All crashes or dislocations or recessions are followed by: These few people saw it coming.
What makes the current global events odd is that everyone knows about the negative to low interest rate problem that is pushing every saver to invest in faltu assets - trying to chase yield - or the China real estate boom and the bad asset pile, and how theie forex reserves are depleting, etc.
Japan cant control its currency, and Brexit may cause the eurozone countries to begin leaving the Euro.
There was a great piece on MLPs recently - people like yield and they forget the safety of the principal.
And Gross made a sensational tweet about how low interest rates are gonna blow up like a supernova.
A lot of big funds are super cautious and are holding onto cash.
So, what does all this mean?
Again, I turn to Howard Marks and say that the pendulum of collective human emotions is towards cautious and not towards euphoria.
Agreed that there is a herd movement towards higher yield - be it junk bonds, structures, emerging markets, etc.
That said, commodity prices are still super low - - but China has yet not wound down its bubble of commodity demand and supply.
I strongly believe that a few months from now, or hopefully, a few years from now, people are going to turn back and say - Man, we saw all these things happening and we ignored them.
I wonder what WB would say?
Make sure that the business can always make it through any downturn - that is all that an investor needs to worry about. The business.
What makes the current global events odd is that everyone knows about the negative to low interest rate problem that is pushing every saver to invest in faltu assets - trying to chase yield - or the China real estate boom and the bad asset pile, and how theie forex reserves are depleting, etc.
Japan cant control its currency, and Brexit may cause the eurozone countries to begin leaving the Euro.
There was a great piece on MLPs recently - people like yield and they forget the safety of the principal.
And Gross made a sensational tweet about how low interest rates are gonna blow up like a supernova.
A lot of big funds are super cautious and are holding onto cash.
So, what does all this mean?
Again, I turn to Howard Marks and say that the pendulum of collective human emotions is towards cautious and not towards euphoria.
Agreed that there is a herd movement towards higher yield - be it junk bonds, structures, emerging markets, etc.
That said, commodity prices are still super low - - but China has yet not wound down its bubble of commodity demand and supply.
I strongly believe that a few months from now, or hopefully, a few years from now, people are going to turn back and say - Man, we saw all these things happening and we ignored them.
I wonder what WB would say?
Make sure that the business can always make it through any downturn - that is all that an investor needs to worry about. The business.
