Before we dive in to my views on where to place your bets for the next couple of years, it is important to understand the context for my views. I see the world economies as extremely unbalanced and while we have seen stability in the stock markets for nearly two years, at any moment volatility can explode. The big problem is that economic cycles of boom and bust are inevitable. However in recent decades politicians and bureaucrats have been trying to eliminate the bust cycle. Each time we enter a recession, before we have completed the full course of bitter medicine to cleanse our system of the excesses, governments rescue us with free money and other stimulus. We enjoy a short term high, but push the problem of rehab to our future generations.
With this context here are my quick takes on what lies ahead for a mix of sectors, currencies, geographies, and industries:
I’d love to hear your thoughts and any agreements or disagreements with this list. In the following posts I will drill down into more detail on many of these topics individually. Let me know your particular interests.