Recall walking through the ubiquitous chain drug store near you
to see the cologne shelves where the knock-off brands advertised
"If you like Paco Rabanne, you'll love 'Paul Raven' cologne."
Basically it smells the same but is a lot cheaper.
[caption id="attachment_65841" align="alignright" width="300"
caption="As the Indian government becomes more business friendly,
the country's economic prospects look brighter."]
Sorry, but this is my metaphor of the day used in the context of
) and India (
). Turkey has been a darling for local and global investors
alike due to its robust domestic economy heavily reliant on the
Turkey has also passed into an age where global problems present
a sweet spot for investment. Slower global growth is not an
issue for Turkey as they have a diverse export market and a
domestic consumption story that is booming.
Turkey has always been plagued by two primary issues:
1) They have always run a large current account deficit as they
were largely unable to fund themselves internationally and had to
import major amounts of commodities to fuel their economy.
2) They have had an inflation problem.
These two are obviously related and clearly have affected how
policy makers had to act to keep order.
Creative and unorthodox policy has been carried out to deal with
conditions particular to Turkey and their micro and macro
Now see India.
India has long struggled with the social pressures on the
government because of the inflationary aspects of an economy that
is truly growing from within.
India is not China. India is not exporting to the world as
a foundation of their economic blueprint. India is slowly
reforming (painfully slow) while addressing the very unique issues
they face as a country with 1.1Bn people who must be fed, clothed
India too has spent the last decade in search of greater energy
independence. They, like Turkey, are now getting their wish
indirectly as a bi-product of the credit and commodity bubbles
Today, India reported inflation at 4 year lows, as whole sale
prices read 4.89% in April (5.45% expected).
These readings are now at 41 month lows while the economy is
showing resilience. Factory output and industrial production
numbers released in the last week are showing strength. If
India can feel confident they have even temporary control over the
inflation genie, they can adjust policy to be more accommodative
and spur additional growth.
India with real political will behind reform and the ability to
be aggressive in their economic stimulation will deliver a major
boost to a stock market that is flat on the year vs. Turkey's
India is Turkey on steroids if there is balance between growth
A quick basket to get that exposure:
HDFC Bank Ltd (
ICICI Bank Ltd (
Tata Motors Ltd (
Wipro Ltd (
Tata Communications Ltd (