This week, we speak with Ruchir Sharma, Chief Global Strategist and head of the Emerging Markets at Morgan Stanley. He been with the firm since 1996 where he oversees a team of 25 people and manages $20 billion in assets.
He was raised in Delhi, the son of a military officer, and had been writing a newspaper column for India’s largest financial daily, the Economic Times, since age 17.
A frequent contributor to the Wall Street Journal, Financial Times, New York Times, Foreign Affairs, he is also the author of the highly regarded book Breakout Nations: In Pursuit of the Next Economic Miracles; he just published The Rise and Fall of Nations: Forces of Change in the Post-Crisis World.
He describes the four “Ds” of the modern world today: Depopulation, Deglobalization, Deleveraging, and De-democratization. These are the geopolitical factors driving huge changes across economies. This is different than the era from 1950 to 2008: An era of rising population growth, increasing productivity, rising wealth for the middle class, and increasing trade.
He has a 10 point basis for evaluating emerging markets:
-Demographics, people matter
-Local Politics are important
-States need to be efficient an right sized
-Income inequality is an issue; look at billionaires – those coming from innovation (good) or corrupt industries (bad) are telling
-Geography sweet spot
-Factories and investment first (vs curse of commodities)
-Currency and exchange rates matter
-Inflation and Financial stability
-Debt is powerful drag
-Hype Watch (curse of the cover story)
He enjoys foreign films and goes to festivals regularly, noting that film is a great way to get a feel for the local culture of a country. When asked for advices, he tells people to “Live life in parallel, not in series.”
All of Sharma’s book recommendations are found here.
You can hear the full interview, including our podcast extras at iTunes, Soundcloud, and Bloomberg. All of our earlier podcasts can be found iTunes, Soundcloud, and Bloomberg.
Next week, we speak with Louise Yamada, the grande dame of technical analysis.
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