Thursday, April 21, 2011

Where to invest right now

If the world's central banks (or some of them) are indeed going to start withdrawing liquidity from the market, THEN:

- stocks in those countries are going to stabilise (not grow fast); I would short the top companies but be neutral on those at the next level - at least for the moment

- expect commodities to continue their stellar growth till the next crash

- invest in those things that are "down" at present. What are those? At present, primarily the dollar. So invest in the dollar. Invest in any commodity that is underpriced at present (is there any?). Invest in any large/ top stock which is underpriced, provided it is not likely to go bankrupt (is there any?). Avoid medium-sized businesses, unless you know them personally and consider that their strategy will get them to number one, two or three in their industry - and, if they are already in that position, are in a growing market. Invest in those small businesses that you know personally, that have a competitive edge, and that are trying to build long-term.

How long will this next "cooling" phase in the economy last? Ddifficult to say. It will depend on the skill of central bankers in withdrawing liquidity from the market at an appropriate speed. They want to cool the market, not freeze it. Let's pray they are successful. Sphere: Related Content

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