Stock Market Investments: Spring Cleaning
Category : Finance
Recently, the markets have been a little wobbly. Some panic has been created by the appearance of inflation. Deflation was the biggest worry not too long ago. Before that, it was something else: bird flu, bearded terrorists and acid rain, global warming, and other mayhem. It does exist. In fact, it is higher than commonly reported. However, I have doubts that it is the monster being destroyed by the frightmeisters.
Gold and the 10-year Treasury yield were the only two dogs to not bark during recent spring storms. Both didn’t move much. Importantly, the global system that keeps inflation down in Asia has not changed. Wage costs in the https://rqdclearing.com/clearing/ and Europe are driving inflation more than commodity input price. However, wage costs can still be lowered by China and India’s constant supply.
We have seen one of the healthy corrections that shake out the weaker parts in the speculative forest. There are plenty of unconvinced dumb money flows around, as well as many leveraged and aggressive funds that make their living off the edge. It’s best to ignore the noise they make, but it is better to ignore them.
It’s worth noting that the average annual salary for the top 26 global fund managers was 363 million dollars. A certain Mr Simons was the top man and raked in 1.5 Billion for himself. His customers were charged a 5% administration fee, and he took 44% of the profits. It’s nice work, if you can get it done that way.
Global economic performance is still quite strong, equity markets are fairly priced (at approximately 14 P/E this years’ expected earnings), and global corporations are enjoying the best times. However, volatility is to be expected and it pays to have substantial cash reserves in case of an emergency. Even if there are problems, they don’t necessarily mean the end. These problems can be followed up with solutions, and life continues.
We recommend larger companies with large capital than we do small. Both Hong Kong and Singapore are good options. The oil companies continue to make huge amounts of money. Schlumberger (SLB), is an essential stock in the oil service sector. Statoil (STL..OL), is currently cheap. Although we wouldn’t touch tech, it’s encouraging to see prices approach more reasonable levels. Maybe we’ll be able to buy something within a few months. We’ll let ya know when we do.
Finally, if you disagree with the above, and are concerned about the coming apocalyptic inflation: please, get some gold.