Post by account_disabled on Feb 20, 2024 8:21:33 GMT
On that liquidity must be higher than the interest rates on the debt, you must achieve 6 for your investments and pay 4 for your debt. The problem today is that since 2008 the debt has changed hands from the private sector to the public sector. Here in spain we have gone from 1,800 billion euros in private debt to 1,180 today, while public debt has risen from 400 to 1,570 billion. So the question we must ask ourselves is: has spain invested it in something that can generate greater well-being - health, for example - or greater productivity - education, r&d, new sectors -? And the answer seems to be no. In the stock market you have to be invested by concept, not by momentum. The stock market rewards perseverance (never selling) and perseverance (inve Country Email List sting repeatedly) altogether, public plus private debt, we have gone from 2,200 billion euros in debt (200% gdp) to more than 2,700 (225%) and it has not been used to achieve greater returns (social and economic). We will now see with the rise in interest rates how many businesses will go from profitable to little or not profitable at all. And this is exactly what I try to avoid, businesses that were profitable thanks to cheap debt. -I have read that many economies are going to face significant imbalances due to excess debt. Do you share it? Completely. Debt is a burden that prevents the economy from rising as it should. But we start at the beginning. Debt is exchanging future consumption for present consumption. This generates strong growth fallacy.
If that debt is not invested in productivity, what it causes is that you will inevitably consume less in the future because you must repay the debt. And when interest rates rise you have to allocate more money to your debt payment than you did before, implying that you go to fewer restaurants, buy less clothes... And when we look at developed economies we are left with the fact that public debt is 100% of gdp, but… what about private debt? Doesn't it have to be returned? Well, if we take it into account we see that the total debt is equivalent to 2 or 3 times the gdp. This burden is what will make other countries, with lower debt, pass us by, such as norway or denmark, not to mention some emerging countries. -looking at the market, will the stock market be more vulnerable this year than in 2023? I honestly don't know. What happens in a year depends a lot on the psychology of the investor and not so much on the long-term future of the business. In the last 100 years, money has been lost only 6% of the time in 10-year periods. Having said that, let's go see what happened in 2023. In 2023, the msci world was up 21%, but profits were up 3%, the american s&p500 was up 24%, but profits were up 1%, and the european stoxx 600 was up 12%, where profits were 7%. . That is to say, now we find that the kilo of profit is paid more expensively, the multiple has risen.
And these are located at the top, not excessively, but at the top. So it is difficult to see a repetition of such magnitude for 2024. Interesting years are coming, with strong dispersion between large and small companies, with the end of the decade of zero rates, with geopolitical wars for the world throne, in short, years are coming in which the competition for alpha will be fiercer than ever. -what has to happen for 2024 to be a positive year for the stock market? May we realize that 2024 will be the last chapter of the book called covid. It's an example of the bullwhip effect, where a small change in demand, like what happened in 2020, causes big changes in suppliers' suppliers. The world demanded 100, produced 100 and transported 100 in 2019. My birthday is in september, so I treated myself to an investment in the investment fund... What about next year? Well another in covid, demand dropped to 80 and then production. Hence the drop in prices and the lower cost of transportation. In 2021, it began to demand 120, but the factories could only produce 100 and transport 100. Resulting in an increase in transportation, an increase in prices and an unwanted effect: an increase in demand to ensure the product (double orders...) that were delivered in 2023. At that time, inventory increase. If in 2024, we see that inventory decreases, although gdp does not increase (we remember that, mainly, gdp is new products), we can see that demand, and therefore, the economy, was not so bad.