The 40 minute presentation I gave at the Toronto Moneyshow on October 21 is now available on line. You can log in to watch and download the slides here by using the username danielle@venablepark.com and the password: moneyshow.
This morning Lakshman Achuthan, Economic Cycle Research Institute, says at the end of October his leading indicator index is showing definitive evidence of a slow recovery but “no double dip recession any time soon.” Hopefully he is right. He notes that the leading indicator index followed a similar formation in 2003 when the economy weakened but did not go back into recession. It is noteworthy however that while the 2001 recession officially ended in 2001 according to NBER, the stock market went on to make a series of lower lows thereafter falling a further 36% before finding a final bottom in October 2002 followed by a nasty retest in February 2003. So even without a double dip in the economy ahead, we have reason for serious concern about the elevated level of current stock valuations at this point in our government funded “recovery”.
Here is something people without wealth frequently miss: unlike the masses who are clamouring just to get a few dollars, those who have amassed a large chunk of their life savings already, have something to lose! There are just 10 million 'high net worth” people in the world today that have more than 1 million dollars of investable assets (outside their home). Most of those 10 million people acquired their wealth from running business and they know that governments and individuals cannot spend their way to prosperity. Not surprisingly they are a feeling rather defensive and concerned about the world economy and government policies today. Here is the money quote in this clip:
“In the past [high net worth people] were fed a lot of products that had risk in them, and it turned out that a lot of the wealth advisors were selling not serving, they didn't understand the risks. Now members don't want to look at risk as volatility, they want to look at risk as what's ahead of us double dip, potential of terrorism, overhanging debt, political gridlock…so they want to be conservative, and they are holding more cash and more gold than they've held…”
