Monday, October 31, 2016

Even bears need to invest

It's very hard to short a bubble, because you never know when a bubble will burst. The Nikkei was in a bubble at 25,000 points – then it went to 39,000.

Let's say central banks will continue to print money and keep rates at zero or below, then what is the worst investment? It's cash. If you are really bearish about the world, then you don't want to be in cash, you need to invest.


Oil
There is a real danger that oil could go up substantially, maybe not immediately, but in the long run,

Bonds
Everybody says they hate bonds. The 10-year Treasury yields 1.74 per cent, which is very low, but compared to Japanese and Swiss bonds it's relatively attractive. US government bonds still have upside potential, especially if the US Fed continues to implement lower and lower interest rates.



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