Over the last seven years if I could have been instantaneously liquid across all of my ‘things’ (let’s not call them assets/capital/or investments !) I am struggling to think what allocation decision I would have made that would have taken me genuinely nearer to a decent profitable position than basically, being held out of moving too much around, and being forced to wait for a price or an opportunity.
My personal position on gold is that it has been the single most profitable ‘thing’ and the only one that provided absolute liquidity all the time.
Looking to the future, I am convinced that we have been living through a massive change brought about by internet platforms and clearance mechanisms that have never previously been available – barely even imagined, quite frankly. And this means the future is a categorically different place when it comes to looking for investment opportunities.
There is a possibility that the media’s general obsession about nominal movement has been a classical mistake – a mistake that is philosophical in its span of consequence – and the main item that holds people back from making money.
The number of companies in the world today who have market-dominating product-based business – such as Coca-Cola was – rather than clever financial scheme-based, and broker managed PR businesses, is rather few.
There has never been a time, when if economic capital and markets are going to survive, product-based innovations were more relevant to the ultimate outcomes – than right now. The BOJ has claimed it is going to achieve 2% growth, yet everywhere there are nothing but deflation pressures. The Japanese used to be the case-in-point for commercialised innovation in products and product design – and I’m looking to them to do it again, although to date I have seen no signs of this. Will history disclose that they ‘have lost it?’
For a finance minister or head of a central bank to talk about ‘2%’ anything is the kind of manipulative tinkering about what you can do with nominal results that to me smacks of political cynicism, whereas a passionately engaged individual is going to talk about encouraging and supporting quality and production. Of course it ‘seems’ that 2% growth is ambitious in the face of nothing per cent US interest rates; but it doesn’t really ‘sound out’ true to me. It’s like making a big noise about very little. 2%. Very little.
We all buy shares and hope they can go up in nominal market price and make us money… There seems little point in searching out good or great products and their parent corporations, if consumer demand is too low and dividends are miniscule and share prices stay down or even decline more. And you can’t really short markets if the Bernankes of the world are intent on propping them all up at ‘stuck’ levels for some purpose known only to themselves, with ‘free’ money.
I don’t think there IS a scenario that caters for a slowly increasing bond yield and a supported stock market all the way. I mean NOMINALLY such a thing IS possible…
And that would mean that the Fed would end up owning virtually the entire stock market equity of all corporate capital in the US and even elsewhere and then face having to write off all these worthless sales-less and productless entities – and somehow yet have the Dollar still a credible currency. This type of scenario is mindbogglingly ludicrous.
However this is where we are heading. NOMINALLY, heading.
I have no idea what it means for real values of real things. I know I can play the game though, if that is what Bernanke and the gang of reptilian conspirators who don’t exist are intent on having happen.
Calvin J. Bear