The Bubble Spotter

Published on
May 22nd, 2019
Duration
28 minutes

The Bubble Spotter

The Expert View ·
Featuring Vikram Mansharamani

Published on: May 22nd, 2019 • Duration: 28 minutes

Vikram Mansharamani, president of Kelan Capital and author of “Boombustology: Spotting Financial Bubbles Before They Burst,” reveals the potential side effects of a world overcome by closet-indexing and passive investment by active managers. His multi-lens indicators that analyze the world’s tallest buildings and the high-end art market are a captivating way to connect the dots in a macro economy that’s oversaturated with conflicting data. Mansharamani then discusses India and China in particular. Filmed on May 15, 2019 in New York.

Comments

Transcript

  • SG
    Sven G.
    7 July 2019 @ 08:34
    super interesting... i pulled up the Sothebys chart, what Vikram said is 100% reflected in the charts. Prices is currently about $3 from previous all time high... will be interesting to see what happens once the new high is reached. Thanks for sharing,
  • PG
    Philippe G.
    2 June 2019 @ 22:19
    Great points on the employment-demographic situation in India - http://www.bbc.com/capital/story/20180601-the-jobs-in-india-that-attract-millions-of-applicants
  • SB
    Stephen B.
    26 May 2019 @ 18:06
    On building a middle class in India, what commentators are usually reluctant to mention (for obvious reasons) is that the caste system is still deeply ingrained there, which acts as a drag on mobility and therefore growth. While far from perfect, China's social structure is far more flexible.
  • ii
    ida i.
    24 May 2019 @ 06:43
    as for the debate below on why retail investors all purchase ETFS, it is also because they don't consider liquidity risk, we have seen in the past that when there is a panic, liquidity disappears from many ETFS, and spreads explode. Since it hasn't been a problem YET nobody worries. Consider also that at least European law (MIFID) pushes the advisor to diversify the client's portfolio, so ETFs and funds are always ok for the law, even if they are illiquid. A low risk profile client can easily invest in illiquid corporate bonds, but not in liquid stocks so much. so the real problem is that there is a diversification - index mentality bubble, while liquidity risk is ignored by the retail investor. I believe that this will be a real problem
  • AB
    Alberto B.
    23 May 2019 @ 17:08
    There is a book called The Skyscraper Curse by Mark Thorton. The reason it works is explained using Austrian Economics framework which is much more deeper than pointed by Mr. Mansharamani.
  • DR
    David R.
    23 May 2019 @ 15:41
    His thoughts on India are interesting.
  • DS
    David S.
    23 May 2019 @ 15:23
    his thesis on India is poor he called the Indian election hotly contested to fit his narrative yet Modi just won in a landslide.
  • PC
    Peter C.
    23 May 2019 @ 01:02
    Excellent interview with alternative perspectives. We want to hear different views, ideas,... And I do believe in the tallest building indicator. Bring him & other bright people forward.
  • DL
    David L.
    22 May 2019 @ 23:10
    People are nitpicking on some of his rationale, but I thought Vikram's observation on the impact of passive investing in price discovery and the obfuscation of job losses attributed to globalization vs. automation were insightful. Great interview.
  • AA
    ALBERTO A.
    22 May 2019 @ 21:27
    what is passive investing? you can invest in indexes, do your own allocation...and even just do it actively selling options...passive investing is given the money to other people who also charge you fees and commissions. Nowadays everyone in RV should be allocating their own money.,,,,and yes...you can beat the S&P with enough education....that's why we are here....not a lot of insights on this interview coming from an academian !
    • AA
      ALBERTO A.
      22 May 2019 @ 21:42
      i meant besides indexex...etfs...TLT, EWZ, XLE, etc
  • SU
    Shakeel U.
    22 May 2019 @ 20:30
    Nothing insightful here, just points out the obvious.
  • JB
    Jeff B.
    22 May 2019 @ 19:49
    I was negatively biased from the moment, when Vikram suggested why investors flock into passive...it definitely not because "they" believe markets are efficient. Let's face it - it is just damn hard to beat the SP500 on a constant basis, also considering such low costs. This argumentation is cheap. I was hoping for a more sophisticated interview.
    • AC
      Andrew C.
      24 May 2019 @ 03:36
      I concur; Passive is attractive because run-of-the-mill workers can't predict which active investor will beat the SP500, and they know fees/commissions kill their returns. The easiest decision to make; do I put my money with Michael Burry, or Kyle Bass, or Scott Davis or just with the SP500 EFT (and think no more)? I suggested this before: I would love RVTV to have a formal debate on Passive Vs Active.... Proper arguments, for and against ......
  • DS
    David S.
    22 May 2019 @ 19:36
    Out of the box thinking. I will watch again to understand better. DLS
  • MT
    Mike T.
    22 May 2019 @ 19:21
    quick question for Vikram......are you a self directed invester/trader using your own Capital?
  • NT
    Norman T.
    22 May 2019 @ 19:06
    I think Starbucks' prospects in India are irrelevant to the case. You did not see them in China at the equivalent stage. What India will invent, in this industry-lite era, will be different, and home-grown. And they do have relevant tech skills in coding etc. Maybe the shift from agriculture to the cities will be much slower, but there can still be a significant middle class.
  • RA
    Robert A.
    22 May 2019 @ 17:21
    Vikram has developed an excellent communication style from his Lecturing background and coupled with some interesting different points of view on widely discussed, but often misunderstood topics , make this a very easy to watch thought provoking video. Vintage RV from both a content and Curation perspective. Nice work again RV.
  • MN
    Maverick N.
    22 May 2019 @ 15:46
    Good interview. Should have Ed sit down with Vikram for a long form discussion. While most macro pundits are predicting that the next two decades are going to be about India's growth story due to a) demographics b) low debt to GDP c) growing middle class, Vikram's perspective is a breeze of fresh air as the other side of the argument.
  • AR
    Andreas R.
    22 May 2019 @ 13:43
    Hard to see how the decision to build a world tallest building in Saudi Arabia would be a good timing indicator for the next bubble..how many tallest tower were built and did not precede a mkt crash? Surely there are plenty more accurate indicators that shows people’s exuberance..
    • DS
      David S.
      22 May 2019 @ 19:41
      I agree. Alone it is only a recognition of hubris. Coupled with other information, it can show how far the hubris has reached. It is one starting point. DLS
  • JH
    Jesse H.
    22 May 2019 @ 12:38
    I hate passive investing - there, I said it. Reminds me of the movie Idiocracy where everyone just consumes en masse and there is no real thoughtfulness or reflection on the impacts of our choices.
    • DS
      David S.
      22 May 2019 @ 19:42
      What you may hate is that it has worked well for a while. I think the tide is turning. Let's hope so. DLS
  • JH
    Jesse H.
    22 May 2019 @ 12:36
    Very interesting analysis and makes a whole lot of sense. The ongoing disruptive impacts of technology / automation certainly have major implications for growth and productivity and the relative parsing of labour vs. capital.
  • JB
    Jon B.
    22 May 2019 @ 12:03
    great thesis, very plausible analysis and interesting to listen to as a different perspective that reinforces established viewpoints.
  • GK
    Giannis K.
    22 May 2019 @ 11:33
    Solow's Paradox: you can see the computer age anywhere but in the productivity statistics.
    • Nv
      Nick v.
      22 May 2019 @ 12:00
      You can however see Social Media in the lack of productivity. Time wasted on Facebook, Instagram, WhatsApo, Twitter and Netflix have been on a steep uptrend.
    • DS
      David S.
      23 May 2019 @ 20:45
      It was reported that a sales person in France cannot, by law I think, take a cell phone or other type device on the floor during work. Is this true? DLS
  • ns
    niall s.
    22 May 2019 @ 10:02
    I liked it and found his frank contrarian opinion on India enhanced his credibility. More of this guy.
    • DR
      David R.
      22 May 2019 @ 12:40
      Yep, interesting. And so India has a problem with too many kids? Well, China and the West have the opposite problem with too few kids. A mutually beneficial solution seems simple?!
    • HC
      Howard C.
      22 May 2019 @ 14:10
      Yes, very interesting, would like to see this guy again. The new geography of manufacturing is already evident just about everywhere. It seems for low-wage arbitrage Bangladesh and some African states are getting the business with only Vietnam continuing to attract factories based on productive labor, efficient ports, etc; and Mexico due to proximity as he stated. I already see countries such as Cambodia and Thailand losing out due to a variety of reasons .... low skill levels being one of the factors. India is so complicated , he did not even mention the bureaucracy or the fact that some states are easier to navigate than others, thus, hard to generalize in the context of creating jobs for 1million/month.
  • CT
    CHRISTIAN T.
    22 May 2019 @ 09:51
    Feels like analysis could be enhanced by getting views on central bank policy and effects on bubbles as highly relevant for shape of current environment. Also, is it valid to presume that India's industrial revolution has to be product based rather than service based? Culture lends itself well to tech, higher education and better English perhaps enabling a hub between DM and EM as service needs are still developing both within corporations and on consumer side. Just my thoughts from watching
  • DW
    David W.
    22 May 2019 @ 09:38
    Really interesting interview.
  • RK
    Robert K.
    22 May 2019 @ 08:35
    Very good stuff. Nice take on passive "investing" (basically an oxymoron) that infested the whole institutional space.
  • JB
    Joe B.
    22 May 2019 @ 08:05
    This interview was exhausting to listen to. I wouldn't buy a used car from this guy. He's another academic who acts as if he's discovering new ideas, and he talks in worn out sound bites. There's no meaningful or original thinking presented here. Even if you can get past the non-specific generalized academic speak, he has many false ideas in his arguments. Like so many academics like him, they try to overstate the impact or the rate of change that will occur in an effort to raise fear and uncertainty. "Technology", he says, is going to destroy low cost labor providers. Technology waves do impact economies, but so can many other things. And he doesn't even consider the fact that people who are driven find ways to leverage their other advantages and they figure out a way to adjust. But academics don't go that deep to understand any problem. They like to stay on the surface, because it's easier to tell a story that way. There's nothing new or original in this interview or his message. And now I've droned on too long writing this comment! See what a negative impact watching this video can have on you? Save yourself! Don't waste the 30 minutes watching this video.
    • CC
      CHRISTOPHER C.
      22 May 2019 @ 19:13
      Agree with you Joe...
    • GO
      Greg O.
      22 May 2019 @ 19:27
      Agree 100%.
    • EF
      Eric F.
      23 May 2019 @ 15:57
      Disagree, well worth watching.