One of my mentors tells me that, in average, a global financial crisis occurs every 8 years. His hypothesis is based on his own observations, but also on his 30 years of experience. Now, if he's right, then another world crisis is coming next year. What do you think about it?
I think that we have been teetering on the verge of that for awhile. I think the problems in Greece were just the tip of the iceberg. It is one of the things that you need to be aware of. Even though economies are cyclical, there are always people who are teetering on the brink of crisis. It is one of the things that you need to be aware of.
We're not too far off at least from a possible recession. As far as something like '08, something similar will happen again sooner or later. I don't dwell on it. I just keep doing what I do. The main differences for me between now and 8-10 years ago are that I tend to be a little more risk-averse, less concentrated, use less leverage, and am never 100%+ long anymore. I look for good companies to own and not-so-good companies to carefully bet against - whether for years, minutes, or whatever time in between each opportunity looks to be a good opportunity to make money. I also tend to hedge more volatile long positions, and to keep at least a little money in cash and in "alternatives" like gold and other commodities. Being either overly pessimistic or overly optimistic and taking on too much risk can hurt you bad either way sooner or later.
Well, I don't think we will have to wait that long! Can't believe what's going on in my home country, Germany. Am disappointed that I cannot yet post links. Not that Germany alone would bring global markets do their knees. But there is a lot of dreaming going on, as if everything was basically okay and would remain okay for the forseable future. No way!
Well, in all fairness, the German economy was and, I think, still is one of the top European performers. If they don't do too well, especially with the so called refugees crisis and the WV scandal, (maybe) something bad is coming.
Thing is, these things are almost impossible to predict. Stocks are trading at very high valuations again and the global economy certainly does have a lot of issues right now so something might be coming. I always keep some cash (and the possibility to get a loan) in hand in case something major happens and I get to make some purchases in great companies for a low price.
Rumors have been going round for a while now that a global recession is coming and it does appear like it won't be long before there'll be a recession. It could be a few months from now, a year or maybe two years. Personally I think the recession is already here.
According to the so called experts we've not been too far off for a while now, so I'd expect one in the next couple of years. How bad it will be though is anybody's guess, and only time will tell if it's going to be a bump in the road or a crater.
I don't think it's very far off at all. It WILL come eventually. It's only a matter of time. We've also had many close calls, but one day it will really happen.
