Saturday, April 18, 2020

How much of your investments are in Cash?

In about 2008, I was with a client in Doha, Qatar  and he asked me a question that sticks in my mind:
"How much of your investments are in cash?"

Now I know that I am a high risk investor and that nearly all my invested capital was in my businesses that I reasoned I had 100% control but "she who must be obeyed" had all her investments in bank accounts [cash] so I said "about half"

My client was happy with the answer with him saying "that's good I am about the same."

Fast forward to 2020, my buinesses have had their values stripped to zero by The Donald, The Virus and "The Black Dog" and "She how must be objeyed" has all her CASH but is bitterly complaining about the lack of interest she is earning.

The last share I bought were in Bond Corporation because I truly believed he could walk on water, but they [The Bond Corporation shares] sank to zero very quickly and Alan went to jail... The good part of the story it cured my share buying days instantly and permanently. I haven't purchased shares in a company that I had no influence on the management team since.

Earlier this week I asked whether you thought we would "snap back" and there was a 50/50 split and some very deep and meaningful answers. Personally, I think we are going to hell in a hand basket BUT sometime things will get better - different but better!
Now, I say all of this from a position of complete ignorance and uncertainty. Nobody knows what’s going to happen next, or how long this pandemic will last.
But to simply expect that everything will return to normal in a few weeks-- and willfully ignore the countless other possibilities-- seems a bit foolish.
Worldwide, the number of deaths from Covid-19 reached 150,000. That’s more than double the number of deaths from 10 days ago. So it’s still growing.
Singapore was initially successful in controlling the virus outbreak. But they’re now experiencing a nasty second wave of infections.
In the US alone, more than 20 million people have lost their jobs so far, and the government’s $350 billion program to bail out small businesses has already run out of money.
It’s great to hope for the best. But let’s be realistic: there are a lot of reasons why the economic consequences of this pandemic could be long-lasting.
And that’s what brings me to real assets.
If the negative consequences linger, it’s reasonable to expect that governments and central banks will shovel piles of cash into their economies at a feverish pace.
Most developed nations have started this already.
Here in Australia, the government has passed at least $130 billion in stimulus measures so far-- a princely sum in a country where the population is just 25 million people.

What will happen in the future? I think nobody knows.

On my morning walk, I snapped 12 For Lease signs that weren't there a month ago - that is 12 buinesess and maybe 120 jobs that will never come back. The owners just took the opportunity to walk away rather than sign up for a new lease and go into hock for another 5 years. Many clients are saying they would love to take the packages that the Government have on offer and throwign at them BUT not when they are loans which will hve to be paid back so they will "milk" the system until it someone asks for a signature and then they will hand back the keys.

All this sounds doom and gloom but the World Economy recovered from WW1, WW2, the Cold War, the Great depression, The Spanish Flu, 9/11, the GFC etc and I have no reason to believe this won't be the same... there will be many "Motivated sellers of distressed businesses" and not many willing purchsers, so there will be bargins a plenty and I feel that there will be a generational change in wealth and I am planning I will be on the right side of the shift.

Project 2025 was born in better times but it is now more likely to succeed... you should allocate some risk funds [the money you throw at the ponies or buy lotto tickets with] and jump on board... the ride will be fast, bumpty but ultimately rewarding.

Do you want o join me in Project 2025!?

No comments:

Post a Comment