beat earning forecasts and provide cautiously optimistic forecast. The earnings show is becoming too predictable. No one likes surprises. So companies which manage avoiding surprises would get rewarded and those who will not, will get punished.
Tariffs and Trade:
Another G20. Another patch-up between Trump and Xi. The "Game of Brinkmanship" continues. These half-yearly meet ups are becoming as exciting and at same time predictable as episodes of just concluded "Game of Thrones". With recent G20, both presidents did some patch up and asked their representatives to restart talks even though there are some major differences in policy. The show will continue in fall but given 2020 election cycle, Trump needs to show some victory on this front. He could also use his hard-stance to force lead democratic candidates (Biden) to take position.
Fed and Interest Rates:
Of all these factors, this is the most important factor supporting markets and economy. Fed chairman changed the tune of 3 interest rate hikes in 2019 to potentially 2-3 interest rate cuts in 2019. What happened for this sudden change of heart? Many factors: there is some softness in world economic growth, inflation is stubbornly staying below 2%, trade war fears and constant pressure from President Trump (even though it's not acknowledged). Fed chairman Greenspan extended the 90's expansion by cutting rates in 1998 giving the reasons of LTCM blowout, Russian currency crisis and markets continued to party till 2000. Fed is doing something similar in 2019. That means it would be all clear for markets to party till end of 2020. This expansion is already the longest expansion on record (records are kept since 1854). Fed is going to keep the party going for another few quarters. So if you are thinking of investing, don't fight the fed and invest in S&P indexwhen opportunity presents in Fall (Sept/Oct) when some correction could happen!
/Shyam

The World Cups!

Its exciting time in sports with two world cups in progress. Being from India, I am fascinated by Cricket world cup which I have been following closely since 1983 when India won its first cricket world cup. I still remember the 1983 world cup final in which India (which was not even underdog) beat 2 times world champion West Indies with many stalwarts. It was and still the biggest Indian achievement in world of sports. Dhoni's team repeated the feat in 2011 and now its time for India to claim the Cup third time. The Indian sub-continent is crazy about cricket and even regular matches make viewing history. India-Pak match was watched by 700 million people - highest watched match possibly in any sports. If India makes into final, this record may also be broken. Just as reference, this is 7 times viewership Super Bowl gets! I won't be surprised to see billion people watching India-Pak match in 2023 world cup (which would be held in India).

While I watch FIFA Men's soccer world cup every 4 years and honestly did not follow Women's soccer world cup, I am very proud that USA women's team made to final and wishing them best of luck to win the Soccer World Cup on Sunday in final against Netherlands. Two sundays - two world cup finals. My adopted country (USA) beat England to go to finals. My mother country (India) also has to beat England to go to Cricket world cup finals. It's exciting time to follow and watch sports!

And it's exciting time for markets too! Market returns in Jun were best since 1938 and with dovish fed, truce in US-China trade wars, economy not too hot and not too cold and corporate earnings not as bad as projected just few months back, markets are poised to make new records. S&P will break 3000 next week and start inching towards year end target of 3100. 

The race for democratic presidential nomination is on. Looking at initial round, looks like Biden is leading contender for nomination. Maybe Biden-Kamala Harris should pair up for common ticket against Trump who may have to dump Pence and select Nicky Haley as VP candidate to counter Kamala factor. It's interesting times for politics!

Happy 4th of July!

Just a follow-up:
USA Women's team won Soccer world cup 2nd time in row. Congrats to team USA!

Despite having great tournament and coming on top of points table, India lost to excellent play by New Zealand in Semi-final. With this loss, billion dreams of winning Cricket world cup in 2019 got crushed. Now onto next cricket world cup in India in 2023!

One Win; One Loss!

/Shyam

May is over. What about "Mayhem" in Markets?

First of all, the Greatest Show on Earth wrapped up on May 23 with Indian elections producing a resounding victory for PM Narendra Modi and his party BJP. Modi got complete mandate to lead India for next 5 years. Congrats to Indian voters for making a wise choice in electing Modi and rejecting one of the possible 22 PM candidates from smaller parties (yes - Rahul Gandhi is from a small party called Congress). Even if large number of Indian voters are un-educated, they have demonstrated lot more maturity in selecting their leader than educated electorate in Britain.

As I said in last couple of blogs, "Sell in May and Go Away" was right on mark! It was one of the worst May month since 2011 and first down month of 2019. Just six weeks back S&P was on its way to 3000. And then it all fizzled out. Let's see what changed the narrative.

• Brexit - PM May had to announce her resignation due to Brexit mess. British must be thinking what mess they got into by narrowly voting for Brexit. New PM (Boris?) will most likely push Britain into Brexit without deal with EU and cause some nervousness. It would have been better for them to of for another referendum (maybe best of 3) and let people decide instead of MPs.
• Trade War - The US and China trade squabble is turning into war of words and could lead of real trade war. It may be that both sides want to raise the stakes leading up to G20 meeting in Japan so that both Trump and Xi can play to their respective populations and then agree to deal. 
• Tariff Wall - President Trump opened another front in his trade war. Since he cannot get funding for real wall at US-Mexico border, he is using threat of tariffs (Tariff Wall) to influence immigration. Given Mexican President's statements, most likely Mexico would do something about people coming into US and Trump would soften the threat
• Slowing Economy - Q1 grew at 3.1% but again doubts started taking roots about overall GDP growth. This is evident from 10-year treasury reaching 2.13 (lowest in 2 years). Just in Dec, Fed was talking about multiple interest rate hikes in 2019 and 2020. Now most likely they would end up cutting rates by 1 or 2 times in 2019. Finally Trump may be getting what he was saying about interest rates but given 2020 election cycle, he should be careful what he wished for
• Chips and Oil - Semiconductor chip prices are indicators of modern economy and oil price is indicator of 20th century economy. And both of them are down. With these down and inverted yield curve, signs are pointing to potential recession on horizon.

So what should one do? It depends on what politicians and policy holders would do. Trump can change his tune on tariff (for both China and Mexico) on a tweet. Fed chairman Powell can give definite indications of next step being interest rate cut. Chairman Xi can give some positive indications at G20 about deal with US. These three people can change the narrative of the world economy and hence the markets. So I am still cautiously optimist in terms of 2019 year end target being closer to 3000 than 2500 (currently S&P is right in the middle at 2752). So if you believe in the cautious optimism, next two weeks should give ample opportunity to invest. My favorite sectors are Semi, Tech, Biotech and Energy. As they say, "When Chips are down, it's time to go all in"! (if you have the right hand).

Go Warriors!

/Shyam

Deal or No Deal?

What seemed like final climax of trade negotiations turned out to be another round of back-and-forth negotiations between Americans and Chinese (from last count, they are in 11th or 12th round of negotiations). Last Sunday President Trump surprised the world and markets with his tweet that US is going to put 25% tariffs from Friday May 10. Markets took the note and tumbled 2-4% across the world. While Chinese team did come to Washington to continue negotiations, on Friday US increased tariffs from 10% to 25%. Chinese reaction was relatively mild but future of further trade discussions is uncertain. Markets and companies were expecting that Trump and Xi will sign deal in May or at most by G20 summit in Jun. Now that's most unlikely unless both sides back off little bit in give-and-take of negotiations. Both sides are banking on their relative expertise and history. On one side we have president who wrote "The Art of the Deal" book while other side prides itself on legacy of "The Art of War" written by one of the most revered military strategist Sun Tzu. President Trump wants a deal in 2019 so he can claim victory during Presidential Election campaign while Chinese would rather wait post 2020 and hope they don't have to deal with Trump. Now that Trump has put the tariffs and if negotiations don't proceed fast, he promises to put on remaining $300B plus imports, Chinese may feel some urgency. However "Art of War" says "If you know the enemy and know yourself, you need not fear the result of a hundred battles" That means Chinese could be in this for long haul and willing to put up with short-terms pain. So are Americans and Chinese in "Mexican Standoff"? The external event which could force both Trump and Xi's hands would be sudden sell-off in markets (similar to last quarter of 2018) and economic downturn. After all no one wants to rock the boat or in worst case repeat of 1929 or 2008. So as I mentioned in my last blog, one must pay attention to "Sell in May and go away" till clouds on trade negotiations clear up!
/Shyam

"GUI" of Goldilocks Economy!

In today's world of UI/UX, people don't normally talk about its original term of "GUI" which means Graphical User Interface. In App world, it's all about UI/UX. The first GUI based computer was invented in PARC in 1973. Apple later popularized it with MAC. Apple then changed GUI to UI/UX with iPhone introduction by unleashing the App world. Now most of the companies developing apps have separate groups focused solely on UI/UX! But let's talk about another GUI!
 GUI of economy is about (GDP) Growth, Unemployment and Inflation. And given recent Q1 numbers demonstrate that we are in "Goldilocks" economy - not too hot, not too cold. Let's look at:

GDP Growth: On back of major market churn in Q4, 2019 started with fears of growth falling below 1%. Slowly as quarter progressed, growth forecasts got revised to 2%. However actual GDP growth came in at 3.2% which was much stronger than anyone (except may be markets) was expecting. The adrenaline of Trump tax cuts got over in 2018. So is this growth now real? Only rest of 2019 would tell the real story if US economy can grow 3% sustainably.

Unemployment: At 3.6%, its lowest unemployment in 50 years. Even in roaring 90's unemployment did not reach this low. What's driving it? Wasn't it supposed to be other way in which automation, robotics, trade, manufacturing moving China/Mexico supposed to be killing jobs. Yes - all of these factors are killing old jobs but at same time creating new opportunities like "social economy" jobs, retail jobs moving to Amazon warehouse jobs, travel agent jobs moving to "Instagram moment" jobs. America is best in re-inventing its economy every 2-3 decades and this time is no different.

Inflation: 50 year lowest unemployment is supposed to create inflation - that's what get taught in economy classes in colleges. So why is inflation still at 1.5% and having trouble reaching fed target of 2% and cause Fed to worry? Well - this is something to be researched and could be a good topic for PhD in Economy. My hypothesis is that forces of automation, geek economy, "flat world", mobility of goods and people, plenty of energy sources (unlike in 70's when Oil embargo caused inflation to jump to double-digit) are changing the way inflation used to work. It's no more just linked to unemployment or commodity prices. And it's good for world population as long as low inflation does not turn into deflation.

That's why I call today's economy in America as Goldilocks economy! Now all that change if President Trump really follows thru its threat of putting tariffs on most of the goods coming from China. It's good negotiating trick but can risk de-railing the confidence and markets! And its that time of year when the saying on Wall Street "Sell in May and Go Away" could have relevance!

/Shyam

2019: Culmination of Avengers, Thrones, Starwars and Markets?

It's Avengers Mania across the board with movie breaking all records in multiple countries (even in non-English speaking countries like India and China) and already collected over $1.2 Billion in 3 days! That's a juggernaut which would rule the box-office for next few weeks and would easily cross $2 Billion in matter of days. Looking at similar "culmination" events, 2019 turning out to be year of culminations. Let's look at these:

• Starwars: Started in 1983 and after 8 movies, final episode is coming Dec 2019. So this saga is wrapping up after 36 years of fan-mania. It would be interesting to see if it will break "End Game" records.
• Avengers: It started with first Ironman Movie in May 2008. After 21 movies over 11 years "Avengers: End Game" brings all stories together. While this may be called as "End Game", I am sure Disney/Marvel will keep on churning new superhero movies. Now it's just matter of time, if there is Marvel and DC superheroes come together to save the galaxies at some time in future. Given expanding world of Disney, I won't be surprised if it happens over next few years
• Game of Thrones: This expansive and most popular cable series started in 2011 and after budget of nearly $10 million per episode (means more than $500 million cumulatively), it will wrap up with movie style (1 hour and 20 min) runtime in May. Even in today's world of streaming and countless choices, GOT has created buzz similar to last season/episodes of MASH, Seinfeld etc. What's next? AT&T (which owns HBO) must be planning multiple spin-offs of GOT
• Markets: Markets are on its 2nd longest bull-run and in Q2 it will become longest bull-run on record. While one can never predict when this bull-run will be over, it's reasonable to assume that as election cycle gathers momentum, we would see markets taking a pause in summer and potentially make one last run towards all-time highs towards end of 2019 before having a shallow bear phase in early 2020. Till then enjoy the ride since markets will reach all time highs with S&P potentially breaking 3000 in next few days.

There is something about the timing since coincidentally all of these started in Spring (Starwars: May 1983, Avengers: May 2008, GOT: Apr 2011 and Markets: Mar/Apr 2009). No wonder there is a term called "Spring Fever"

It's time to go and enjoy Avengers Movie!

/Shyam

It's time to DISCO

From the title, one would wonder did I change narrative of my blog and started blogging on dance style or what? Well - yes and no. I like movies, music and of course nice choreographed songs (even though personally I am absolutely not good at dancing). DISCO was one of the major trend in early 80s and gave world some of the exciting dance moves! One of the bollywood producer Karan Johar also seem to like DISCO style and tries to mix one of the song with DISCO style in his movies. Check out It's time to DISCO song in Kal Ho Na Ho.
But this blog is about investing. So let me explain what DISCO means.
DISCO is new acronym coined by me to cover stocks which are relatively old tech/media companies but doing exceedingly well especially in 2019 and would be relevant in 21st century. All of these companies with exception of one are more than 30 years old and most importantly they are also dividend paying companies with yield ranging from 1.5% to 5%. These companies (with exception of one) were written off multiple times during their lifetime and each of them reinvented. So here are these companies in DISCO!

DISNEY (DIS)
Intel (INTC)
Salesforce (CRM)
Cisco (CSCO)
Oracle (ORCL)

Let's talk about each company briefly since none of these companies need big introduction.

Disney: YTD 21%
This is the oldest company of DISCO. With it's streaming announcement, it has definitely pivoted itself to be relevant in 21st century. No company can match its creative assets with universe of Disney, ABC, ESPN, MARVEL, PIXAR, STARWARS, FOX assets (Fox studios, Hotstar, Star India), Theme parks and many more. With streaming, it will bring all of these to homes at reasonable price. Now it can hold its own against Netflix onslaught and be relevant in 21st century.

Intel: YTD 25%
Intel has transformed itself multiple times after written off by every new trend - be it mobile, alternate CPU architecture, AI, ML and so on. By making smart decisions (like getting out of 5G race or focusing on data center), it has kept with pace of innovations in its core space. It had made some smart acquisitions along the way (even though it should have acquired Nvidia few years back). Intel is here to stay no matter where Semi world goes!

Salesforce: YTD 13%
This is the youngest company in DISCO and only exception of more than 30 year old and dividend paying rules. But this company deserves to be part of DISCO. It invented how software should be delivered 20 years back and since then it has been leader. It's the leader of cloud SAAS players and even big software companies like Microsoft, Adobe and even its arch-rival Oracle is following the path.

Cisco: YTD 30%
Since I work at Cisco, I cannot write much about company to avoid conflict of interest. But as publicly available information has shown, Cisco started the journey of focusing on core and transforming itself into world of software and subscription. Credit goes to our CEO Chuck Robbins for this transformation. In terms of YTD returns, this is the leader of DISCO with 30% YTD returns

Oracle: YTD 21%
Oracle is 2nd company in software to make into DISCO. But as Marc Andreessen written in his blog "Why Software Is Eating the World" in 2011, the trend is increasing and hence it's worth to have 2 software companies in DISCO. While Salesforce is nipping on Oracle's business, almost all biggest companies run on Oracle's core product of databases. Oracle is investing heavily into moving its offerings into cloud and made decent progress. The story would play out similar to Microsoft albeit slowly. 

As one can see, DISCO stocks are having a good time in 2019 and most likely continue the "dance" even though stock market music stops in 2020. Most importantly this group would be relevant in  21st century.

Happy Easter Sunday!
/Shyam

The Greatest Show on The Planet!

You must be wondering what would be "The Greatest Show" on the planet we call The Earth! Many events would qualify for this honor. For college basketball fans, it would be March Madness which wrapped up last week (Virginia won). Then there was the biggest comeback in any sports with Tiger Woods winning Masters at Augusta. This would be his first major win since Jun 2008 - even before longest running bull market started. At age 43 and after a gap of 11 years, this can definitely be "biggest comeback" but does not qualify as greatest show. Last time he won any major was when Game of Thrones was only books! Now for "Game of Thrones" fans, first episode of final season which aired on Sunday Apr 14 could be called big show with highest TV ratings. But hey, those many people watch an average Indian soap-opera or an IPL match. Now 2019 IPL (Wildly popular 20 over cricket tournament between 8 teams in India) comes close to "Greatest Show" which happens every year during Indian summer. Cumulatively 100-200 Million people must be watching IPL matches.
But to top it all, Indian Parliament Elections is truly the " The Greatest Show" on earth. It happens every 5 years (most of the times due to stable governments - in 90's record was few months). This year it started on Apr 11 and would finish on May 23 when counting will start. The elections will happen over 7 phases and nearly 900 million would be eligible to vote, And Indians do vote with average participation of over 60-65%. That means 550-650 Million people will cast their vote (twice the population of US). So it's not only watching any TV show or sports match but actively participating in electing the Government which would decide the fate of 1/6th of world population and run 5th largest economy. Now if that's not The Greatest Show, tell me what would be?
2019 elections are going to be key to how India would realize her full potential. PM Modi had shown the path with bold and decisive policies what can be done with strong and corrupt free government. But 5 years is a short time to make significant change. China took 30 years to become 2nd biggest economy because its leaders do not need to get elected every 5 years. Despite almost continuing elections (local, state, federal), India had done an amazing job in growing economy at 6-8% in last few years. India needs another strong government led by PM Modi to take her to next level ands realize her full potential. That's why these elections are so crucial for India and for world!
The Greatest Show on The Planet is On! Stay tuned for May 23 for the Finale!
/Shyam