India looks like Asia’s best post-Covid recovery story, says Christopher Wood; advises buying bitcoin on dip

Further, he also discusses the buzzing Bitcoin in the report. Despite the recent surge in cryptocurrency, Wood remains bullish on bitcoin.

He advises investors to use any dip to buy digital currency. In December 2020, he decreased some exposure in gold in favour of bitcoin.

“GREED & fear remains extremely bullish on Bitcoin and advises those who are not invested to take advantage of any pullbacks. Remember that institutional ownership of Bitcoin has only just begun,” Wood said in his note.

The cryptocurrency has risen 418 percent since the most recent halving in May 2020.

Coming back to equities, Wood believes that rising inflation expectations will boost cyclical and prefers banks and oil-related stocks.

“One of the favoured cyclical areas is, clearly, banks. Banks in Europe and Asia ex-Japan offer over 40 percent upside if they are simply re-rate to a level of one standard deviation below the long-run mean in terms of the relative price to book multiple,” Wood stated.

For any sort of correction, Wood believes there needs to be a catalyst in the form of an economic downturn or a material tightening in US Federal Reserve's (US Fed) policy.

“The risks are building for obviously overvalued US equities, and in particularly high PE growth stocks. But before those risks become reality Treasury bonds have to sell off more and cyclical stocks to rally more,” Wood said.