Animal Spirits Podcast - Talk Your Book: The Bull Case for India

Episode Date: April 22, 2024

On today's show, we are joined by Anupam Ghose, Managing Partner at System Two Advisors to discuss: why the China story is different than the India of today, India's macro tailwinds, how GDP growth translates to higher stock prices, risks involved when investing in India, and much more! Find complete show notes on our blogs... Ben Carlson’s A Wealth of Common Sense Michael Batnick’s The Irrelevant Investor Feel free to shoot us an email at [e-mail] with any feedback, questions, recommendations, or ideas for future topics of conversation.   Check out the latest in financial blogger fashion at The Compound shop: https://www.idontshop.com Past performance is not indicative of future results. The material discussed has been provided for informational purposes only and is not intended as legal or investment advice or a recommendation of any particular security or strategy. The investment strategy and themes discussed herein may be unsuitable for investors depending on their specific investment objectives and financial situation. Information obtained from third-party sources is believed to be reliable though its accuracy is not guaranteed.   Investing involves the risk of loss. This podcast is for informational purposes only and should not be or regarded as personalized investment advice or relied upon for investment decisions. Michael Batnick and Ben Carlson are employees of Ritholtz Wealth Management and may maintain positions in the securities discussed in this video. All opinions expressed by them are solely their own opinion and do not reflect the opinion of Ritholtz Wealth Management. The Compound Media, Incorporated, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. For additional advertisement disclaimers see here https://ritholtzwealth.com/advertising-disclaimers. Investments in securities involve the risk of loss. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. The information provided on this website (including any information that may be accessed through this website) is not directed at any investor or category of investors and is provided solely as general information. Obviously nothing on this channel should be considered as personalized financial advice or a solicitation to buy or sell any securities. See our disclosures here: https://ritholtzwealth.com/podcast-youtube-disclosures/ Learn more about your ad choices. Visit megaphone.fm/adchoices

Today's Animal Spirits Talkerbook is brought to you by Simplify Asset Management. Go to simplify.competre-India Opportunities ETF. That's Simplify.us. Welcome to Animal Spirits, a show about markets, life, and investing. Join Michael Batnik and Ben Carlson as they talk about what they're reading, writing, and watching. All opinions expressed by Michael and Ben are solely their own opinion and do not reflect the opinion of Ridholt's wealth management. This podcast is for informational purposes only

and should not be relied upon for any investment decisions. Clients of Ridholt's wealth management may maintain positions in the securities discussed in this podcast. Welcome to Animal Spirits with Michael and Ben. Michael, if you sell me on consumers spending money, that's all I need to hear.

Right? For a macro theme. You are a sucker for a good spender. So we talk about India has been in the news. I don't know. It's been a nice, for the last, what, 12, 18 months, the stock market. And it's one of those fool me once situations, like, listen, emerging markets, growing middle class, consumers going to spend money. I've heard

this before. And it didn't work out that well for the bricks. Or China especially, right? Yeah. Is there a end? And so India is apparently going to be the next China. A billion people, growing middle class, coming out of poverty, ready to spend money. And, and, And the question that we pose on the podcast today is, okay, what makes India different? Yeah, this is an interesting episode. I learned a lot particularly that it sounds like they're not just reliant on, now listen, okay, the demographic tailwinds is obviously an enormous part of the story, but there's real companies there that are not just reliant on other emerging economies.

Like, they're selling massive deals to Western economies. Yeah, it actually, the story makes sense. The thing that I've realized is that India has always traded at a valuation premium to the U.S. So it seems like it could be prone to huge boom and bust cycles, if that's the case. But the opportunity set for consumers reaching a specific per capita level of GDP, and then that's when they decide to, okay, we've passed the needs level, now we're going into the wants and desires and discretionary spending. That whole thesis makes sense to me.

So for today's show, we talked to Annapum Gosch, who is a managing partner at System 2 Advisors, which is a sub-advisor to simplify and they have an active India ETF. It's more concentrated but he had some really interesting thoughts on not only a macro setup but also investing in India and some of the opportunities there. So here is our conversation with Anupon.

We're joined today by Anapum Ghosh. He is a managing partner in System 2 advisors for the Simplify Tara India Opportunities ETF. IOPP, is that correct? That is correct, Ben. All right. So wanted to get into this. We've had a number of people on the show in the last couple of weeks and months talking about China. And I feel like I've heard about the emerging markets opportunity for years now, especially coming out of like the 2008 crisis. The idea was the U.S. and the rest of developed economies are going to have slower growth because of demographics. And then in the emerging markets, you're going to have way faster growth because there's tons of people. They're younger, better demographics. There's going to be more consumer spending. And so I'm curious to hear your take. on India as a whole, like, why isn't India China? What makes it different?

Because there's a billion people and economic growth is faster and a rising middle class and the consumer class. So what makes it different in terms of transiting that into stock market returns? Ben, and that, I think you've hit the nail on the head, which is the demographic dividend. And I'm proud to tell you that I'm a dropout

of a PhD program in economics. And while economists have very, very, very arcane, jargony sort of definitions of what the demographic dividend is, I have a much more pedestrian explanation, which is, if you have a large enough population and your per capita GDP gets to about $2,000, discretionary consumption sets in, you begin to demand a $1,000 phone, $59 TV, you know, $10,000 car, et cetera, et cetera, that sets off a chain of self-sustaining consumer discretionary spending, which takes GDP per capita from $2,000 to $6,000 in a straight line. That translates to about two decades of 10-ish percent growths.

We saw that movie in China, 95 to 2015. Now they're caught in the middle of the trap, and they're headed down like it. Or they're sliding sideways on. In India, the demographic dividend is just started where the per capita GDP is about $2,300. dollars. So we believe the next two decades for India will be absolutely the best decades in terms of consumer discretionary spending. And that is reflected in the average age in India, which is a full 10 years younger than that of China. So we're having like a batan handoff here from like China had their 20, 30 years of growth. And India is going to take that and do the same

thing similarly at least. I'm sorry, Ben, did you call it a batan? Sorry, baton handoff. What did I? Close enough. But so my big question is, so China had this unbelievable growth, but their stock market went nowhere, it seems like. So why is India different in terms of the stock market then? How is that growth going to translate into better returns for investors? Great question, which is India is a plural, multi-ethnic democracy with relatively, you know, sort of compared to China, a free economy, freedom of expression, a democracy. India has been a mercantilist economy or a country for the last 5,000 years.

What happened in China where essentially, you know, due to the Cultural Revolution and the Communist Party, they effectively wiped out all institutions of, you know, what we deem modern capitalistic infrastructure. And India has always been there. If you look at how old the Bombay Stock Exchange is, it's about 200 years old. So there's always been a sort of a history of mercantilist slash free marketish economies. That had changed somewhat after the country got independence and it took a more socialist turn. But all that reversed again in 1990 when the economy opened up, you know. I was listening to a conversation that you and Brian had and he shared an incredible data point,

which is that 42% of India's population is under 24 years old and only 21% is over age 50. My question is, why now, like India's stock market has been red hot. It's been all over the news. Was there a catalyst or was this just the demographic tailwind of people coming into sort of peak earning years? Like, what exactly lit the fuse? You know, there's nothing that's sort of lit the fuse. There's one watershed event that we can point to saying, this is what caused the growth or the markets to take off. If you go back, if you go back to, say, 2002, 2003, GDP was about $500 billion, today's $4.2 trillion. dollars. Markets, the nifty was 800, today is 23,000. Now, all that is good, but the question

is, where is the GDP headed, you know? By most conservative estimates, in the next five years, the GDP will grow from $4.2 trillion to about $7.5 trillion, where India will overtake both Germany and Japan to become the third largest economy in the world. So as GDP is growing, as GDP is growing, the markets and just beta can use to grow with it. If you look at the last 20 years, that shows you that. Now, again, being a student of the markets and I've been around for the last 30-plus 30-ish years, the market cap of any country is typically between 0.8 times

to 1.2 times the GDP. So the GDP is growing, markets are growing. If the market is in favor, it's more like 1.2 times. The market is not in favor, it's like 0.8 times. So we think that as, you know, GDP grows, the markets will grow. Now, the other thing that's become very, very important these days is if you look at the EM basket, the big heavyweights, you know, which are China, Russia, Brazil, South Africa, Turkey, these are uninvestable countries, in my opinion.

So India remains the only investable country, you know, of the larger EM basket. I think in my conversation with Brian, I made the comment that, you know, I was a Goldman when the acronym BRICS was coined. Today, the only the eye of the BRIC stands. And that's just fact. So with that, you know, Ben and Michael, if you look at India's weightage in the MSCIEM basket, that has grown fairly steadily, like, you know, over the last,

you know, it used to be, and now I'm going to read some statistics to you, which is it used to be 6% between 2003 and 2013, then sort of, you know, it went up to 10% from December 2013 to 2023, and now it's at 17%. So as passive money is flowing in, and that's sort of making the market more attractive as we go. So India's going to pass China's stock market in terms of EM in the next, whatever, five years or so. You know, the thing has been that we have grown up, being Western educated, you know,

we've grown up looking at the world through the MSCI aquiprism, where we say, hey, you know, the U.S. is 40% or 50% of the market cap. So 50% of your assets should be here. EM is 10%. But in the EM basket, this is this and that's that. That's a very naive way of looking at the world. Not a wrong way, a naive way. If you're the head of a manufacturing company, say Boeing,

you don't have an MSCI-AQI-EM strategy. You have a China strategy and you have an India strategy, but that's where you sell planes. So we think that lumping all emerging markets into one lot. And so that gives you a very, very mixed picture rather than looking at the markets or looking at each market separately. Now, and that's the case for India today. There's been the case that the stock market is not the economy. And I think China is probably the poster child for that statement where the GDP grew at, whatever, making this up 6% a year

and the stock market returns were, you know, nothing effectively. What would be the transmission mechanism for which GDP growth in India would translate into stock market increases. Michael, great question. GDP growth in India will translate to higher consumer discretionary spending. Every point in GDP growth translates to 5x of consumer discretionary spending because basic consumer needs already met, all marginal income is going into discretionary spending. If discretion spending goes up, leads to higher earnings, higher earnings just lead to higher prices. So my question is, if we're getting on the India train and we see this economic growth coming and it's unstoppable, basically, why wouldn't you just invest passively in India?

What's the difference? So you have a more active fund and a more concentrated fund. Why invest in a more active approach and what are some of the themes that you see an active approach can help that maybe aren't picked up in a passive approach? Ben, if you look at the passive approach, and I'm not in any way saying the passive approach won't work, if you look at the composition of the Nifty, and if you, the passive approach would be 100% there if you believe the composition of the Nifty reflected the growth in GDP and the growth in consumer discretion pending. If you look at, you know, the heavy weights in the index, they are largely,

IT companies, as you know that India has a large number of very, very large cap, mega-cap IT companies, you know, the emphasis is the world, the TCSs of the world, the WIPRO is the world. The growth drivers for a WIPRO or an emphasis, or any of these big, you know, IT companies is not GDP growth in India. They happen to be from India, but their markets are all in the West. So H-1B policy in the United States, labor laws in the United States have a much more much greater effect on the earnings of these companies than India consumer clothes. So IT is one of them.

Next one is pharma. If you, you know, either of us or three of us, if any one of the three of us has a single generic medicine here in the U.S. I'm bald. Do you have anything for baldness? You know, I'm sure there is, but, you know, Michael Lerick, you know, trip to India for that, you know, they'll sell you something. That's a much, you know.

But generic, you know, farmer. India exports over $120 billion of generic pharma to the United States and Western Europe, et cetera, et cetera. Now, India has the second largest number of FDA-approved manufacturing facilities outside the U.S. I mean, after the United States. So now, if you look at pharma, big pharma, what drives big pharma is Medicare reimbursement policy, NIH reimbursement policy in the UK. It's not domestic growth in India.

So you have large sections or chunks of the index, which are dominated by these big companies. You take oil, for example, crude prices now. There are two heavyweights, Reliance, O&GC, that are dominated by oil prices. Oil prices are set globally. They've got nothing to do with consumer growth in India. So the parallel draw ban is very simply, if you buy the Futsi, thinking you bought UK growth, Futsi's got none to do with UK growth, you know. Similarly, the Nifty, probably about 40% of the market.

the nifty is actually focused on India consumer growth. We are a vast majority focused on the growth of the Indian consumer in the short term, medium term, longer term. And then we play a number of themes around that, you know. Is it as simple as retailers or how far do you, does that consumer feel like? What are the, what are the simple ways it translates? Yeah. So it translates been into things like the country was largely unbanked, still is. So financials and financial inclusion, you know, which essentially is a key part of sort of, you know, the development, you know, of any economy, you know. Finanials are a large part of that.

Now, financials are a large part of that. Consumer discretionary is also a large part of that, consumer staples is also part of that. Because what do you have is, as, you know, the country grows, sort of, you know, wealthier, if you want to call it that and people enter the middle class, et cetera, et cetera, you now have essentially demand for, you know, packaged goods, higher quality package goods, things like that. So, you know, it sort translates into a whole bunch of different industries that and sectors that you can get into, things like hospitals, you know, things like hospitals, the need for healthcare, need for health care, formal health care, things like that are growing at an alarming

based in India, as people have the means to spend for this, you know. It's typical for emerging market country stock markets, and I know it's a broad basket, to trade at a discount to the United States in terms of multiples of earnings, cash flow, whatever you want to look at. I'm curious, what does the Indian market look like, which such favorable demographics, positive outlook? Does it trade at a smaller discount or maybe even a premium? It trades at a premium to the S&P, you know.

It always has. Oh, really? I didn't know that either. It always has, you know. And that is about to get bigger as the amount of money coming into India only grows. Like, you know, I have three children. Thora is my daughter, the youngest one of my three. If she asked me, why's the market going up?

More buyers than sellers, you know? It's as simple as that, you know. It's as simple as that. So are there any parts of the stock market that are cheaper and have a valuation discount that you can see that, like, haven't been, people haven't figured it out yet or not really? There certainly are, there certainly are pieces of them that are not as well followed, you know, and not as hyped. But, you know, we don't typically look at that because India has about 5 or 6,000 listed companies. In our investable universe, there's only about 300, 400 names.

300 names. That's about it. There's only about 800 names that even pass the basic filters, you know, of, say, $150 million in market cap and a minimum trading volume in a day, which is our very first, you know, screen that we run on the universe of stocks, you know. So let's talk about your portfolio. Where do you, where do you come from in terms of your background and security selection? Are you top down, bottoms up, quantitative, qualitative, screens, technical, fundamentals. What are you looking at?

For the IOPP product, we are purely bottoms up stock pickers. What we do is we start with identifying a. an investable universe. So for that, we use a market cap and a liquidity screen, which is at the very basic, you know, level. Then we basically use a bunch of sector-specific sort of factors, things like,

you know, return of investment capital, you know, how asset light is it, et cetera, et cetera. And those sector-specific factors essentially take, take, so the universe down from about 800 names down to about 300 names. And then we apply what we call a four-pillar sort of, framework to it. We look at management quality, which is absolutely the most critical

and the most important of all sort of stock selections or criteria. We look at... Wait, hold on. Before you move on to the other three, and we'll get there, I'm just curious why you say that management selection is so critical to your framework. Again, Michael, if you're going to hold a stock for three to five years, you have to be confident in the quality of the management. You have to make absolutely certain that the management is shareholder. friendly. Now, India is dominated by conglomerates, family-owned conglomerates. We were typically not very efficient allocators of capital. I'll give an example, Michael. You know, Sun comes to the United States to study. He studies computer science. They're in, you know,

XYZ manufacturing. They say, oh, he's just come back from the US. When we start an IT company for him, and they suddenly start allocating capital into this, which we believe is a poor allocation of capital. Management quality, ethical concerns, fraud, et cetera, et cetera, is rampant. You know, what you see in, you know, disclosed financials, et cetera, et cetera. You have to triangulate multiple ways

in smaller companies to make absolutely certain, again, you know, not in the recent past, but, you know, about 15, 17 years back, there was a fairly large IT company called Satyam, listed in the New York Stock Exchange, you know. All the numbers were, a fraudulent, you know.

So how do you quantify management, or is this more of a qualitative assessment? It's a qualitative assessment, but again, we look at how many years they've been a public company, how shareholder friendly are they, how transparent are they in communication, you know, do they really act that way, or do they just say that? Everyone has an ESG policy and this and that. But once you start feeding the onion, you know exactly who's what, et cetera. A lot of companies, as you know, which has been in the news, essentially use, I'll put this delicately,

their proximity to governments, et cetera, et cetera, to enhance the bidding process and that. We stay away from companies like that because that's a worldwide phenomenon. I see that as much in the United States as I see that in India. But if there's a company that, you know, if there's a conglomerate that's particularly close to any sort of government and actually has used its connections to the government to enhance its own, you know, good.

We know that when the government changes and India governments do change, they'll be the first ones out, you know. When you're doing this qualitative assessment, I've heard it both ways from international managers. Some say you have to have boots on the ground. You have to have people there to get to understand it better and understand the culture and understand the people and talk to them.

And other people say, no, no, no, you don't have to. It's easier than ever because the world is flatter. Where do you fall on that line in terms of boots on the ground or not for research? You know, the name of the podcast is talking up your book given the extensive boots that we have on the ground, six or seven people on the ground, four officers, most of them who've grown up in India, know the products called, you know,

have grown up in that ecosystem, that environment. We think there's no substitute whatsoever to having boots on the ground. Boots on the ground doesn't mean every six months you sort of fly in, meet the management, shake hands, kiss a few babies, and get out. That's me. You know, surely are people on the ground

that actually touch and feel everything that they do, you know, that these companies do. I'll give you another example of why boots on the ground helps and why, Ben, when he said that if you're sitting here, you know, you can do it as well, is we've talked about, you know, consumer growth in India. That's a very heterogeneous concept. It is concentrated in different pockets. It's actually a stark divide between urban consumer growth and rural consumer growth, you know, and urban consumer growth, there are pockets, there are states in which is happening. If you're sitting here, India could look like a monolith to you, you know. Couldn't be further from the troops, you know.

So if you've grown up in India, if you've traveled in India, if you know local tastes in India, you're in a much better position. India has 16 official languages, all with their own script. It's actually a collection of 600 kingdoms with the British wove into a country, you know, by imposing common language and common law. I've grown in India, I grew up there. I tried to build a business after I graduated. In 1988, failed, came to grad school here in the United States.

It's only, when I was in grad school, investment biker, you know, name is escaping me. And this is not what happened when he called Jim Rogers. No, Jim Rogers. He just completed that. He came in and he was talking about India on his bike, you know, on his investment biker too, and he said, India is like the Balkans. It's an aggregation of 600 kingdoms woven together into a country by the British by imposing common law and common language, you know.

Now, he said this about the Balkans when they were all part of the Soviet Union, you know. Oh, I think it was just falling apart then. Now, could that happen in India? I don't know. But India is a very, very diverse country. You don't feel that if you're sitting here and you just travel to the big metropolitan cities, which have as luxurious hotels as anyone else, you can sort of not see any of the India. It's only when you start traveling in India and go from region to region, et cetera, you know what the differences are.

How do you take advantage of those? So we spoke about your first pillar, which was management selection. What are the other three that go into your process? The others are around sustainable growth, you know. Does the industry of the sector have a long runway for growth? Yes or no. It is on a secular, on an industry level. And there I'll tell you, what are the threats to the moats, if you want to call it that?

And every manager probably talks to you about this. I'll give an example there. infant formula, a baby food, as we know it, that cannot be advertised in India. So you have big global consumer companies like a unilever or, you know, Proctrin Gamble, et cetera, that have their own consumer formula. As the middle class is growing, the demand for that is growing, you know, because they want a Western brand and they want globally accepted sort of, you know, big brand. But the threat to competition coming in there is very low.

because it cannot be actually advertised, you know. So we look at those secular moats that exist. And then we look at sort of, you know, the key performance indicators of the companies, et cetera, et cetera, to see, you know, is the most sustainable? What are the threats to it, et cetera? Talking about moats, are you a Buffett-like investor where you're going to hold some of these concentrated stocks

for a very long time or do you have a lot of turnover? No, we do have enough turnover. We do turnover something like 120% a year, which is 10% of it, which is not, like 5% a year or zero, but it's not like what we do in our head fund, you know. We run high-frequency training businesses. We run like head funds where if people sort of hear about the turnover, they're like, whoa, that's not investing.

So that's the business of making money, like, you know. Anyway, here we are looking to hold stocks for three to five years. We have to be comfortable holding stocks for three to five years. And we have our own valuation methodologies, which I can go into an energy. And we have a one-year price target and a three-year price target. So, again, we are looking to hold these stocks for a relatively long period of time, three to five years, you know, at the minimum. Now, sometimes what happens, you know, Ben, is that you get into the stock, it basically catches fire, it goes up very, very quickly, and before you know it, your one-year price target is it, and before you know it, within the year, your three-year price target is it? So we have elaborate reviews to figure out, in spite of the market, rewarding this particular

stock, is it something new that we missed and still got the same runway of growth, or is all the growth sort of front-loaded and the stock price is reflecting that, you know? You mentioned that relationship between GDP and market caps. You said the GDP of India is, what, $4 trillion in change, something like that? So I've done this before where I've compared emerging market, stock markets, their market capitalization to individual companies. So India's stock market must be also in that range, around $3 or $4 trillion total? It's in the $4.4 trillion, you know.

Okay. So we're talking like Apple plus Amazon or something for the Indian stock market, something like that. So in terms of like the runway. And the other thing you mentioned is that you said there's 5 to 6,000 stocks in the Indian stock market, which is interesting because there's in the Wilshire 5,000 now in the U.S., there's what, 3500? So why are there so many more publicly traded companies in India? Is it easier to go public there? What's the story there?

Yeah, there's multiple reasons for that, Ben. One is that the consolidation of the markets in India happened relatively recently where there is only two major stock exchanges today, which is the National Stock Exchange and the Bombay Stock Exchange. If you go back, even 15, 20 years back, you know, every major city had its own stock market. So the Calcutta had a stock market, Chennai had a stock market, New Delhi had a stock market, Baroda had a stock market. A lot of the smaller company listed in these things and just have contributed to the very, very large deal. So, again, you know, while that long tail exists, it's really sort of the larger cap, more liquid names that were most of the action in. And that's kind of the pond that you fish in, the larger names.

The pond that we fish in is, you know, stocks which at least a billion dollar plus in market cap could be slightly there. But so a billion dollars to five billion dollars is considered a mid cap in India. Below a billion dollars is a small cap. About five billion dollars is a large cap. How quickly are the companies that you're investing and growing? Are they like, is it mid-teens or is it like blistering breakneck pace or what exactly? Michael, it's a combination of all of them because if you have blistering growth, but the price

already reflects that, what good is that to an investor like, you know? Right. So, you know, again, I mean, you know, what we do again is we look at sort of company-specific modeling like a discounted dividend model, you know, intrinsic. valuation, and we look at comparative valuation and a bunch of different valuation methodology to come up with our own methodology. And, of course, if the price already reflects that, you don't want to get in bed, like, you know. Anapami, you've been in this business for a while.

What would you say to somebody who's considering an investment in your product but might be hesitant because it's a newish vehicle. There's not a long track record here, and there's not a ton of assets. What would you say to that person? What I'd say to them is very simply, you're buying activity management. to manage India from a very reputed platform simplify. We have India expertise. We've run money in India.

We've got close to about $550 million in the head fund assets. We've got an enviable track record where it comes to the hedge fund world. And we have boots on the ground in India. So when it comes to India Alpha, we know that story really well. We're not saying take 100% of your network put it there. But just how fast India is growing, Every portfolio requires a certain portion of a very fast-growing economy in their portfolio. Anupon, we've spoken a lot about the exciting developments and growth that's occurring in India's economy

and how it's translating into the market. What are some of the risks that investors should be aware of? Some of the enthusiasm about India is about political stability, the Modi government, how well it's done for the country in the last 10 years. elections are just starting, and while there's consensus that Modi is going to win a majority, its price to perfection, any sort of surprises in the election will lead to a sharp sell-off in the market. India is extraordinarily susceptible to crude prices.

80% of our import bill is crude, with the problems that we have in the Middle East since October of last year with the Israel-Hamas war, we were surprised that crude prices normally. move much. Now with Iran directly targeting Israel, we've seen a slight movement up. You know, crude price, India's extraordinarily susceptible to sort of crude prices, you know, there, you know. And we do believe that commodity inflation, sort of higher for longer, would essentially hurt India somewhat, you know, not very much. Last thing is that India is 55% rural, which is largely agrarian economy, which contributes to about 15% of the GDP. However, that's where the vote banks are, so the constant redistribution of income.

If rural growth does not pick up and keep pace with urban growth, typically governments will get voted our power, and it is quite, you know, that's a risk, you know. That's a risk to the markets, you know. The last two of the things I meant, India's had a very stable political environment, unlike most of the emerging markets, you know. I mean, democratically elected now, you know, I mean, India's been a continued democracy since in 1947, except for a two-year stint, you know, between 75 and 77. India's currency has remained remarkably stable for one reason, one reason only.

The government has been very prudent in managing his deficits, and Indian sovereign bonds for the first time have been now included in the J.P. Morgan Global Index and the Bloomberg index, which is going to lead to $20 to $40 billion a year in inflows into India, into the bond markets. So, again, you know, everything looks sort of rosy for India, but I think last sort of, it's in a very poor neighborhood. We've got a failed state. That's a nuclear state to our northwest. And, you know, we're at war with China.

You know, we fought a war in 62. I believe, I mean, even though I believe we are still technically at war with them. There's a 10 or 15,000 kilometer border with a low-grade firing going on, you know, between people, flares up from time to time. but large parts, or 2,000 kilometers that is disputed. So, you know, again, you know, it's a risk, you know, to the country. Where can we send people to learn more? All the information is on the Simplify website, including the deep dive videos and, you know, a lot of the fact sheets, etc.

Okay. All right, Onopam, this is great, really insightful. Appreciate you coming on today. My pleasure. Thank you, Michael. Thank you, Ben. Thanks, everyone. All right.

Thank you again, Simplify Asset Management. Remember Simplify.U.S. to learn more. Email us, anal spirits at the compound news.com.