Good afternoon
Trump is about to become completely crazy…he was apparently suggesting to inject bleach into the body of corona-patients, creating an uproar of doctors. Does this guy think he is god? Probably not, but one higher up - not god, but Trump!
Germans are wondering, wheather GDP could fall by 6-7% this year…they are making a big fuss out of the worst fall of business confidence since 1950! You wonder, in which world these economists live….certainly we see a big contraction in GDP - and certainly, business confidence is on it´s kneath! How would you answer, what business conditions look for the near future? Hey, we are having a lockdown - we have never had that before, so what do you expect! And nobody at this stage would have a clue, what conditions will look like in say 3 month time….so wait and see, and continue to be a cautious investor, investing only what you can afford to hold for the long term, just in case you have to! The same government advisors are expecting GDP to rebound by 5% in 2021.
I personally continue to believe ( and that is a gut feel, not science! ) that everybody wants to have a go again as soon as possible, and that people will look ahead - that´s what the equity market usually does, and that´s why I thinlk we definitely have seen the lows. I am a bit surprised, that the market is VERY hesitant to have the correction I have been waiting for …..but perhaps it won´t happen?
I would not rule out something terrible like investors loosing confidence in central banks or currencies - but even in that case, I would much prefer to hold productive capital like equities, or hard assets like commodities and certainly gold! And what about gold equities? They are mostly making good money these days, and some - like good old Evolution - are paying a very handsome dividend as well. I think that dividend is much saver than a dividend from Deutsche Bank, Daimler or Caterpillar!
The sun is shining - spring in full swing - people are dragging their feet and want to get back to work and want to make some money - with fresh spirits! Perhaps that´s the reason why stock markets have been so positive??
let´s hope so - I don´t know!
Have a nice weekend!
WS