🇮🇳 What's Going On With India?

Some people are getting bullish on this emerging economy. April 23, 2024 | Peel #694 Silver Banana goes to... [SRS Acquiom. ]( In this issue: - 🎯 Some people are getting bullish on this emerging economy. - 🚖 Electric Vehicles are really taking a hit right now… you buying? - 💸 Only 14% of the S&P 500 companies have reported earnings so far. Market Snapshot 📸 Banana Bits 🍌 - Get ready for some Big Tech earnings with that [classic MSM nonsense]() - The FTC is getting in the way of even more [corporate love-making]() - Llamas are running wild in Silicon Valley as Meta open sources its [LLaMa-3 AI bot]( - Time for AI and Nietzsche to team up as [engineering meets philosophy]() Paradise Means Leaving Thumb Drives Behind You’ve got enough things to worry about. A thumb drive full of deal docs and data shouldn’t be one of them. With SRS Acquiom, it doesn’t have to be. Because once your files are up and organized on the VDR, they can stay there until you decide to take them down. Since there’s no additional charge to keep the VDR open, it’s totally up to you whether and when to close it. In the meantime, all that confidential data stays as secure as ever. It gets better: transparent, flat-rate pricing for however many users and uploads you need, for as long as you opt to keep the VDR open. No pay-by-the-page nonsense or unexpected upcharges here. It’s obviously a win-win as far as VDRs go. It’s also one more way SRS Acquiom maximizes efficiency throughout the deal process— from due diligence, to payments, all the way through post-closing. That’ll keep your clients happy and you looking great at what you do. Need more convincing? [Here's more convincing]( > Macro Monkey Says 🐒 Bulls, Bears, and… Tigers? Friendship, love, and the value of your stock portfolio—the three keys to happiness. Let’s face it—we have no chance of ever receiving the first two, so let’s focus on that last one. Lately, some more daring investors have loaded up on a new way to make sure their stock portfolios keep them happy. India—once a sprawling subcontinent of over 550 largely flourishing kingdoms, to then forcibly becoming Great Britain’s personal farm/factory until re-gaining independence in 1947, the world’s most populous country is popping off again. The Numbers With its [population](=) of 1.442bn, India now boasts the world’s 5th largest GDP, behind only the U.S., China, Japan, and Germany. [Source]() But, according to estimates pointed out by Anupam Ghuse, Managing Partner at System Two Advisors and recent guest on the [Animial Spirits]() podcast, that isn’t going to last very long. With a GDP CAGR of 7.7% from 2009-2019, India’s economy is expected to lock up the Bronze medal of GDP size by 2030, third only to the U.S. and China. And with prospects like that, many investors are looking to get in on the gains. The nation’s stock market floats between the 4th and 5th largest in the world, on par with Hong Kong, at ~$4.33tn. India’s largest company by market cap, Reliance Industries, is currently worth ~$250bn. Large-cap names like Reliance, Tata Industries, HDFC Bank, Infosys, ITC, and many others are largely concentrated in tech, banking, and consumer goods. [Source]() Who Cares? The hype around emerging market economies often turns out like Season 8 of Game of Thrones—shorter than expected and wildly disappointing. But it's time to say the most dangerous phrase in finance—this time could be different. The thing about India is that politically, culturally, and, most of all, demographically, this story actually makes sense. India’s move to free-market democracy in the last few decades—unlike that of countries like China—is generally the recipe that leads to outsized economic gains for consumers, investors, and governments alike. Capital allocation tends to perform more efficiently under this structure and, as India’s economy moves away from state-owned and generational family-owned dominance bodes well for an improving economy and expanding middle class. [Source]() (damn, that is blurry) A growing middle class is to an economy what steroids were to Barry Bonds—it’s where the power comes from. So, as incomes rise, consumer spending booms, leading to further gains in incomes, wealth (*cough* *cough*, stocks), and the cycle repeats. But, the trick up India’s sleeve that separates its from most other emerging market economies is, of course, demographics. [Source]() The above graphic is called a “population pyramid”, which plots the age of a country’s inhabitants across the Y-axis, while the X-axis shows the % of the total population they make up. The wider it is at the bottom, the better. Economies thrive when their population is dominated by working-age consumers and taxpayers, as opposed to an aging population where retirees tend to limit a country’s ability to make public and private investments in higher growth sectors. For comparison, here are the population pyramids of the U.S. and China. The Takeaway? India now might be on a similar economic trajectory to that of the U.S. post-WWII. That’s not to say that the rupee will become the global reserve currency or anything, but India’s demographics, governance structure, and work ethic among the population fit right within that same trajectory. Plus, now even esteemed media outlets in the U.S., like, I don’t know, The Daily Peel or something, are catching on. As long as Jim Cramer doesn’t say anything too bullish about the world’s most populous country, they’ll be alright. = What's Ripe 🤩 Matterport (MTTR) 📈175.9% - “Manifesting” reality only works if you’re a wealthy believer in astrology… or if you’re Matterport. The 3D property visualization firm is getting acquired. - Matterport has become the industry standard provider of virtual open houses and property tours, becoming more and more popular in the aftermath of WFH. - So, CoStar Group, the Bloomberg of the CRE market, decided to get in on the action by acquiring Matterport for $5.50/sh, half cash, and half stock. Zions Bancorporation NA (ZION) 📈3.5% - We can sum up Zion’s Q1’24 earnings in one phrase—“it could be worse!” Or even better, “at least we’re not SVB.” Shareholders are hella relieved. - The regional bank delivered an 11% annual decline in revenue to $742mn, slightly beating estimates, while EPS of $0.96/sh was right in line. - Net interest income fell 14% YoY, but margins improved from 2.91% in Q4 to 2.94% now. It ain’t much, but we sure hope it’s honest work. What's Rotten 🤮 EV Companies (TSLA, LI) 📉5.6% - Everyone’s talking about inflation, but the EV has seen nothing but deflation for both consumers and investors. Consumers love it, but the investors… - They hate it. And yesterday, EV companies around the globe continued to slash prices, with Tesla (TSLA, -3.4%) and Li leading the charge. - Demand hasn’t been recharged in the EV market, especially now that the market expects fewer price cuts this year than there will be gains in my portfolio. Verizon (VZ) 📉4.7% - Ryan Reynolds is throwing a rager over at Mint Mobile today, watching his mortal enemy (not Cassandra Nova), Big Wireless, suffer. - Yesterday, the biggest of Big Wireless disappointed on Q1 earnings, reporting only 0.2% sales growth to $32.9bn against the $33.2bn expected. - EPS beat at $1.15/sh vs the $1.12/sh estimate. The firm lost fewer wireless subs than expected but managed to grow broadband in the meantime. Thought Banana 🤔 Squeezing The Lemon Generally, drivers have anywhere from 3-6 seconds to slow to a stop when the light turns from green to yellow, depending on the speed limit. Unfortunately, no warning exists for corporations when there may (or may not) be an economic slowdown at the next intersection. Many prognosticators were seeing a yellow light from a mile away last year. But, now that we’re in 2024’s first official earnings szn, it’s clear we may have hit the breaks a little too early. Time to squeeze the lemon of corporate profits. What Happened? Only 14% of the S&P 500 has reported earnings thus, and most of which have been the big banks or the sh*tcos no one cares about. But they’ve done a good job of surprising to the upside so far. [Source]() This week is when earnings reports really set the market on fire—with 590 companies reporting on Wednesday and Thursday alone. Plus, Big Tech earnings will kick off, too, with Tesla reporting today, Meta tomorrow, and Microsoft on Thursday. Along with the earnings beats, we’re starting to see Wall Street analysts further increase their EPS estimates for the whole S&P 500. JPow’s masterful ability to clean up his own mess (a.k.a. being entirely responsible for all this inflation) continues to prove effective. Easy financial conditions, strong consumer spending, and a normalization of high rates are helping out big time. [Source]() The Takeaway? So far, both estimates and performance have surprised to the upside. And, it seems like that’s the general vibe among yet-to-report companies as well, given the increasing estimates and yesterday’s optimistic rise in equities. At the end of 2023, our main concern for U.S. investors was earnings growth, with the uncertainty around financial conditions and companies’ abilities to pass on inflationary pressures to consumers coming heavily into question. But, it turns out conditions stayed nice and easy and consumers don’t care nearly as much about inflation as the complainers on Twitter would have you think. The risk remains buried within these reports and the expectations around them, however. Not every earnings report reaction is created equally. Hardly anyone cared that Verizon missed earnings above, but if Nvidia beats on EPS by less than ~5 million %, look out below. Fingers crossed. Maybe AI fixes this? 💭 The Big Question 💭: Will companies live up to the high expectations the market has set? How high are expectations for Big Tech firms that run the market? What should the new main risk to the market be going forward? Banana Brain Teaser💡 Previous 📅 The sum of the weekly salaries of 5 employees is $3,250. If each of the 5 salaries is to increase by 10 percent, then the average (arithmetic mean) weekly salary per employee will increase by what? Answer: $65 Today 🕐 Last week Chris earned x dollars per hour for the first 40 hours worked plus 22 dollars per hour for each hour worked beyond 40 hours. If last week Chris earned a total of 816 dollars by working 48 hours, what is the value of x? Send your guesses to vyomesh@wallstreetoasis.com Wise Investor Says🤓 “Growth comes from chaos, not order.” — Rakesh Jhunjhunwala Today's Peel? 😁[All the bananas](=) 😐[Meh]() 😩[Rotten AF]() Happy Investing, David, Vyom, Jasper & Patrick [ADVERTISE]() // [WSO ALPHA]( // [ACADEMY]( // [COURSES]( // [LEGAL]( [Unsubscribe]( IB Oasis Corp. (aka "Wall Street Oasis") 20705 Saint Charles St Saratoga, California 95070 United States (617) 337-3353