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'WOW!' - That’s one way to describe the sharp and devastating sell off we have just witnessed in global markets.
For those that have received advice from me in the last 12 months you know I have been patiently waiting for this event by advising you to keep a large cash position. Now is the time to get excited...
What’s currently happening around the globe could best be described as ‘deleveraging’. What does that mean? Simply put: The world has too much debt and no longer has the means to pay for it. The result is the inevitable unwinding of that leverage and sell off of markets.
The cause of all this is well known by now:
- Too much government spending (borrowing).
- Western economies are not growing.
- Unemployment is high and is not coming down.
- Central Banks are printing money with reckless abandon.
The best analogy I’ve heard on this whole debacle is simply this: The US, Europe and the UK are like the drug addict that has to take ever larger doses to get high. Well, in this case money is the drug and governments only policy response to economic downturns in the last 30yrs has been to flood the system with it at the first sign of recession. In the past this worked but at some point, like the drug user, they either have to go to rehab or die. Thus far the Western world has refused to go to rehab and now the markets have staged an ‘intervention’ and are saying enough is enough.
I LOVE A SALE
So what’s happening is that people are panicking; they’re FEARFUL. As the great Warren Buffet once said: ‘I am fearful when others are greedy and greedy when others are fearful’. In other words, wait until there is blood on the streets then BUY! Right now the streets are flowing red but for the prepared this represents opportunity. Being prepared means having CASH ready to use for these sorts of environments; it also means being psychologically ready to go against the herd. The herd is currently stampeding for the exits and you as an INVESTOR should be doing the opposite of the herd.
WHY YOU SHOULD BE EXCITED
I don’t know if the markets will drop another 10% or 30%; it is possible that we will see more selling. However, as indicated above, many great Aussie companies that will still be around in 25yrs are now selling at HUGE discounts. My question for you is: Do you know what to do NOW?
For those that have received advice from me in the last 12 months you know I have been patiently waiting for this event by advising you to keep a large cash position. Now is the time to get excited...
What’s currently happening around the globe could best be described as ‘deleveraging’. What does that mean? Simply put: The world has too much debt and no longer has the means to pay for it. The result is the inevitable unwinding of that leverage and sell off of markets.
The cause of all this is well known by now:
- Too much government spending (borrowing).
- Western economies are not growing.
- Unemployment is high and is not coming down.
- Central Banks are printing money with reckless abandon.
The best analogy I’ve heard on this whole debacle is simply this: The US, Europe and the UK are like the drug addict that has to take ever larger doses to get high. Well, in this case money is the drug and governments only policy response to economic downturns in the last 30yrs has been to flood the system with it at the first sign of recession. In the past this worked but at some point, like the drug user, they either have to go to rehab or die. Thus far the Western world has refused to go to rehab and now the markets have staged an ‘intervention’ and are saying enough is enough.
I LOVE A SALE
So what’s happening is that people are panicking; they’re FEARFUL. As the great Warren Buffet once said: ‘I am fearful when others are greedy and greedy when others are fearful’. In other words, wait until there is blood on the streets then BUY! Right now the streets are flowing red but for the prepared this represents opportunity. Being prepared means having CASH ready to use for these sorts of environments; it also means being psychologically ready to go against the herd. The herd is currently stampeding for the exits and you as an INVESTOR should be doing the opposite of the herd.
WHY YOU SHOULD BE EXCITED
I don’t know if the markets will drop another 10% or 30%; it is possible that we will see more selling. However, as indicated above, many great Aussie companies that will still be around in 25yrs are now selling at HUGE discounts. My question for you is: Do you know what to do NOW?
To find out more or to book a confidential consultation please contact PJ Patterson on 02 8004 0592.