Moving Beyond the Panic to Pain
Recession as a reality. Six months ago every financial pundit and professional investor, including ourselves, stated economic growth would flatten out and a painful recession would be avoided. That was then and this is now. The research we follow indicates it will be 2-3 times as deep and 2-4 times as long in duration. This is the combined effect of a financial crisis with a traditional recession, i.e. 1970’s style.
The fact that it is a global recession and global financial systemic failure makes it frightening. We don’t think it will sooth investors nerves anytime soon, as volitility is here to stay. The movement of money at the speed of light (fibor optics) causes not only bank runs, but sovereign nation runs on their currency. The last time countries went bankrupt, was 2002, i.e. Argentina and Turkey. Now Iceland, the Ukraine, and hungary are the latest victims of fast foreign money rushing out of their currency, topping off our already large storm of global systematic bank failures (rescues), and a consumer led recession. That is why stocks are trading down at these prices.
Our advice is to not make a major league mistake and buy early. If you no longer add money to your accounts, then wait for the dust to settle. If you are not retired, and have capital to invest, then there is tremendous opportunity in certain pockets of the market for long term investors.
Remember, when the economic turmoil has passed, where will the growth opportunities be found for the sustainable asset manager? We are still facing a depletion of global environmental resources, e.g. clean energy, clean water, clean air.
