Gepost door: Victor Goossens | 13 september, 2011

Hereby my August portfolio and outlook

Main items:

Portfolio Aug 2011 & Outlook:

Earnings estimates are still being lowered across the board, also due to the market slump. The 3rd quarter results will be very important to determine if valuations are low or if earnings are (already) dropping. Most investors are hiding in Gold or US Treasuries or debt of relatively save countries, taking the low returns for granted. Capital preservation rules.

People are fed up with equities, with 2 crashes the last 10 years and another one building up, as it looks like. More downgrades on earnings are on the menu, regarding payback time and austerity measures all across the world. The consumer is following the government, reduce the debt positions.

We have been living on borrowed time, future growth has been brought to the present by leverage.

The financial industry is entangled by derivatives and everyone depends on everyone, as we have seen with the extremely dangerous Lehman case.

Accountancies live by the grace of their clients, so the financial industry (with all their highly paid) lobby’s can put any value they like on their assets; I can only hope it is some form of mark to market. The general public mistrusts the financial industry and politicians and can see the eventually will wound up paying the bill again.

Europe is so much divided, there is no solidarity, didn’t the French banks say they would hold on to their Mediterranean loans? When their share prices got hammered, they are trying to flog it (to the ECB) as fast as possible…When time gets tough it is everyone for himself and god for us all…It is wait and see this week with how much the French and Italian banks (and following all other European banks) will be downgraded by the rating agencies.

Volatility is enormous, luckily not as much as in 2008, we have see 5 to 10% moves on just one day in August with big volumes. Europe walks on a tight rope, if they make the right moves the coming months (I would say solidarity and take some write downs on bad debt, so a country can survive and don’t push them further in the mud) and confidence can be restored somewhat, we could see a (short cover) rally.

If not equities where the h… do you put your money? The only reason why people buy (‘good’) government bonds with negative real yields is because people are scared as s… that they won’t get their money back.

Strategy; I am not hedged at the moment because there is this big probability of a short cover rally at these depressed levels. I am to buy good quality companies in stages the coming weeks.

The future still looks bright for precious metals (the REAL money, not the paper money which says in god we trust…not in the dollar ;-). I am waiting for a serious setback, when investors regain some confidence, to add to my exposure.


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