Before we look at the future we need to understand our current state and understand how did we get here.
It usually is a fortune tellers swing to try and predict the future. And no I am not a fortune teller. I am not a fortune teller and I don’t want to be one ; not like I know how to if I wanted. I need to take you back to articles I published few years ago.
I have published in 2009 an article titled “Playing the game no one understands, Capitalism on the edge of a technical gamble.”
In 2014 I continued and published dose 2 titled “ When giants tumble, a new reality. Adapt as you go. A none scientific view of what is here, and what is coming.”
In 2018 dose 3 came to life titled: “2018 a period running on the edge of fundamentals, are there worthwhile investments”
To avoid losing your time reading this article, check out the previous 3. When you discover that what we are at is something that has been awaited, and can be understood then proceed with this read. You would note terms currently used publicly for the first time highlighted few years ago. You will note that it is possible to understand what’s coming if you have done the right reading; there is some who do. When you establish that the below article would have a better meaning.
The below article is not meant to guide you. as said in previous doses this idea is meant to challenge your thoughts and trigger your ideas. As we go keep those few terms in mind: stagflation, re-polarization, Values reconceiving, Processes remapping.
In the coming two years we should develop for the coming 50 in our wealth creation journey. We shall not sleep so that time doesn’t slip. Whoever wanted an entry at the 1990s prices will get an opportunity at 1820s valuations.
Let’s note the following:
Quantitative easing through increasing the money supply without controls; increasing the debt without controls; creating an illusion of growth rather than creating real growth; we are not living in a universe were global economies are fundamentally running well.
After keeping those terms in mind let’s answer few questions together.
What happens when you increase money supply too fast?
What happens when global economies suffer fundamentally at the same time?
What happens when corporate, public and sovereign debt rise outrageously in relevance to GDP?
Yes what you are currently mostly thinking of is right.
The value for your cash is going to drop.
Unemployment will rise.
Buying power will drop, and so will living standards.
Values of assets within several asset classes will be redefined.
Oops to this point it looks a very challenging outlook, Which usually resembles opportunity; yet an opportunity that is more challenging to identify this time around.
Its an opportunity dipped in small wars, with big warfare behind it; Dipped in political and economic outrage with painful consequences to many.
It’s an opportunity dipped in hyperinflation, yet stagnation, currencies reevaluation yet asset value declination.
So what should shrewd investors and those who would like to capture this opportunity do.
Can we agree first that there are no more safe havens. Or at least we will not be able to know today which of the safe havens will be safe and which won’t.
Great; now we agreed on this, we can conclude that defensive approaches are not the solution going forward. People who want to make it through with the least damages or highest profits possible need to be on the offence. Long term strategies need a clear long term view, in the absence of such a luxury, even medium term, looks far from clear in such an atmosphere.
As we are not day traders most of short term attempts aren’t right for us. So what’s right for us. Where should be go with our wealth to preserve it and grow it further.
Here is my view. Have my strategies worked over the past two decades, yes. Have every trade work: hell no. Yet a strategy always did.
Yet guys I need to tell you so that I will have no claim of wrong investment advise, the below is not investment advise for you to follow. I am sharing my view, you come up with yours. Investment advise is not provided through an article, it is tailor made to fit a situation, a life dimension, a risk tolerance and a term.
This strategy has two sides, preservation, and growth.
The first is to preserve your wealth and avoid knock outs.
The second is to excel with your wealth.
We will start with you at the age of 30 and grow that till the age of 70. This is assuming that you are of that age bracket today (the beginning of 2021). There are different strategies that may be more effective through different times.
Hey. Here remember a statement I published on 20th of February 2017: “Coming is the century of energy surplus, water drought, excess technology, food scarcity, hyperinflation, financial systems crisis, currency failure, a boom of assets with intrinsic value. Wars will not be between cultures or religions it will be against health catastrophe epidemics and nature disasters. Positive outcome: we will be so busy fighting for survival to fight against each other.”
Yes the above was published in 2017, and yes some of it seems obvious and easy to foresee today however how about foreseeing this in 2017. Yet where you got stuck in the statement as the biggest news (the health epidemic) has happened now. Look forward for the rest that passed in the statement.
At 30. You will have 40% of your wealth in preservation and 60% in growth investments.
With every 10 years passing that is another bracket and you move 10% from the growth to the preservation.
So if you are 40 today your ratio will be 50/50. If you are 50 your ratio will be 60/40. If you are 60 it will be 70/30 and finally if you are above 70 you should go 80/20.
Yes I know!! Most of you after 60 have a 100% investments to wealth preserve, however this time is the time to give life again to your investments as in some instances short term, growth investments may be safer over the coming few years than investments done to preserve capital.
So what is considered growth investments today. and where. Which market, under the impact of which currency, affected by what dynamics. This usually depends on you, where will you live, which currency will you spend in … however today I will tell you search for the spots of light.
Lets define a spot of light:
A market and a sector that has potential to grow.
A market that is progressive in legislation and pro business.
A young market with a diverse economy.
A market with no total reliance on the pole or a contender, ie a market that is impacted by both to a certain extent.
A country that doesn’t have ridiculous weight of welfare, and that has not spent ridiculously on QE which will result in ridiculous taxation.
A market that is small yet attracts interest from multiple channels.
A sector that is currently well funded and can flourish without governments allocating budgets to.
What is considered preservation investments today.
A market and sector that even if impacted and shaken will not loose its main characteristics over time.
An asset class that will hold value against hyper inflation.
An asset that will continue to be a necessity and will not be killed by stagnation.
Let this be a thought starter, lets evolve from here towards a better understanding of what should the steps we follow be.
Yes enough for one article. The rest will come in another.
Before I leave you however let me give you an intriguing theory which should help you think about the above.
You know cars? Right.
You know car manufacturers, car agencies and car mechanics? Right.
Your grand kids may not.
The future of cars with ev.
You purchase the far online – no agency needed.
Similar to tvs now a-days its never feasible to fix it.
You just do a software update on subscription basis.
You send it for recycling, when outdated.
Enjoy the rest of your day.
Copyright © 2021 by Makram Hani
All Rights Reserved.