Warren Buffett, in his annual meeting, basically prepared Americans for a SHIT-SHOW. He started his meeting by repeating the mantra that one SHOULD NEVER bet against America.
I believe that as strongly as Warren does, but like him, my message is that America doesn’t rise in a straight line at all.
Buffett’s MAIN FOCAL POINT was that we are entering an economic WINTER.
His presentation included slides that showed how wise and enriching betting on America is over time. No one’s denying that, but he stressed how CHALLENGING some periods can be on the journey.
He specifically made references to the Civil War and to the Great Depression. This is a warning, NO LESS, from the world’s top investor.
His mindset is that cash is MORE IMPORTANT than growth, at the moment.
His long-term MESSAGE is that bonds SUCK!
Buffett believes that government bonds are, for lack of a better word, the worst investment out there, so he’s BULLISH on stocks, in comparison.
Courtesy: Zerohedge.com
I get his point. Buffett understands PROBABILITIES and knows that today there are MANY PLAUSIBLE routes the global economy can take from here, some of them truly UNPLEASANT.
One such outcome is a renewed RIVALRY between China and Washington at the center of the world stage.
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I talked about that on Sunday, and I REITERATE my warning that China is a wounded animal and that Trump is a hunter.
This may be his OPTIMAL CHANCE at attacking and establishing SUPREMACY.
I’m not suggesting physical conflict, but I am definitely not ruling out other forms of war (currency, technology, intelligence, diplomatic).
The global sentiment towards China is not cheerful. It is not people’s first choice for a country that SHARES INFORMATION and that can be trusted.
As you can see above, all nations are working together to CORRECT the oil glut, for instance, while China is accused of COVERING UP the disease for a full month, thereby causing TRILLIONS in losses for other countries.
These are SERIOUS ALLEGATIONS!
Up until a week ago, markets certainly weren’t thinking that China and the U.S. would put each other in a KILL ZONE, but the hatred is intensifying even in Europe towards Asia’s superpower.
We don’t make INVESTMENT DECISIONS based on geopolitical events. What we do with geopolitical data is form DIVERSIFICATION ideas. Right now, owning stocks over cash and gold is TRICKY.
The upside potential is CAPPED.
Therefore, I personally have 54% of my net worth outside of the stock market. For comparison, I had about 78% of it in stocks between 2011 and 2016.
I am NOT BULLISH on a fast recovery.
What I can tell you is that in every industry, YOURS INCLUDED, some players (even reputable ones) won’t SURVIVE this crisis. Others will survive, but won’t thrive.
A select few will GET STRONGER.
You have to figure out how to position yourself within that group. Here are a number of ways:
- Acquire talent: There are scores of skilled people, who are now UP FOR GRABS.
You can hire them or help your company find them and bring value.
- Acquire Your Competition: In my own ventures, I am ENGAGED in this activity, as we speak!
There is desperation out there.
- Zoom in and Stay Lean: Find your core income-generating skills and DROP THE REST – no nonsense and fewer bullshit pursuits. Be nimble.
- Speak With Customers FREQUENTLY: This is the time to show your clients that you’re HERE FOR THEM. Find out what they want right now and deliver it better than ever!
Don’t fall by the WAYSIDE!
Best Regards,
Tom Beck
Research Partner, PortfolioWealthGlobal.com
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