I think it's now time to say that it is right to panic! The old advice that you must not fear, must not panic and must not sell when everyone is selling is simply unworkable and unrealistic. Look, I have too many reasons to panic:
Global Markets have been falling for several months
Can you tell us which major stock market is not in a bear market or almost there?
Inflation everywhere and will continue without end
Inflation is never a problem to the rich or the super-rich. I am not in that category and so I have the right to panic. Prices ranging from rental, fuel, food ...to toilet papers are rising everyday! What is happening to your hard earned money? You are robbed by inflation and no matter how much you earn, you will lose more to inflation.
Cash is useless and worthless
Holding cash or putting it in a bank is aiding your enemy, inflation, to rob you. USD is sinking everyday and so is our dear Hong Kong dollar. We import a lot from Mainland China and Japan and their currencies are going up everyday against USD and HKD. Our cash will soon be a negative asset.
There is no good escape
Some have put money in real property but the property market has now jumped by more than 20-30% in the last 12 months. Obviously, there is a bubble in the real estate market. Can you go on pumping money into real estate then? Ask your banker and he/she may tell you that despite falling interest rates in US, Hong Kong will not follow and you must not expect lower rates for HK borrowers. Ask your estate agent and he/she may tell you that you must buy property at all costs. It does not matter who is right. The truth is when the property bubble bursts in HK again, you must end up as the real victim as we had experienced 10 years ago during the 97 financial crisis.
Some are putting money in gold. Yes, our dear yellow metal has hit usd1000/oz. But what can you do with the yellow metal? I really don't know. With US1,000/oz, how high can gold go? Are you going to put more money in gold? What if our dear USD suddenly takes a turnaround? What if the central banks suddenly sell more gold tomorrow? What if oil unexpectedly falls dragging gold with it?
Some are putting money in commodities. But hold it! Do you the US slowdown will probably hurt global growth reducing demands for commodities? China is slowing as a result of macroeconomic control and the US slowdown. Japan is not too far away. Is India immune? I don't know but can India alone sustain the commodity bull? There is a ceiling to the price of commodities after all. Who is going to accept a double increase in the price of iron ore, copper, etc., every year? No, China won't take that neither would Japan.
Whatever we do, we will end up as losers
I am not pessimistic but unless you are rich or the super-rich, whatever you do under these uncertain and troubled times, you will be a loser. The real winners are always the big banks, the big landlords, the big MNCs. If they are in trouble, the political elite is in trouble and there will be bailouts offered to ensure they are rich and super-rich again and again.
How to win?
I guess this is the multi-million dollar question. My answer: take a leap and invest in these timeless winners like the big banks, the big landlords, the big MNCs. I think Jim Rogers is a great genius to invent the label "Socialism for the rich" and may be I should add another label "Darwinism for the poor".
Global Markets have been falling for several months
Can you tell us which major stock market is not in a bear market or almost there?
Inflation everywhere and will continue without end
Inflation is never a problem to the rich or the super-rich. I am not in that category and so I have the right to panic. Prices ranging from rental, fuel, food ...to toilet papers are rising everyday! What is happening to your hard earned money? You are robbed by inflation and no matter how much you earn, you will lose more to inflation.
Cash is useless and worthless
Holding cash or putting it in a bank is aiding your enemy, inflation, to rob you. USD is sinking everyday and so is our dear Hong Kong dollar. We import a lot from Mainland China and Japan and their currencies are going up everyday against USD and HKD. Our cash will soon be a negative asset.
There is no good escape
Some have put money in real property but the property market has now jumped by more than 20-30% in the last 12 months. Obviously, there is a bubble in the real estate market. Can you go on pumping money into real estate then? Ask your banker and he/she may tell you that despite falling interest rates in US, Hong Kong will not follow and you must not expect lower rates for HK borrowers. Ask your estate agent and he/she may tell you that you must buy property at all costs. It does not matter who is right. The truth is when the property bubble bursts in HK again, you must end up as the real victim as we had experienced 10 years ago during the 97 financial crisis.
Some are putting money in gold. Yes, our dear yellow metal has hit usd1000/oz. But what can you do with the yellow metal? I really don't know. With US1,000/oz, how high can gold go? Are you going to put more money in gold? What if our dear USD suddenly takes a turnaround? What if the central banks suddenly sell more gold tomorrow? What if oil unexpectedly falls dragging gold with it?
Some are putting money in commodities. But hold it! Do you the US slowdown will probably hurt global growth reducing demands for commodities? China is slowing as a result of macroeconomic control and the US slowdown. Japan is not too far away. Is India immune? I don't know but can India alone sustain the commodity bull? There is a ceiling to the price of commodities after all. Who is going to accept a double increase in the price of iron ore, copper, etc., every year? No, China won't take that neither would Japan.
Whatever we do, we will end up as losers
I am not pessimistic but unless you are rich or the super-rich, whatever you do under these uncertain and troubled times, you will be a loser. The real winners are always the big banks, the big landlords, the big MNCs. If they are in trouble, the political elite is in trouble and there will be bailouts offered to ensure they are rich and super-rich again and again.
How to win?
I guess this is the multi-million dollar question. My answer: take a leap and invest in these timeless winners like the big banks, the big landlords, the big MNCs. I think Jim Rogers is a great genius to invent the label "Socialism for the rich" and may be I should add another label "Darwinism for the poor".
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