Sunday, October 18, 2009

my market outlook ...

folks, i do not think/feel all financial assets will crash this time as they did last october (stocks, interest rates, commodities, real estate, ...)
i think we will see an inflationary rally in commodities and the steady rising gold price remembers us about that inflationary scenario, doesn't it? (some older guys often mention the 70ties in that inflationary context => ?). in my opinion we will prolly also see the demise of the USD soon as the world will not for ever deliver products & services to usa in exchange for self-printed green papers ... btw, the €uro is not any better, so i further think there will be some next monetary reform which will re-animate gold/silver backed currency/currencies again.

bonds? i do not consider bonds in my 'universe' because they are too boring for me + my account is not properly capitalized for bond investments + in an inflationary scenario are bonds the worst solution possible, so why to think about them?
stocks? i'm very bullish on precious metals (pm), so i'm even more bullish on pm-stocks, but why? is it just because i'm already so heavily invested or is there any fundamental reason for further increase? i'm really not sure ... unlike the most other gold bugs i even do not consider gold @ $1.000 cheap (you still remember my gold-price-manipulation blog post?). of course, there is the huuuuuge danger of inflation where all hard assets should perform well against paper assets (cash, bonds, today's low interest rate bank accounts, ...), especially well should perform silver (poor man's gold ) ... what about general stock markets like djia, s&p 500, dax? hmmmm, on the one hand there will always be some hot stories/technologies out there which will perform phenomenally (at the moment prolly batteries, lithium, electric cars,
green energy + pm explorers) and on the other hand the major stock indexes contain also many commodity stocks (e.g. with alcoa, chevron + exxon is dow by 10% commodity related :), thus i do not think stocks will drop in price soooo dramatically as last october as there was no money in the markets at that time and many positions have been liquidated at any price because of margin calls etc.
otherwise, stock prices will reflect the development of corporate earnings in the long run, here i'm really sceptical and i think the recent upswing on the markets since march moved the prices far too high, esp. the financial stocks are IMHO sooooooo overvalued, but i wouldn't go short... we never know how much money will the governments and their small dirty central banks add to the system and who will directly receive that new money next time ... maybe the banks/insurances again?
ps: i always look for purchase opportunities in the stock markets and always have few stocks on my watch list where i only wait for some fresh money to buy them, but not now! i've invested the major part of my remaining funds before my summer vacation between may and august [by some coincidence of luck & fate it was just few weeks/months before mining stocks really took off :-)] as i've been waiting for the gold rally to come in august, but there is not a single 'i-really-want-to-buy' stock on my list now ... are stocks too expensive already? nevertheless i'm not going to sell any stocks soon anyway unless the 100-years-dow-gold-indicator tells me to do so, it's an (inflationary) bull market, i think ...
"No one can know the precise level of net debt at which the United States will lose its reputation but a few more years like this one and we will find out." — Warren Buffett

"Fiscally, we are in uncharted territory." — Warren Buffett, August 19, 2009
(illustration by lara tomlin)

addendum, november 16, 2009:
folks, i was sooooooo damned right on the markets this time and so is my gold + silver + commodities portfolio, huhuuuuu!
i'm not sure if it was just question of luck, but the commodity and stock markets tweeted that since weeks to me ~ they rose like hell no matter how disastrous the economy news was ... so i thougt the folks out there will buy anything at any price just to get rid of their paper money :-)
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