원문 보기
But longer term, as I said for the last 40 years, anyone who doesn't own any gold is plainly stupid because he is trusting central banks. And how how can anyone in the world trust the central banks? That is a mystery to me that intelligent people trust central banks. My view was that the market peaked out in the November to January period and uh I wrote the report the Trump top on January 1 and my view was that markets would go down largely because the magnificent seven stocks were a very high percentage of the S&P 500.
and also of the NASDAQ. In other words, the markets after 1920 uh 2022 became very narrow. The breast of the market was narrowing and only a few stocks went up and made new highs and the majority of stocks wasn't doing anything. So I was quite negative about stocks uh going into the new year uh 2025.
But the tariffs are obviously not helpful. It's a a catalyst because fund managers they were mostly bullish about stocks. They told the clients go long and buy this and buy that and so forth. And suddenly the outlook for corporate profits is not particularly good and for economic growth is not very good either.
And so they use the tariff issue as an excuse to tell their clients you have to get out of the market. And so there was a a significant selling pressure. But I have to point out that the market as a result of this tariff issue has become very oversold. We haven't had this oversold condition since the COVID crisis in 2020.
And so I think that we can have a rebound here. But by and large my view is that we are in a in a time where there are major changes. You know that like 198182 there were major changes in the sense that inflation began to abate and interest rates began to decline and commodity prices were beginning to decline and so forth.
and we went into a period of 40 years asset inflation. I think the asset inflation is largely over. I think uh from here on financial assets, bonds will not do particularly well, although they may do better than stocks and stocks may not not do particularly well for the simple reason that they're highly priced in the US.
They're more expensive than ever compared to emerging markets. They're more expensive than ever compared to European stocks. uh my sense is that money will flow out of the US into other assets and these other assets who knows I mean I don't think that gold is particularly cheap but equally if I look at asset allocation by individuals by and large individuals don't own any gold or if they own gold they own a few coins but not anything meaningful like 20% or 30% of the assets.
Well, uh, their precedents and in some cases gold goes down with financial assets and in some cases like during the depression in the 1930s, gold and gold shares performed well. Also in 93 197374 during the bare market, gold performed well. But there are other periods when it didn't perform well. So my view is if you want to take advantage of fading opportunities, my view would be to look for stocks that go down the most and become the most oversold or stock markets overseas or so and then buy them for a rebound.
But longer term, as I said for the last 40 years, anyone who doesn't own any gold is plainly stupid because he is trusting central banks. And how how can anyone in the world trust the central banks? That is a mystery to me that intelligent people trust central banks. This is the first bull market in gold and precious metals where equities have actually not grossly outperformed the precious metals, the bullion, the physical.
Same case for silver. But I think that uh wealthy people say a billionaire he looks at the financial system he must know that something is not right. I mean anyone who looks at the financial system the derivatives the leverage the money printing must conclude that something is not right and it will come to an end.
So if you're wealthy, you have $100 million or $200 million or a billion, then maybe you say to yourself, I want to own something in physical form, not as you say a counterparty risk. That is a very good expression. And then you buy most likely physical. you buy a ton of gold or a ton of silver or platinum but many financial institutions they can't do that the pension funds and so forth and so the trustees they go to the fund manager and tell him by the way I mean what is your exposure to gold what is your exposure to precious metals and the fund manager says no we We don't have that.
We think that Nidia is a better bet or Tesla. And then the trustees one day they say well everybody's buying gold. Why don't you allocate say at least three or 5% of the portfolio to gold. But for the fund manager, it will be easier for him to buy stocks than to buy the physical because he may not be equipped to buy the physical.
He may be equipped to buy ETFs that I concede. And lately the money flows into ETFs has been high after being disappointing for two years. But recently it's picked up. But again when I look at people around the world wealthy people of course they will say well we h our family has gold especially the women who will say but when you dig and you ask how much do you really have it's usually a few coins I mean I I I'd be interested and you can ask your viewers one day how many of you own more than 5% of the assets in gold.
I'd be surprised if the number was high even though you are well known as a metals say advocate precious metals advocate. Now the question is of course someone may say is gold cheap? No. Compared to oil, it's actually expensive. But for most people to store oil is very cumbersome. It's difficult. But for them to they can own oil stocks which are very depressed.
Uh but to store oil is difficult whereas to store silver, gold, platinum is very easy. But this has been my view for the last say 12 months that emerging markets and Europe are relatively inexpensive. And I mean I find the magnificent seven stocks in America to be grossly overvalued. But other people have different views.
You understand? I remember I was at an interview in year 2000 and there was a portfolio manager who disagreed with me because I said that Cisco was vulnerable to additional competition and so forth and he gave me a lecture why Cisco would be the stock to own for the next 10 15 years and the super pulls about tech stocks They will tell you why you should own Nvidia and Tesla and so forth.
I look at the valuations. I think the likelihood that they will perform well is very small. And we have various analysis when stocks sell at the current pees in other words high price to earnings. the the subsequent return for the next 10 years is between minus 2% and plus 2%. In other words, is very low.
Uh if you buy emerging markets, you can buy them at say seven times earnings, then the subsequent return is probably reasonably Good.
Comments 0