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At all times, investors should focus on how to make money or not to lose money and how to preserve wealths. So that essentially never changes as an investor. The only thing that may be a little bit different now is that the popular markets are expensive. Say the US stock market statistically is expensive.
Emerging markets and European market statistically are not particularly expensive, but they may be not as cheap as one would think when you take them by themselves. They're cheap relative to the US, but not extremely cheap by themselves. But I think there are opportunities in emerging markets because I believe that money will flow out of the fun stocks and the semiconductor stocks in the US into other areas of the investment spectrum.
And the other areas that are looking attractive are in my view Latin America, emerging markets and Hong Kong, China looks to me to be relatively inexpensive. No, actually foreign capital is still flowing into the US into the bonds and into US dollars and so forth. By definition, because of the trade and current account deficit, foreign money will always flow into the US.
But a sign that less enthusiasm exists is evident from the weakness of the US dollar. I mean, if you look at the market action of the dollar, against the euro, against the yen, and especially against precious metals since Mr. Trump was elected, I have to say that the market doesn't have much confidence in Mr.
Trump's economic frownness. I think the market is highly skeptical of his economic policies. The greatest gift for precious metals from God was the election of Donald Trump. A man who is completely ignorant of economic facts and by nature a man who doesn't believe in repaying debts whose companies mostly have gone bankrupt and who essentially had to reschedu debts or didn't pay debts.
In my view, a man like this is a gift to holders of precious metals. I think there is a chance that under Mr. Trump, the US will default on its debts for the first time ever. Well, are you sure that he's only going to stay three and a half years? But, you know, bankruptcies occur slowly and then very fast.
And I would not underestimate the ability of Mr. Trump to run something in the ground in three and a half years. I think he is the man who would have the talent for that. And I'm saying this as someone who would have voted for Mr. Trump because I could never have voted for the Biden clan and for Miss Camala Harris and so forth and I would have voted already twice for Mr.
Trump. But I cannot believe that in the US among all the intelligent people and capable people and capable managers there's nobody better suited to run the country than Mr. Trump and Miss Kamala Iris. I think some people would be more qualified. So far the experience to grow through protectionism hasn't been favorable.
My sense is that the opportunity for growth would be elsewhere. I think the fact that the US and other western countries could buy goods at a very low price from China after the opening of China at the end of the 70s. The open door policy began in 78. But the fact that thereafter China industrialized and could supply the world with cheap goods I think was for global growth very favorable.
I want to emphasize that contrary to what Mr. Trump and his ignorant protectionist advisor would suggest. How do you want the US to become rich if they want to produce shoes at home? It's ridiculous idea. You should let countries like China, Vietnam, and so forth produce the Nike shoes and so forth.
You understand? And the US could specialize on where they dominate or where they are strong in technology and so forth. A tariff is a tax that hurts the lower classes of societies more than the rich people because the rich people their principal expenses are their motor yachts and their private planes and so forth.
they are all registered in foreign companies and so they don't pay any value added tax or sales tax. Well, if you look at weapon sales in the world, the US is by far number one. So, if someone tells me that the US can't manufacture the weapons they need in a war, I would think that it's incorrect. But it is clear that say the South Koreans can manufacture a uniform at a lower cost than the US.
But if you and Mr. Trump and all these protectionists think that the US will become rich by producing uniforms in the US for war instead of buying them cheaply in South Korea, China, and Vietnam. Your dreaming deficit or the expenditures of the defense department will go up substantially if you make it all in the US.
The logic by the protectionists is for me incredibly naive. The fact is that in modern manufacturing, labor has diminished because of the automation and the robots and so forth. So you have now factories in China whereas maybe 10 years ago they employed 3,000 people, now they employ maybe 200 or 300.
It's all robots. the trend over the last 100 years where governments spent say 10% of GDP in 1900 to now in Europe around 50% of GDP in the US I suppose with local governments it's also close to 50%. If this trend continues and we go to 100% government, what you end up with is a disastrous economy like we had under communism and socialism in Eastern Europe, in Russia, in China, in Vietnam until these countries opened up and became market economies based on the capitalistic system.
All I know is that given these uncertainties, the stock market is very highly priced. All I can say is the stock market is anticipating a beautiful future as Mr. Trump would say, great prosperity and peace in the world and so forth. All these conditions are highly debatable. I have friends, they're very well educated.
They're wellconed. They think we're heading into World War II. Some people think it's begun already. Of course, they're inflationary. We would be going into war with a high debt already. We have a high debt in peace time. So from this starting point, it would go up and it would give the government an excuse to print more money.
And for Trump to stay as a president, the US doesn't need to have an election in war times. I wrote a report, the Trump top, and I argued maybe the market in the US will not go down in dollar terms, but it can go down in terms of gold and silver and platinum, and it can go down against foreign currencies.
As of today, in euro terms, the market is down from the high around 15%. And in gold, of course, much more. But as you say, if you print money domestically, the market may not go down. It may stay at this level or even go up. But if you print too much money, what will happen is the dollar weakens against foreign currencies.
But it's not sure because they can also print money. But for sure, it will weaken against precious metals. If I look at the world and I'm an investor, I think it's risky to be 100% in cash, but I own cash and I also own bonds in my asset allocation, but I think there are markets that are relatively cheap.
Emerging markets I regard as inexpensive. I regard Hong Kong shares as being cheap. I live in Thailand. I think the Thai stock market being down this year almost 20% is relatively attractive. I think we're going to bottom out here. And I think Latin American markets are reasonably attractive. So I'm still buying Brazilian stocks, Colombian stocks and Chile.
And then I think some stocks in Europe are quite attractive. You know, people drink less at the present time. That is unquestionably the fact. But I think that some stocks that are related to beverage companies and to tobacco companies are reasonably priced and I think the industry may still consolidate.
So I like beverage companies in France and in England. I use fundamental analysis but if the chart looks very bad I wouldn't buy the stock. Ideally, you have very bad fundamentals is a precondition for the stock to be cheap. If the conditions are good, the stock is not going to be cheap. So, the ideal condition is a bad fundamental condition that is likely to improve and ideally it coincides with a chart that is improving because the chart is the market.
The chart will show you ahead of the media and ahead of the analysts most of whom are sleeping. So I want to have the potential of improving fundamentals, a stock that is depressed and the technical picture after going down a lot and having ideally a base building period of several years and the breakout move.
That is for me the ideal condition. But in general, if you ask me what do you like fundamental analysis of technical, I use both.
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