Finding the Trump Card in Volatile Times

Triumphant Trump
Much like the proverbial Phoenix that rose from its own ashes,
Donald Trump came from behind and dealt a mighty blow that
decimated the Clinton camp. The historic outcome of the
election sent shock waves across the United States and beyond
its borders. While experts talk about a slowdown in the
Emerging Markets and the uncertainty that looms over the
economic future of the world, there are pockets where
opportunities still loom large.

Uncertainty Pangs
One of the primary issues that have rattled investors in India's Index benchmark Nifty over
the years is whether investments can be timed in order to incorporate or discount factors
like high volatility and outperform the market or other odds. One understands that it is
nearly impossible to predict such uncertainties, however mean reversion studies have
revealed time and again that most multibagger stocks in the Nifty Index tend to revert back
to its average over the longer horizon even if it undergoes wild swings in the shorter
timeframe. In ways that go unnoticed to the panic stricken investor, this variation of value
adds long term investment merit to those who can spot the not.

Whats expensive, whats not?

Research reveals that the US high-dividend stocks such as Utilities look expensive after
five years of incredibly strong performance, however emerging market dividend stocks are

on the opposite side of the spectrum. Stocks as well as currencies have been jolted across
emerging markets even as the United States elected Donald Trump to power.

The Mexican Wave

Mexican peso for obvious reasons led the slum with a fall of 9% against the USD. Other
currencies like the South African Rand and the South Korean Won were left to speculative
bets and later dropped by 2% and 1.5% respectively. In the words of Ashley Parrott, head
of pan-Asia fixed income at UBS Asset Management, Its been extremely volatile, its
been all over the place. Its one thing to layout a manifesto for a President elect that
outlines the necessity to build a wall across the Mexican border and its quite another to
execute the same. The murky world of derivative bets spin the yarn based on probabilities,
for now its a toxic emerging market scenario.

Forward Guidance
Things do change faster than you can image in the derivative trading world, the high
probability of Hilary being elected as the first Women President gave way to Donald
Trump within a blink of an eye. Truth be told, emerging markets, or any other market in
the world should only be gauged by the intrinsic value of the asset. The Global economy
today is a close knit entity,Brexit for one is an example. Its too early to conclude whether
a Brexit vote will emerge as a boost to the global economy or be a cause of ruin. However
markets did react, only to add value to assets which could yield returns in the long run.
Donald Trump as a President needs to put the United States of America back on its feet.
He needs a positive and inclusive policy that will merge the world into a strong business
force. One that can create jobs for the United States and keep the global economy alive and
kicking.For those who believe in the mean reversion in asset classes,value investing in
emerging markets make a lot of business sense, once the panic settles down.

Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways are solely the personal views of the
research team. Users are advised to use the data for the purpose of information and rely on their own judgment while making
investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022

Disclosure
Dynamic Equities Pvt. Ltd. is a member of NSE, BSE, MCX SX and a DP with NSDL & CDSL. It is also engaged in Investment Advisory
Services and Portfolio Management Services. Dynamic Commodities Pvt. Ltd., associate company, is a member of MCX & NCDEX. We
declare that our activities were neither suspended nor we have defaulted with any stock exchange authority with whom we are
registered. SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued
advise letters or levied minor penalty on for certain operational deviations.
Answers to the Best of our knowledge and belief of Dynamic/ its Associates/ Research Analyst: DYNAMIC/its Associates/ Research
Analyst/ his Relative:

Do not have any financial interest / any actual/beneficial ownership in the subject company.
Do not have any other material conflict of interest at the time of publication of the research report
Have not received any compensation from the subject company in the past twelve months
Have not managed or co-managed public offering of securities for the subject company.
Have not received any compensation for brokerage services or any products / services or any compensation or other
benefits from the subject company, nor engaged in market making activity for the subject company
Have not served as an officer, director or employee of the subject company

Article Written by
Shivaji Ghata