The Unspoken Truth About Ai Energy Global Wealth Shifts

TITLE: The Unspoken Truth About AI, Energy & Global Wealth Shifts | Global Sectors Masterclass CHANNEL: Thrive by Groww DATE: 2026-06-06 ---TRANSCRIPT--- Unfortunately, everybody has become an trader these days because they are finding that the value of money is falling so dramatically. They are not able to make the rents meet. They see other people making money. So, they want to emulate them by trading that you can buy short-term bonds or you can buy triple rated bonds but you cannot buy the government bonds in this brave new world at this point of time. I was naive enough to think that India can have its own foreign policy and I wrote about that that there are only four countries in the world which can run independent policies. US, Russia, China and India. US has energy. It is rebuilding AI. Russia has energy. It is rebuilding AI. China is having lot of things. India unfortunately neither has AI nor energy security.

Uh hi thanks for joining us on Thrive by Grow. It’s lovely to see you. Thanks Radika. So there are so many things that you called out when uh everybody else was not thinking about them whether it was dolization or an emphasis on gold. Uh so what is it that you were seeing and the rest of world rest of the world was not seeing it.

So actually uh the world changed after 2020. 2010 to 2020 was the best period for investors. So we we’ll have to just go a little bit behind to just understand why why we took that call. 2010 to 2020 US oil production went from 6 million barrels to 13 million barrels. It’s like creating a new Saudi Arabia out of nothing. Uh there was no need for macro guys because everything was stable in the world. It was the most beautiful world. You know US dollar was stable, interest rates were coming down, money was going into US. it nothing needs to be thought about. Then came CO and after CO two things happened within 12 months US added 40% of new money supply in a matter of 12 months between 2000 and 2021. So it is the 250th anniversary of United States. So think about 40% of new money was created in a matter of 10 months between 2020 and 2021. Effectively I could say that the value of your uh salary actually you know the value of your salary went down by 40% because the currency 40% more currency was printed so that happened in 2021 2022 everybody uh remember that Ukraine Russia war at that point of time something very interesting happened they just sanctioned and you know seized uh Russia’s FX reserves so when I looked at both the things put together when adding new money supply in United projects and secondly seizing of Russia’s FX reserves that is what the brave new world it was very apparent to anybody that that is the time that something had changed and that was the time that where where we took the call that this is where some which has worked for last 10 15 years from 2010 to 2020 will not work for 2020 to 2030 then came darization then came re-industrialization US wanted to get back its job. US wanted to industrialize. All these things are actually continuing from the that day onwards. But uh the starting point was 2022 2022 when everything changed actually

and of course we have to talk about COVID and you mentioned that too. Uh now your CFA U society presentations I think one of them you have termed uh brave new world after co. Uh so if we talk about an Indian investor uh who’s not following perhaps global macros on a daily basis, is there something a structural break that has taken place that they’re underestimating or not paying attention to?

Yeah. Uh actually Indian benchmarks are made up of consumption only. We India and US both are consumption oriented countries. In US 70% of you know their GDP comes from consumption. Till last year for the first time it is coming from AI. In India, I would add IT plus banks, you know, all these things put together 50 60% of the benchmarks. But in the brave new world, money will be made outside the benchmarks simply because the government is saying I want to divert the resources away from consumption into production. I want my supply chains back. And this started happening even before the Iran war. after Iran war I’m sure every country including India will double down on energy security critical material security when did you last think about that India is talking about you know coal to gasification they’re talking about nikabar you know uh thinking of deep sea drilling all these things are happening now even in US rare earth metals when did so think about it it was Chinese companies you know Chinese government which used to buy stakes in Chinese companies Here US government is buying stakes in US companies when in a capitalistic society how can a government buy stake in the listed companies. It has never happened before. So actually this is what the brave new world is. The brave new world is completely different than the old world which existed between 2010 to 202122. You can say

this world is more about uh you know uh re-industrialization, ddollarization, uh supply chains, just in case changing from just in time. So all these things and I had created a slide where you know where I had listed out 15 things which existed before uh to 2020 and now the 15 things what have changed after 2020.

So uh you know it’s interesting you’re talking about uh countries trying to be more self-reliant now right uh a shift towards manufacturing as well reindustrialization is something you just spoke about where does India stand today because one gaping hole that everyone is talking about is that R&D uh we have not focused on AI we have missed the bus manufacturing the whole China plus one concept India has not been able to optimize that opportunity as So where does India stand as it were in the new reemerging global monetary order as well?

I was naive enough to think that India can have its own uh you know foreign policy. I was naive enough to think and I wrote about that that there are only four countries in the world which can run independent policies. One is US. US everybody knows US, Russia, China and India. But the thing is US has energy. It is rebuilding AI. Russia has energy. It is rebuilding the L. China is having lot of things. India unfortunately neither has AI nor energy security. So over the next 5 years I hope hope is still the right word simply because over the last two years manufacturing as a percentage of GDP in India has not risen above 14% what it was 2 years back. I still believe that the kind of resources which the government is putting the kind of resource allocation which the government is trying to do will lead to uh India’s manufacturing as a percentage of GDP will move from 14 to 15 16 possibly 17% over the next 5 6 years and that is what I don’t want I’m not saying I want India to do that thing it’s now India has decided it’s that like The US has decided that we need to rebuild our own supply chains. US is very apparent. You can see that thing what they are trying to do. India is still not apparent.

So now you know as we see this global monetary order of the past 30 years actually fracturing changing uh how does this translate into a typical portfolio of an HNI right uh whether it’s to do with US equities dollar bonds. So how are you what’s your perspective on how these things should be changed or weighted should be uh you know uh played around with what’s your take now on what that HNI portfolio looks like

okay uh so in my view uh so let’s look at where we are today US is 26 27% of global GDP but 60% of global market cap it was the lazy investing which started in 20134 which every fund managers continued to add US date and dollar was also stable. So they continue to add a weightage on on US assets. I think in the brave new world uh what we will see is US share in global market cap actually topped out in 2024. It is already down 3%age from the top. US share in global market cap will continue coming down over the next few years. Rest of the world shares in global market cap will continue moving up. Long-term bonds have no place in the brave new world simply because governments are indebted and they want to industrialize. That means they need to borrow more money from the future. So there will always create pressure on the bonds. You can buy short-term bonds or you can buy tripleated bonds but you cannot buy the government bonds in this brave new world at this point of time. And you need to reallocate or allocate your money to rest of the world. You need to allocate your money to supply chains rebuilding. So uh I would say this is how pine tree is invested. Uh up to 30% is US assets. Uh 30 35% in commodities and commodities or commodity uh you know equities put together and 30 to 35% in rest of the world equities.

It’s it’s uh I think that’s a very clear direction uh that you’ve given to our audience in terms of how Pineree is thinking. But you know there is a contradiction that is confusing a lot of Indian retail investors right now. Uh because on the one hand we keep hearing that money is leaking out out of US mega tech cap and India is the destination for that money. But then on the other hand we see that FIS have been ruthlessly uh selling Indian equities for over a year now. So can you clear this confusion for us what is happening? Yeah.

Yeah. Okay. So when I said rest of the world uh okay uh India is still not got its flow and I’ll tell you why it has not got it. Uh go back to 2013 to 2023 our nominal GDP was growing at 12%. Quarteron quarter come analyze it was 12%. Corporate profitability is a function of nominal GDP. So you had a very good corporate profitability. After Lok Saba election is then our spending pattern also changed. We went from capeex to OPEX more subsidies and we did not allow our currency to depreciate. The previous governor did not allow the currency to depreciate. Moreover, our nominal GDP has come down to 8 9%. In this brave new world where the nominal GDP is 8 to 9% in India, corporate profit will be lower than what it used to be from 2013 to 2023. Plus, what do fi own? FIS own what is there in the benchmarks? Everybody’s favorite is banks and it look outside the benchmarks. There are massive winners getting created in the sectors where the government is saying I’m serious. This is where we are looking at over the next five seven years. So why are you looking at your benchmarks? Your benchmarks don’t represent tomorrow India’s tomorrow. So if you tell me okay you know so the people who are not looking at benchmarks for them there are enough opportunities. There are companies which are growing at more than double the nominal GDP quarter over quarter in India. Unfortunately, they are not in the benchmarks.

Yes. So I wanted to ask what are the sectors? What are these companies uh where the opportunity exists?

So I had come to on your channel I think a year or two year back I talked about four sectors and that is where it’s been there. I’ve not changed anything. One is the electrification. I keep on writing about electrification. It is not about India. It’s a global phenomena. Okay, electrification is a very simple. There is a very big ecosystem of electrification. Secondly, there is defense technology. You’ve seen what India has done over the last, you know, we used to be 25% used to be indigenous for uh defense technologies. Now 60 65%. Your defense exports have gone to 50 60,000 cr possibly 100,000 1 lakh cr in the next four five years. The third is engineering tech. There’s lot of engineering work from rest of the world which is coming to India. The only thing which did not work and I you know because of capacity constraint was tourism in India and yes there was something on wealth management. Absolutely. So I I had not looked at anything outside these uh you know these sectors because there’s enough opportunities in these sectors. Why have to look at anything outside the sector? Yes. Tomorrow my government tells me uh you know no we want to do this also. What is that new thing? If they want to tell me something new then I would want to look at there. I think the time is coming where government is actually be determining the credit cost for different sectors depending upon the they think is a priority for them and it is not only India. Let’s not single out India. It’s happening worldwide. India is just adopting what is happening worldwide. So why think from your point of view in this brave new world where 60% of the GDP in France come from government 45% of GDP in US comes from government more than 30% of GDP in India comes from the government why not think from the government point of view what they want to do now unfortunate yeah go ahead unfortunately most of these companies are not in the benchmarks your large cap benchmarks large cap benchmark Sorry.

Okay. Understood. Now, you know, you spoke about uh the signals that are coming in from the government. What did you make of uh uh you know, the advisory of sorts that came in uh from the prime minister about delaying gold purchases or delaying uh foreign travel? What did you make of it?

So, the situation is actually bad on the fiscal front. Obviously because of election you had to delay the price increase and even before that thing whatever discount you got it from Russia was actually paid out in the form of subsidies you know all those kind of yojas which is there in India so the fiscal situation is bad you know only from oil front but even from fertilizer front situation is bad and that is why what he’s saying is I need time to just rebalance my fiscal give me some time to rebalance my fiscal. So this is I think a temporary measure otherwise I strongly believe that you should not be holding USD at this point of time and Indians were doing smart thing actually Indian housewives are the biggest winner. They’ve always been buying the same thing again and again irrespective whatever has told them and now even in you know what is going on in western world they’ve been proven right. So I think it’s a temporary measures we need to balance our fiscal. So that’s the only reason in my view and India is not the only one which is doing it. Every country is trying to do that thing.

Sure. You know so you spoke about you know Indian women and Indian housewives who’ve been you know buying gold year after year. Now uh Indian HNIS are also asking this question and you know the woman sitting on inherited jewelry or the person who bought SGBS uh the one in gold ETFs are they accidentally really holding the right macro hedge according to you and also uh what should the actual allocation size really be given the current scenario?

Look the first answer is very clear. Yes, they are sitting on the right macro hedge. Uh for the simple reason next few years US wants lower US dollar. Look if you want to manufacture in the country you need to make it very attractive for foreigners to come and invest in your country. It cannot happen if your currency is costly. But if the currency is cheaper, you know how NRIs will flock to India funds dollar rupee goes 200 right? as the currency becomes cheaper they find it much more that’s the same way in USD they are saying for the next few years we’d want lower currency and actually see for the first time in Iran war the bond deals are higher and US dollar is not higher every previous war every previous war money has moved into US dollar and US treasuries leading to higher US dollar and lower US treasuries for the first time it is leading ing to higher US bond yields but not higher US dollar. Something is changing already. So for the next few years, US is saying I want to rebalance my economy. For that I need lower US dollar and possibly lower US bond yield. So something is coming over there. If that is a thing, some other currency should be willing to bridge that gap. If US dollar is not the reserve currency or it’s a dimish reserve currency, China is saying I don’t want to be the reserve currency because you have more you know there are more liabilities associated with becoming a reserve currency. You need to run current account deficit but you know China runs a very big current account surplus. So China says I don’t want to be and I don’t want to pull the shipping line across the world. That is not my job. I don’t care about that thing. So for the next few years till the time US deficit continues to rise you need to continue to own gold. A time will come I do not know when when you will have another reserve currency or possibly US get reindustrialized again next five six seven years and says I’m getting ready for my back the responsibilities which comes with a reserve currency and that is what gold is telling you gold is saying okay nobody’s willing to take the reserve currency mantle I’ll be the reserve currency for the time being

for the time be gold. But what other option could be there if not the dollar? Any hard asset? Okay. talk any hard asset you know any you remember that uh you know replacement theory asset replacement theory which 25 30 years back I think ashar mata talked about somebody who’s having higher fixed cost assets in the ground in this coming rebalancing coming re-industrialization coming redd dollarization the value of those assets will continue to rise

uh let’s you know focus back on Indian equities and we were talking about uh how when it comes to emerging markets. Uh Indian equities are still being considered uh perhaps on the more expensive side. Uh so you believe that uh we are more likely to see time corrections, sideways movement uh than sharp crashes as earnings catch up to valuations. So uh if you rate it for us right now plainly, India is by hold or is the correction perhaps not completely done even now?

Give it 6 12 months it will be done. Look the correction can come either through equity valuations coming down or currency falling. It’s the same thing in my view. It’s the same thing. So let’s say currency. So if Iran would not war would not have happened and oil was $80, I would have been very sure the correction is over. The time correction is over. Iran war has created one more uh you know uh there is now one more thing to think about simply because India is dependent upon oil prices you know 85 90% of our imports we import all that oil once I know where the oil price stabilize if you tell me in 69 months this war will be over and oil will stabilize around $80 I would say the time correction will be over So it can I I happily it is coming best through currency making things cheaper for everybody to invest. So it can happen either ways.

So there’s also a view that even if uh you know the war were to completely stop in the next week or so and oil prices stabilize the recovery of the loss that we have seen will take much longer because we’re going to see uh earnings getting impacted in the next few quarters. Um what do you make of that? Because you know uh there and when we link it to valuations and market correction uh how do you see it?

You’re right. But let’s say the war gets over tomorrow. We know there is a two quarters of disruption. But after two quarters of disruption we know where we are headed for. Market always discounts the future. No always discounts the future. So what market needs is a clarity. And if somebody tells me the next two quarters will be bad of this company or this particular sector but I have the clarity beyond two three quarters I’m not going to wait for that I know that is going to come market always disc market is very efficient that way but first we need to see the disruptions where are the disruptions coming we need to hear in the kamis corn call or the some sectoral thing like those helium things the fertilizer thing the nitrogen related thing the sulfur thing it has still to come We need to see how we need to see how much is the damage. Once we are aware about the damage, it is much easier to invest. You need to visualize what can happen in 5 years. As Stanley Draal Miller says, today’s stock prices have no meaning. You have to visualize what can happen in the next two years.

So it’s interesting that you know you brought up uh where India will India’s young population may be headed in the next 5 years. we may be uh you know given access to aging Asian economies it’s already happening to to some extent I just want you to elaborate and expand on these themes a little bit because I know you’ve written very recently about this

so uh western societies are aging dramatically aging whether you go from South Korea to even China we don’t get the numbers of China South Korea China Taiwan the entire Europe Canada where I stay Canada US is actually still So why did they start immigration? You know they started unrestricted immigration few years back. You know that thing right now there are some immigrants which do not assimilate in the culture. They want to change the culture. So the west love affair with unrestricted migration is over. But still the societies are aging. I believe the Indian healthcare worker is an answer over here. So there was recently an ad Israel had asked for 2,500 nurses from India. They were willing to pay two two and a half lakh rupees a month. Just a simple thing. Now GCC countries will need to be rebuilt after this war. You know that thing, right? Ukraine, Russia needs to be rebuilt. Where do you find the cheapest workers in the world who are willing to work? The good work ethics who assimilate in any society, keep their heads down, work. Western world has realized it is India. You will have western world leaders coming to India to beg India for bluecollar workers. You’ve already seen Russian prime minister there in India. Everybody’s talking about can you send us some workers. Then there is one recent theme about we don’t have people who are willing to fight for us in Canada. There’s just no population people don’t want to fight. It’s a matter of time you will have Indian the ugly weeds where there was lot of controversies. they will be given you know they’ll be uh you know let’s say a country like Canada or in European country will actually be willing to you know invite them with open arms and give them maybe citizenship to fight for unfortunately you know fortunately or unfortunately for these countries so if you are a blue collar worker in India if you are an unskilled guy in India get some skill get some skill and once you have that skill you have massive opportunities in rest of the world and rich countries. Rich countries, I’m not talking about poor countries.

Very interesting. I think this is an interesting thought uh something to ponder about. But you’ve also spoken about the AI race and uh you’ve said it’s ultimately constrained by power, not chips or or talent, right? So India has a massive data center buildout underway. uh but there are some serious gaps uh infrastructure gaps uh energy infrastructure to uh you know in particular is India credible AI investment destination for global capital or uh even in this front we are perhaps uh we’ve missed the bus and we are a decade late

no I think there is something going on over there honestly I’ve just seen only announcement nothing more than that but two interesting thing happening in the western world which might not happen in India GCC countries are no more you know after this Iran war they are no more the easiest place to put data centers now because there’s a risk now associated with that what is the war is going on in US lot of counties are voting against putting a data center water related problem energy related problem you know pollution problem and I think that they are finding India to be much better but the problem you will also face is even India is is you know there is a water scarcity in India you have lot of solar power but you have don’t have the grid having said that thing I think you will find huge amount of data centers being set up in India good for environment bad for environment I’m not going over there but I’m saying it will be easier to put it in India compared to any GCC countries and think about it this way what happened in India Pakistan for or you know that operation zindur India showed that we can defend our skies if I’m a data center company I will look to go into that country where a country can be secure this is a new thinking process in my view these mega cap tech companies will be thinking about it so you will find that wherever there is a security premium they will not go over there and in all these things I think India India is is actually very well positioned.

Uh you know it’s interesting you said that because earlier as an investor you didn’t really have to think to a very great extent about geopolitics. Yes you did you were monitoring prices but as an investor how aware do you need to be today of the geopolitical changes that seem to be happening at a much higher frequency now than we’ve seen in earlier decades.

So the empire has become weak. This is the same empire which should have kept our military umbrella on rest of the world. Correct? China able to get its copper from Chile. Why should India be able to get its own oil from anywhere in the world without any navy escort? Means you know that was because US was US was saying I have that military umbrella. I am policing the shipping lines. I’ll take care of free trade and commerce. What you’ve seen now after Iran US war is that US is saying or we have we know US cannot take care of that responsibility anymore. If US cannot take care of that responsibility anymore, you need to put geopolitical premium on each and everything across the world especially anything which is through waterways through se C and most of the thing comes through sea only right. So that is why you need to be aware about geopolitics in the changing world where you know that the hegeimon the reserve currency is not able or it has become weak that it is not able to keep the world safe.

Things are changing rapidly indeed. uh let’s focus on the Indian investor once again and you know talk about real estate because that has been the sort of primary wealthb buildinging engine for most Indian families in previous decades and they’ve sort of prioritized uh real estate over equities over gold as well uh in a deglobalizing inflationary world does it hold that position in a well- constructed portfolio even today or you feel real estate is something that is now being displaced

I will not hold real estate in tier one cities not at all and I’m not talking about this thing today I’m talking for the last 2 three years I’m saying the same thing look there’s lot of lot of real estate uh gains had I even come from esops plus the salary increase of these white collar workers right now those salary gains are not there esops are not making money in any white collar job plus there is no increment mental job requirement in white collar industry. Why would I hold any real estate in any of these four five places except for a place where you have a GCC global capacity centers are coming? I would hold real estate only in tier 2, tire three towns where the new manufacturing facilities are coming and possibly now in seven sisters including West Bengal because I believe India will go for a massive infrastructure spend in around that seven sisters, West Bengal you know uh obviously for other reason also but there is a massive infrastructure spend coming so if there is a I would invest where either there is a manufacturing boom coming there’s a government infrastructure coming I will not want to invest where the white collars workers stay

but it should be part of the portfolio look it should be a part of the portfolio but it should not be you the way there was a real estate cycle that cycle is over that cycle is no more there you want to have your first house obviously you buy first house irrespective of whatever is a price but if somebody wants to be an investor might not go for invits and reads why do you want to buy real residential real estate uh in a you top those four five cities metros which we keep on talking about.

Okay, I think that’s a fair point. So you know today we see that HNIs are much better informed. Uh they are more informed about new kinds of products as well PMS, AIF and all of that. Uh but do you see what is the biggest gap that you see in their understanding and what is also the most costly one?

So actually um family offices today are much more uh aware than the HNIs because family offices are building the team within the family office. They’re not depending upon outsiders. They’re building the knowledge. HNIs are depending upon outsiders knowledge. So that is the gap because HNIs depend upon the wealth manager or somebody who tells them there’s a new product but they don’t have the any knowledge built up. So I would say that I would find family offices to be much better positioned in a changing world and whatever new products can come in western world after five seven years you’ll find the same products coming in India.

No, but then that that’s a quandry, right? Because there is capital that they want to invest uh but they may not want to wait till they understand a product. So what’s the best way to uh for them to really deploy this capital safely?

Why why go to those kind of products which you don’t understand? You can’t just go just because something is working for the last 12 months or you know India is not working for last 3 years. let’s go out and invest abroad without understanding what kind of products you are getting into that thing. So I think it is important for you to first build up knowledge and that is I put a lot out over there but that is on global level. There are enough people in India I’m pretty sure if you listen to them they will tell you about different products. Uh so you’ll have to build up your own knowledge without before putting any money into the products which you don’t understand.

Okay. So we have a little bit of a an example or perhaps advice to take from you. Now if someone walks in with 10 crore rupees today, they want a globally aware inflation resistant um inflation resilient not resistant India anchored portfolio uh built for the next decade. Could you walk us through how you would go about constructing that?

Look India I will not look at it honestly. I do not invest you know there is no public money I invest in India it I it becomes much easier for me to do it globally I’ll tell you the reason India is just one country you have six seven sectors right but when you are investing globally there is always a bull market somewhere there are always a particular asset which is 100% aligned to your thinking process so I find that there are much more opportunities globally uh to invest Just to give you an example, I did talk about oncology ETF because I see cancer cases going up big time. Is it a decadal theme for me? Yes, it’s a decadal theme for me. Can I buy uranium? Because we know what is happening in nuclear energy, right? Across the world. Can I invest over there? Yes, there is a uranium meetup over there for me to have a long-term call over there that I know the supply demand scenario for the next 5 to 10 years. So there are a lot of examples like this thing because there are hundreds of themes available globally and India you have same five six themes within which you will have to allocate and reallocate your money. So how do I invest in those themes uh you know when I have much bigger uh you know canvas of themes to invest with. Okay. Because you’re asking me a lot of India things. I do not spend I do not spend even 10% of my time on India because that is not what problem I do investing something.

Okay. So let’s talk about something broader and you know there are always these bubbles uh you know uh that one there’s narrative building around certain uh industries sectors etc. right? uh how do I as a retail investor uh separate the narrative from the fundamental or the core value of the thing?

So you will not be able to do it. We are in a democratization. You know the the information is democratized. Retail investor unfortunately likes to buy the next shiny object. The one which has worked in the past and you do not look at uh you know uh one investing should be boring. The profitable investing should be boring and what you buy today you have to think from 24 months down the line. You are not thinking from tomorrow’s point of view. So I found that in retail investors and I think this is your data or Zeroda’s data. 91% of retail investors don’t make money. Unfortunately everybody has become an trader these days because they are finding that the value of money is falling so dramatically. They are not able to make the ends meet. They see other people making money. So they want to emulate them by trading that thing. I would say that if you are you know uh if you’re investing in something just think from 2 3 years down the line what can happen what can visualize from 2 3 years down the line not today what is going on today just don’t don’t uh you know uh chase something because it has worked in the last 3 months

I think that’s a very uh clear signal that we’ve got and an optimistic one to uh end this conversation on thank you very much for joining us on tribe by Uh thank you Radika. Thank you to everybody.

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