Our exploration of simple trend-following continues on crypto-land: Simple BTC and ETH Trend-following. One caveat: Indian tax-domiciled entities should stay away from this, thanks to Nirmala-tai.
Now that Trump 2.0 is finally here, we’ll finally get to see what he’s actually going to do vs. what he has said he’s going to do. If the first Trump-show is any indicator, expect people to get fired all the time.
Markets this Week
Legendary outflows this month…
… with more pain expected due to continued Rupee devaluation.
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
How Much of Cross-Stock Momentum Reflects Underreaction? (SSRN)
Many studies find that returns of related stocks cross-predict each other ("cross-stock momentum"). We show that a significant component of cross-stock momentum returns reflect common momentum in factor portfolios. On a dollar-weighted basis, only a small portion of cross-stock momentum appears consistent with underreaction.
Does Trend-Following Still Work on Stocks? (SSRN)
The Who and How of Hedge Fund Risk Shifting (SSRN)
We find strong evidence of risk-shifting behavior consistent with managers attempting to meet performance benchmarks and maximize investor flows. Both the best- and worst-performing funds increase portfolio volatility relative to their peers, as do those below their high-water marks.
Investing
India
SEBI is pushing fund houses to popularise monthly investments as low as 250 rupees, or $3, to expand the reach of equity investing in the world's most populous country. (reuters)
Plummeting rupee could delay India rate cuts (reuters, ft)
Thanks to RBI’s de facto peg against the dollar, External Commercial Borrowings (ECBs) took off after 2022. By early 2025, the stock of ECB debt had grown to $273 billion, an increase of one-third in just two years. (business-standard)
Not including bribes, companies face so much red tape in India that it leaves them uncompetitive before they even start. (bloomberg)
China wants India to be an integral part of its own supply chain rather than a substitute for it. Different methods are being applied in the pursuit of this strategic objective. (indiatoday)
On NREGA: it took over $4 of government spending to generate an incremental dollar of rural income. (ft)
row
How German industry can survive the second China shock (cer)
European stocks offer earnings stability in surprising places (reuters)
Odds & Ends
The US government wants to ban TikTok but it has opened the Pandora’s Box instead. Americans are flocking to a Chinese app called RedNote that poses more of a threat to security and privacy than TikTok does (reuters, nbcnews). And they are trying to learn Mandarin, pushing up Duolingo shares (cnbc).
I’m in love with an A.I. boyfriend.
Does your husband know?
Meme of the Week
