Aly-Khan Satchu

Seismic Geopolitical Events Have Little Effect on Markets

Dear Matt,

A very interesting piece. May I challenge a couple of your conclusions.

The blow off top to $147.00 was substantially driven by fears that the US or Israel was readying an attack on Iran. Quite properly, the consequences of such an attack were impossible to model. Iran is not Iraq. It is a materially different proposition. Once the President ruled this out the market slipped into free fall.

Re: Gaza

The Gaza strip is best characterised as a prison. Therefore, besides lobbing a few totally ineffective rockets, there is no risk of reaction or contagion. Therefore, Gold and Oil were unable to rally. It hardly compares with the toppling of the Shah [for example] when Gold surged last time around.

Re: India and Mumbai

The Sensex is one side of the coin. Have you had a peek at the Karachi stock Exchange? Thats certainly reacted. The Sensex had already tumbled from over 20,000 to below 10,000. The attack whilst alarming was not material.

Re: Russia and Georgia.

Putin certainly served notice of a sort but within a few weeks, the Economy cratered world wide. Had that episode occurred in the early months of the year the reaction would have been entirely differently.

I wish you a wonderful new Year.

Aly-Khan Satchu
rich.co.ke

I have written a commentary all year here
www.rich.co.ke/rctools...

Please use the calendar to see comments and when.

All Eyes on the U.S. Dollar

Good Grief.

Very bright eyed and bushy tailed? I have tended to find that Patriotism whilst a laudable emotion, is entirely useless when it comes to investing.

The $ rally has ended this morning as the United States deploys the Zimbabwe monetary strategy which is to print notes and hyperinflate.

The US Government has had to intervene because the Global Free markets are not prepared to pony up any more risk capital for those who have so patently diplayed an ability to lose it.

The response is correct but lets not kid ourselves that it is the best response in a truly abject position.Transferring as yet unquantifiable losses from a defunct Banking Sector to the Taxpayer is not an act of muscularity, I am afraid. Its a last resort.

Aly-Khan Satchu
rich.co.ke

2008 Country Returns

Thanks.

Visually this is the equivalent of being smacked in the face. There is a new world out there a la Columbus when he found America. The rewards for the Intrepid Investor are in the Frontier markets.

Aly-Khan Satchu
rich.co.ke