- High inflation that doesn't prove to be transitory.
Contagion from China's attempts to slow their property market. Not just direct contagion from the collapse of Evergrande etc but the knock on effect on China's GDP. Property sector is around 30% of GDP there versus 6% in the US.
Energy crisis - China, India, Europe
https://moneyweek.com/economy/603962/ja ... -very-real
To summarise, he says that if treasuries go to 4% - which is very possible if inflation doesn't subside (and they were at 3% a few years ago) - any stocks on a PE of 25+ get hammered.
His broad strategy would be Silver (or Fresnillo) and shares on PEs closer to 12 or 13.
So pretty much what a lot of people are talking about, a shift from growth to value. He points out that is normal strategy would be to do nothing and just wait things out but this time he sees it as a very fundamental change.
Made me nervous, I must say.
I also think that if the US equity markets correct by say 20% or 30%, shares that are on PEs of 12 now won't be immune.
Yeah, I know trying to time the market is considered daft but I cashed out a chunk of my portfolio in Feb 2020 and bought back in after 23 March with some excellent results.
Seriously thinking of liberating some cash now.
Anyone doing similar?