I can see being bearish on all currencies, since they will all overprint.
For debt, I think there is some things that are mispriced enough to provide a margin of safety and a good return, including the loss of buying power because of the weaker currencies. This is probably only about 3 to 10 % of total debt issues worldwide. Non financial Corporate debt is still oversold.
In equities, the obvious sectors of precious metals, specially metals, oil and gas firms with expanding reserves and low debt, and some tech stocks. There are also some sound financial institutions in insurance and medium size banks, but that is more of a minefield.
I expect the bottom of the L starts this summer, and just continues for 3 to 5 years, folowed by a gradual trend up.
All the stimulus - US, China, and everybody else - will start kicking in over the next few months.
I don't expect the world economy to get back to 2005-2006 levels of activity. For many people and companies who were doing great during that time, the bottom of the L may feel like 1932 for homebuilders, aspirational luxury products, expensive vacation resorts, resturants, etc.
But I don't think it will be 1932 for everybody.
Just because some people aren't eating lobster & foie gras dosen't mean everybody is starving. |
