Déjà Vu: Mansharamani Musings 02-15-2015

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This morning, like each of the past four Sundays, I awoke to reports of an impending blizzard.  Same story: a massive storm was going to leave Boston with lots of snow.  In the past three weeks, the greater Boston area has received more than 7 feet of snow!  Given I teach on Mondays in New Haven, it's made for a treacherous start to every week...and has reminded me of the movie Groundhog Day, in which Bill Murray is stuck in a never-ending repetition of the same events every day.   Fortunately for me, however, I've had a streak of wonderful guests visiting my class at Yale.

The first guest to visit my class this year was David Swensen, Yale's Chief Investment Officer and a good friend, who spoke about incentive structures, principal-agent problems, and the need for a fiduciary standard in finance.  Matt Winkler, founding Editor-in-Chief of Bloomberg News, also visited and joined a class debate on the tradeoffs between accuracy and speed in journalism.  The third guest to visit was Steven Fox, Chief Executive Officer of Veracity Worldwide, a strategic risk advisory firm.  Steven joined a classroom discussion about the Foreign Corrupt Practices Act (FCPA), transparency, corruption, and the risks of doing business in the emerging and frontier markets.  My fourth guest was Alex Epstein, author of The Moral Case for Fossil Fuels.  In an engaging and spirited discussion, Alex shared his views about energy markets, climate change, and the role fossil fuels have played in human development.

Although my class provides much-appreciated variety, I find today's headlines more like Groundhog day than the intellectual dynamism of campus life: Greece bailouts, Russian aggressiveness, China slowing, concerns over ISIS, strong dollar complications, etc.  While it's easy to numb to the monotony of these headlines, important developments are brewing below these headlines that affect our geopolitical and economic future.

Consider the repetition of snow-related news.  Remember how last year's tough winter adversely affected the US economy as snowstorms kept consumers (and their money) at home, leaving malls and stores less full than they otherwise may have been?  Are we in for some weather-related "surprises" in which corporate earnings and economic growth disappoint?  One noticeable exception is the industrious fellow who plows my driveway, who seems to be smiling a lot these days!

I'll continue to comment on developments I find intriguing.  In addition to posting my thoughts on my website every Wednesday, I have also begun posting them to LinkedIn, Facebook, and Twitter.  Listed below are links to my most recent comments.  As always, I'd welcome feedback!

 


 

The Fertilizer Effect

My latest comment was about the link between carbon dioxide and plant growth.  Higher carbon levels increase plant growth in much the same way that fertilizers do.  Are we overestimating the impact that rising carbon emissions may have on food production and global food security?  Is it possible carbon dioxide can help fight global hunger?  Read more HERE.


 

PBS: Random Admissions

The PBS Newshour heard about my first class of the semester this year and asked me to share the experience with its audience.  What emerged was a piece that generated interesting debates on how to make tough choices.  Click HERE for the article.  I'd encourage you to scroll past the article to read the comments as well.


 

Geared Gambling with ETBs

The explosion of ETFs has been accompanied by the creation of leveraged and inverse products, funds that track multiples (positive or negative) of the daily move of an index.  I suggest these vehicles are better suited to speculation and gambling than they are to investing, and further suggest we call them what they are -- exchange traded bets.  Click HERE to read more.


 

Obama in India...

In mid January, YaleGlobal asked me to reflect on US-India policies in anticipation of President Obama's visit to India.  Although I touch on a host of issues, one idea within this article generated significant feedback: the suggestion that it's time for America to encourage Pakistan-India trade.  Read the piece HERE.


 

The Energy Subsidy Bubble

Many countries continue to subsidize energy prices via consumption subsidies.  In this piece, I argue that the current low energy price environment offers a unique opportunity to remove these policies without the risk of social unrest.  Click HERE for my comment.


 

To Get Efficient is Glorious!

Early indications suggest that India may be turning towards capitalism and away from its socialist-leaning past.  In this comment, I reflect on the potential for India to become the fastest growing large economy in the world...it just needs to get out of its own way.  Click HERE for more.


 

CNBC Interview

In January, I participated in the 2015 India Investment Conference sponsored by the Indian Association of Investment Professionals and the CFA Institute.  I spoke with CNBC immediately after my talk and shared my views of the global economy, India, China, commodities, gold, oil, and central bank induced currency volatility.  Click HERE to watch the ~13 minute interview.


 

15 Predictions...

My first comment of the year was a look forward to developments that I believe have a reasonable chance of happening in the next five years.  I touch on India's rise, Australia's forthcoming recession, and the rise of robots, among other possibilities.  My objective was not to be 100% accurate, but rather to provoke thought.  I'd love feedback!  To read all 15 predictions, click HERE.

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