Adding to confusion, the market is very oversold.
A few things that George Soros said in a recent CNBC interview attracted my attention:
1. AND I WOULD SAY THAT IT'S PROBABLY THE FIRST TIME THAT THE AUTHORITIES ARE ACTUALLY AHEAD OF THE CURVE.
2. FIRST OF ALL, AGAIN, I'VE WITHDRAWN NOW FROM ACTUALLY RUNNING THE FUND. I DID IT LAST YEAR. WE CAME THROUGH IT. NOW I'VE HANDED IT BACK TO THE PEOPLE WHO CAN DO IT. SO I'M OUT OF THE MARKETS, AS I WAS BEFORE I CAME OUT OF RETIREMENT. SO I'M BACK IN RETIREMENT.
3. I THINK THAT ACTUALLY CHINA STANDS TO EMERGE FASTER AND BETTER THAN MOST OTHER COUNTRIES. I THINK, ACTUALLY, BRAZIL THAT HAS BEEN HURT BY THIS FINANCIAL CRISIS AFTER LEHMAN IS ALSO BASICALLY QUITE WELL SITUATED. SO I THINK INDIA, BECAUSE IT IS LESS TIED IN WITH THE REST OF THE WORLD. SO I THINK THAT THE GLOBAL ECONOMY WILL PROBABLY START GROWING NEXT YEAR.
Source: http://www.cnbc.com/id/30033019
His confidence seems to have improved a lot for him to say the authorities are ahead of the curve and going back to retirement again is really something. This certainly challenging me to think hard...damn hard....has the worst really behind us?
Secondly, the famous Dr. Copper is hinting global economy is improving. Copper is supposedly used widely in a lot of economic activities supporting strong price runs up. The stock piles are coming down slowly.
Counter argument: China is accumulating inventory to prepare for massive infrastructure projects launch. Stock piles are still pretty high compared to the last few years averages.
http://www.marketoracle.co.uk/Article9965.html
Thirdly, the worldwide PMI and IPI show some signs of stabilization. Export-oriented country like China, Malaysia, Singapore or Taiwan hit the worst patch in January and started to rebound in February. Based on my recent business trip, the feedback for factory orders in March are stronger than February and April is still looking pretty firm.
Counter-argument: A possible explanation within the industry is restocking after months of severe de-stocking????
The Emerging Market is outperforming the US market - DJIA and S & P 500 by quite a wide margin is bringing back the argument of decoupling. Let say the US economy is really sucks in the worst case scenario, the emerging economies are going to get on with their life -- for example the US stucked in a range from 1962 - 1982 but Japanese and Indian markets were roaring posting a few hundred percentage gains!
Counter argument: The direction of the stock markets is tightly correlated except people are more willing to bid more aggressively on emerging stock markets on rising US market. As soon as the US market retreats, the speed and magnitude of Emerging Market is going to fall quite rapidly.
I still a few more points to argue with myself. Hope to share it later.
1 comment:
Did you know that George Soros would not be a multi-billionaire if it were not for the international language Esperanto?
Born in Hungary in 1930 as Gyorgy Schwartz, the family changed its name in 1936 to Soros, which in Esperanto means "to soar." The Esperanto name-change enabled the Jewish family to protect itself from the rise of fascist rulers and the whole family spoke Esperanto at home.
As a native Esperanto speaker, (someone who has spoken Esperanto from birth), George Soros defected to the West in 1946, while attending an Esperanto youth meeting in Switzerland.
Esperanto enabled Soros both to defect, and to become the 28th most wealthy man in the World, according to the Forbes rich list.
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