Marc Faber was on Asia Squawk Box on Monday and among other things spelled out everything that is wrong with financial assets and he said that markets will be unattractive for years to come.I obviously do not know whether he will be right but I write a fair bit about exploring portfolio choices that have a shot of working if he is right.
Included in the discussion would be commodities, certain currencies, countries where the money is clearly flowing into (takes in multiple catalysts), things that benefit from inflation, successful absolute return strategies, infrastructure and a few others.
There is no shortage of places to look but the work load for this is big.
Short post that I'll finish with a little bit of humor and pop culture as I settle back in after getting back from the wedding in Fresno.
A couple of days before their wedding, our friends took us to a place called Powell's Sweet Shoppe in Fresno which has every type of candy you ever remember having eaten as a kid.
They also had various energy drinks (looks like Red Bull but I do not know and am not going to drink it) with different cartoon themes on the cans including a Flaming Moe. I could not stop laughing and bought a can.
The only candy I bought was a half a pound of fruit flavored Tootsie Rolls; very difficult to find and very tasty.
8 comments:
Roger,
You're a big yield curve kinda guy, what's your take on the steepness right now?
Sorry if you had something in the comments, I just searched the articles over the last couple of weeks and didn't see that you commented on that.
Thanks.
the slope has improved, the yields are all very low and I am not sure whether a better slope matters yet. perhaps the biggest distortion for the financials right now is perception.
Good thing you didn't drink "Flaming Moe"....
ingredients mislabled....
http://www.xoxide.com/stewies-mind-erase-elixir.html
and after watching below I drank
some....yikes!
http://www.thedailyshow.com/video/index.jhtml?videoId=176740&title=headlines-its-the-stupid-economy
sorry for long links...no time
to tiny url...have a good day.
here is the video link.
FWIW, Bloomberg has an article today warning that currency appreciation in most of the emerging markets is over.
I am keeping an eye on the yield of the 10 year bond, which sits at 4.1% today. One has to think that with CPI at 5%, the 10 year could be seeking that level, which might have the affect of pulling money out of equities.
Roger,
In your opinion what happens if U.S. sovereign debt is downgraded? Is it likely? Is it the end of the world?
I've seen this mentioned as a possibility in several commentaries lately. Maybe you've commented on this, but I missed it.
Thank you.
i think it is unlikely with everything that is going on now. the visibility is greater however for a future downgrade. might seem like double talk but things need to progress down a certain path, IMO, for there to be a downgrade.
where it gets complicated is that a down grade would have ripple effects in many many places due to the unhealthy codependent relationship the US seems to have with many other countries, meaning what would a downgrade do to other countries?
maybe that should not be a consideration but it would be.
depending on how it is telegraphed is could be nasty but i think it would start to price in ahead of time, if the market does it correctly it would not have to be calamitous on a global scale.
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