Ruffer article

[billG]

https://www.trustnet.com/news/7464759/e ... s-macinnes

Some more doom messages from Ruffer - That said some good points and he may well be correct.

I have to in general say we seem to have a different view points:-
a. The Governments have borrowed a huge amounts of money and that will work its way into the stock market (like the recovery from the last recession)
b. This is the worst recession in decades and the stock market is on crazy valuations.
c. Inflations is on its way.....

It seems to me we need to have a plan for each of these scenarios and split our portfolios accordingly going all-in in any one strategy seems foolish.

BillG

[Steveam]

Thank you, a very interesting article.

I saw a statement from one of the brokers recently that there has been a "recovery" in the trade volumes by private investors - I see this as a contrarian signal. I adopted a policy of hoarding cash early in this crisis and intend to continue this policy until there is much greater clarity or until the cash buffer moves from its present 3 times annual expenditure to 4 or 5 times.

Although I'd love to buy a bargain my bigger concern is being caught in a squeeze and having to raise cash. (I have to meet a substantial but managable tax bill in July. I have an investor friend - much wealthier than I am - who has a large tax bill due for payment at the end of July and will, I guess, be selling equities to pay it. Of course I know we should both have put the tax aside ...)

The article talks about the longer term prospects for equity return being lower going forward - this makes sense to me. Also mentioned is the prospect of inflation rising - I think this is a tiemscale issue: in the short term I fear deflation rather than inflation. Unfortunately the likely response to deflationary pressures (money printing/increased government debt & expenditure) is likely to overshoot and lead to inflation.

I'm not planning to make any changes to the portfolios (HYish and ETF/IT) as my convictions are not strong enough but I suspect that selling some equities now might be a wise move if I anticipated a cash shortage in the next few years. (I'm expecting equities to go lower).

Best wishes,

Steve

[richfool]

Thank you, a very interesting article.

The article talks about the longer term prospects for equity return being lower going forward - this makes sense to me. Also mentioned is the prospect of inflation rising - I think this is a tiemscale issue: in the short term I fear deflation rather than inflation. Unfortunately the likely response to deflationary pressures (money printing/increased government debt & expenditure) is likely to overshoot and lead to inflation.

I'm not planning to make any changes to the portfolios (HYish and ETF/IT) as my convictions are not strong enough but I suspect that selling some equities now might be a wise move if I anticipated a cash shortage in the next few years. (I'm expecting equities to go lower).

Best wishes,

Steve

Yes, thanks for the link to the article and yes, I would concur with Steveam's comments above, in that I too see deflationary pressures for some time yet, before inflation rears its head a couple of years down the road.

Having recently upped my exposure to growth stocks (IT's), maybe I should start directing some of my dividends into Ruffer or Personal Assets and their TIPS from the end of this year.

[Dod101]

The Government will need inflation to deal with the enormous borrowings although at least for now it is not costing much in servicing costs.

Dod