Is the Bear Market Coming?
If you invest passively, you can skip :)
We had the last years
- a passable currency devaluation (inflation)
- with a globally stable growing economy and very low key interest rates
- commodities that were not close to their highest prices
- no wars in macroeconomically relevant areas and have
- printed more and more money to get a grip on a pandemic, for example.
And because of that, very strongly rising stock prices.
But now it looks like this:
𝐈𝐧𝐟𝐥𝐚𝐭𝐢𝐨𝐧
As we now note: inflation is on the rise (no surprise there) and that is not going to subside anytime soon. We need monetary inflation (rising policy rates), but that in turn slows economic growth and is bad for growth stocks and high valuations.
> Central banks are in a dilemma between inflation and economic growth.
𝐊𝐫𝐢𝐞𝐠?
We have a war that either ends as quickly as it started and Putin backs down because his army is more inefficient than he expected, or a war (between 2 countries that are globally relevant mainly for food) that gets even REALLY ugly as Putin uses all means given (hopefully aside from weapons of mass destruction) to "win" it.
> Scenario 1: possibly a hunger crisis is averted, economic impact difficult to assess for me
> Scenario 2: famine crisis or only humanitarian catastrophe; further danger of world war
𝐑𝐨𝐡𝐬𝐭𝐨𝐟𝐟𝐩𝐫𝐞𝐢𝐬𝐞
Commodity prices are mostly at ATHs or on their way there, which will cause supply chain problems in pretty much any industry should we stay at this level in the medium term.
(People often stop buying commodities above a certain price for fear of not finding a buyer for the price afterwards.)
Especially the oil and gas price wanted to worry us, because many companies depend on it.
> high raw material prices then lead at least to battered margins, higher costs or to put it bluntly: missed earnings
[
𝐃𝐞𝐠𝐥𝐨𝐛𝐚𝐥𝐢𝐬𝐢𝐞𝐫𝐮𝐧𝐠𝐬𝐩𝐫𝐨𝐳𝐞𝐬𝐬 (has been around for a while)
Western companies in particular have been following the trend for some years now to produce more locally again and to place more emphasis on safety than on lower costs. Tesla is not only building in Germany because we are located in the middle of Europe (and not because there is so much skilled personnel in Brandenburg...)
! This point should be taken with a grain of salt, as this is a creeping process. There are still new factories being built in China, it's just that the political risk is coming to the fore at the moment !
> Focus less on the cheaper locations... logical conclusion: evtl more expensive prices etc.
]
Just wanted to get that off my chest, the recovery is going so fast right now.
Bye
PS @SharkAce does this now fall under sourpuss or is this factual
#recession
#personalstrategy
#makro
