Business Plans and Shipwrecks c1850
February 17, 2012
Investment and Wealth Creation ll – Portfolio Equity and Financial Investment
April 1, 2012Investment Thoughts – Conference Review
“I am a man interested in the return of my money, rather than the return on my money” – Mark Twain
“The Debt Crisis is a symptom” – Prof Niall Ferguson
Highlights and Recollections
2 days, 25 speakers, 500 delegates at Calrsbad, California. The 10th investment conference run jointly by John Mauldin and John Lindt of Altegris based in La Jolla.
Niall Ferguson, Woody Brock, David Rosenburg, Lacy Hunt, Mohamed El-Erian, David Harding, Marc Faber..and many others.
Bob Farrel – 10 principles of investing. Markets tend to return to the mean over time, excesses in one direction will lead to an opposite, there are no new eras etc…etc.
The fragility of the global economy will lead to high levels of nervousness, increased volatility of both economic and financial worlds and slow and uneven growth in the developed world. This is now the time for focus on emerging markets but how to invest for advantage ?
Europe will survive but it will be very … tedious.
General sense that the western world has lost its way with fundamentals, deterioration of many cherished institutions… and lack of leadership. Clash of the generations.
Choosing currencies is like the choice of the “ least dirty shirt” .
The absolute return and hedge funds present had all survived. The overall industry not so with some parts leaving a trail of wreckage. There was clear evidence that the concept of Absolute Returns makes sense which explains that this is now a significant part of most High Net Worth investment portfolios. ( now with less equities, less bonds, so more property, more direct and private equity, and more alternate strategies )
Thoughts
The debt crisis is a symptom.
Trust yourself. The experts, politicians, beaurocrats, investment bankers, financial advisors, banks will mostly be gone in 25 years as will most gov’t benefits and most employers…there will be others in their place.
This is the time for long term thinking on asset allocations. A changing world.
There is no obvious choice on currency. Least dirty shirt. So spread the risk.
The world is likely to have a subdued recovery as the developed world gets through and sorts out its debt crisis.. China and Asia may slow in any event although that is still significant growth compared to G7 to G20 and with the leverage of a new middle class.
Unlikely that equities are going to be a stand out for the next 3 to 5 years. We may be closing on the end of a secular bear market but likely another down with the debt catharsis .. Equities have been flat with nil return for the last 10 to 12 years. “Many of the fundamentals are not in fact ok” - Roubini . From a long term perspective current equity prices are high particularly looking at the declining share of wages and the increasing share of profits to GDP..and the state of recovery of the economy.
Volatility of financial and economic markets are likely to continue. Risk premiums are higher.
Investing to take advantage of the emerging markets is a challenge.
Blogger
The Pandora Telos
