Underneath you’ll find the short, medium and long term forecasts as published from 2003 up to the end of 2012 on www.hollandinvest.eu. Due to the conversion from HTML to pdf some lay-out functions have automatically disappeared and/or been altered. This has also disabled all the originally embedded text links. If you have any questions or comments about the content of these forecasts, don’t hesitate to submit them to us through our publisher. Stock tips will not be given. Forecasts - what you need to know The forecasts on these pages, are: - shortened versions from the forecasts Holland Invests works with for its own investments; - not meant to be anything more but practical handles to come to grips with a by definition always uncertain and elusive future; - a personal view and expectation, therefore subject to change over time. Therefore it can and will happen that Holland Invest chooses to invest in a way that, at first glance, seems to be contradictory to the relevant published forecasts on this website. However, such a situation will only occur if and when Holland Invest feels certain that, based on a very careful prognosis of the future, such an investment will give an investment return over the long term that is consistent with its extra risk. The relationship between the real economy and the stock market Time and time again it can be observed that both national and international developments in the real economy that seem to defy both rhyme and reason, somehow manage to continue their illogical course for far longer and far further than seems rationally plausible beforehand. Due to rationalizing the irrational, the same can be said about the reflection of these developments in the stock market and other market prices. Then, when the trends in the real economy finally reverse their course, the discounting of this risk in the stock market and other market prices can be seen to be swift, decisive and exaggerated. That’s why, in retrospect, most big market gains and losses can often be traced back to only a few days and/or weeks per chosen time period. User terms The information on this website consists of Holland Invest’s personal points of view. Therefore, nothing on this site is meant, nor should be taken, as personal investment advice. Usage of this website is subject to the applicable user terms. SHORT TERM FORECASTS
The reliability of the short term forecast Developments in both the national and international real economy that often seem to defy rhyme and reason, often manage to continue their illogical course for far longer and far further than seems rationally plausible beforehand. Due to rationalizing the irrational, the same can be said about the reflection of these developments in the stock market and other market prices. Then, when the trends in the real economy finally reverse their course, the discounting of this risk in the stock market and other market prices can be seen to be swift, decisive and exaggerated. That’s why, in
retrospect, most big market gains and losses can often be traced back to only a few days and/or weeks per chosen time period. That’s also why the short term forecasts are the least reliable forecasts to work with within the framework of long term investing. And why investing can only qualify as long term investing when it’s done within an investment horizon of 10 years or more. Explanation on the length of the short term period Five years as the length of the short term period is a highly arbitrary choice. Nevertheless, this length of time is both in practice as in theory defensible by a number of noticeable cycles in the real economy. Frequency of forecasts Holland Invest’s choice to update its short term forecast every other year is based on nothing more then convenience and common sense. As such, it’s indefensible on merit. User terms The information on this website consists of Holland Invest’s personal points of view and is for general informational purposes only. The information on this website is therefore not intended as investment or other advice that is applicable to your specific situation. Users must not rely on public information like the information provided on this website without first seeking advice from their personal and professional investment advisor that has knowledge of their specific personal financial situation, financial goals and risk tolerance. The use of this website and its information is subject to the applicable user terms.
2003 - 2008 Real economy Holland Invest has been surprised by the relatively small effect the bursting of the dot.com bubble has had on the real economy. At this moment it’s hard what to think of this. Holland Invest suspects that the course of future developments in the real economy will be strongly tied to whether or not, and if so: how quick, the current ample liquidity in the developed economies will be scaled back. Financial economy Financially Holland Invest expects a strong rebound in the stock and other markets, provided the ample liquidity will not be scaled back too abruptly. Conclusion Given the uncertainty about the future developments in monetary policy in the developed economies, Holland Invest thinks that extra vigilance is warranted when investing but that the chances of outsized market returns outweigh the underlying risks. Additional information
As additional information Holland Invest recommends the following book: Prof. R. Brenner, The Boom and the Bubble - the US in the World Economy, Verso, London, 2003.
2005 - 2010 Real economy Over the past two years Holland Invest’s concerns about the health of the real economy have increased. The ample liquidity provided by central banks has not been matched with the necessary changes in competitivity and flexibility. If Holland Invest is correct in this respect, then it’s very well possible that the recovery is nothing more then an absence of symptoms due to large amounts of cheap liquidity. Needless to say that treating the symptoms does not treat the underlying disease. The problem from an investing point of view is, however, that treating the symptoms can keep the patient alive and kicking for a very long time. Financial economy With regard to the financial economy Holland Invest expects further upward moving markets. Nonetheless, due to the increasing underlying risks Holland Invest sees no chances that are worth taking. Conclusion Given the increased underlying risks of a sharp market retreat combined with the possibility of a significant recession in the intermediate to long term period ahead, Holland Invest is of the opinion that the investment situation in the developed markets gets ever less suitable for new or even maintaining past investments. Therefore, Holland Invest will start pulling money out of the markets and buy downward protection for its remaining investments. Additional information As additional information, Holland Invest recommends the following two books: (1) B.B. Mandelbrot and R.L. Hudson, The (mis)behaviour of markets - a fractal view of risk, ruin, and reward, Profile Books, London, 2004; and the superb description of inflating and collapsing financial bubbles: (2) Ch.P. Kindleberger, Manias, Panics, and Crashes - a history of financial crises, John Wiley & Sons, New York, 2000.
2007 - 2012 Real economy The earlier expressed concerns (see the short term forecast 2005 - 2010) have multiplied over the last couple of years. However, as said in the introduction to these forecasts, time and time again it can be observed that both national and international developments in the real economy that seem to defy both rhyme and reason, somehow manage to continue their illogical course for far longer and far further than seems rationally plausible beforehand. This does not mean one should abandon a cautionary stance mid-way. Indeed, it means the contrary. Financial economy
Financially speaking, Holland Invests expects the long overdue market correction to occur somewhere in this time period. However, given past experiences it might very well take longer than expected. Conclusion Because Holland Invest sees only risks at the short, intermediate and long term periods that are far too big and complex to justify the most likely small rewards in comparison from taking them, Holland Invest has decided to further reduce its market exposure and take almost all chips off the table. Additional information For additional information, Holland Invest recommends the following three books (of which the last two might be a bit too technical for the unprepared reader): (1) L. Tvede, Business Cycles - history, theory and investment reality, John Wiley & Sons, Chichester - West Sussex - England, 2006; (2) H.P. Gray, The Exhaustion of the Dollar - it’s implications for global prosperity, Palgrave MacMillan, New York, 2006; and, (3) D. Sornette, Why Stock Markets Crash - critical events in complex financial systems, Princeton University Press, Princeton, 2004.
2009 - 2014 Real economy Due to the rather contrarion nature of it and because all options were still on the table, Holland Invest did only say this out loud once earlier (and then only in very vague terms) in its long term forecast for the period 2003 - 2022. However, the worst case scenario seems now to be indeed upon us with a rerun of the Great Depression as the most likely scenario. Therefore, Holland Invest counts on a very negative period for both the real and the financial economy during the years 2009 - 2012. Holland-Invest does not expect to see new and solid ground for a sustainable long term recovery before 2012 (at the earliest). Furthermore, Holland Invest expects deflationary pressures to continue in both Europe and the USA. In time, deflationary pressures in the USA could very well turn rapidly into high and chronic inflation. If and when this happens, the most likely moment for it to occur will be the moment that the current uncertainty about the economic and financial prospects will have reached its low point (as things stand, that seems to be most probably in the years after 2011). Financial economy Holland Invest expects high volatility, with a regular - sometimes relatively long lasting - bear rally, in the various markets till mid-2012. Therefore, the best investment results till mid-2012 can be found in real hedgefunds en deposits with due dates up to one year. Due to an unattractive risk/reward ratio Holland Invest will avoid the stock market during this time as much as possible, unless the AEX comes down to 150/170 and/or the S&P500 to 500/600. Otherwise, Holland Invest will continue to keep its ample liquidity sidelined. Conclusion
In the coming years the preservation of assets will be much more important than a timely re-entry into the stock and other markets. Additional information For additional information, go to the intermediate term forecast 2008 - 2017 and its following pages where Holland Invest started a regular overview of the most clearly written articles that do not lose sight of the long term market risks and possibilities. (N.B. Holland Invest’s comments are in Dutch, but most embedded links lead to articles, columns, etc, in English). 2011 - 2016 Real economy With heaps and heaps of cheap liquidity central banks have been able to stave off a rerun of the Great Depression. The politicians, however, have dropped the ball in mid-play and, by doing so, waisted an unique moment for a fundamental overhaul of the financial system’s checks and bounds. That’s why with the stabilizing of the real economy, and at the moment of writing this: even growing real economy, the old precrisis imbalances start increasing again. Financial economy In the real economy a rerun of the Great Depression has been prevented in part by giving the financial economy an artificial boost of adrenaline by means of ample amounts of cheap liquidity. As long as this artificial adrenaline in the form of ultra low interest rates and transferring private debts without significant writedowns on to the public continues, stock and other markets will keep rising. This means that the stock market, as the foremost example, will show an ever increasing overvaluation. However, the home price declines have most probably only stalled temporarily. Conclusion The real economy shows a return to the pre-crisis imbalances on top of new imbalances that have come into existence due to the crisis itself (e.g. ballooning government debts and increasing pension deficits). As long as these imbalances do not turn into a new financial landslide, stock and other markets will keep rising. However, past experiences should give cause for pause. It’s very rare (if ever) for these types of imbalances to rebalance in an orderly and gradually fashion. That means that chances are growing of a revival of the current crisis, maybe in a different form but most certainly of a more devastating impact, somewhere in the next short term or interemediate term period. Therefore, Holland Invest will keep ample liquidity on the sideline. Additional information For additional information see US CAPE and q chart from Smithers & Co and go to Holland Invest’s blog page with special emphasis on the blog posts of October 6th, 2010 and October 11th, 2010. (Holland Invest’s blog gives a regular overview of the most clearly written information that does not lose sight of the long term market risks and possibilities - NB the blog’s comments are in Dutch, but most embedded links lead to articles in English). MEDIUM TERM FORECASTS
The reliability of the intermediate term forecast The often surprisingly long time it takes for quite obvious developments in the real economy to manifest themselves on one hand, and the unexpected twists and turns that necessarily occur in everybody’s life from time to time on the other hand, make the intermediate term forecast respectively the most reliable and practical guide for the long term investor. Explanation on the length of the intermediate term period Ten years as the length of the intermediate term period is for the most part based on a practical decision given the lengths for the short term and long term periods. Frequency of forecasts Holland Invest’s choice to update its intermediate term forecast every five years is mostly based on a number of noticeable cycles in the real economy. User terms The information on this website consists of Holland Invest’s personal points of view and is for general informational purposes only. The information on this website is therefore not intended as investment or other advice that is applicable to your specific situation. Users must not rely on public information like the information provided on this website without first seeking advice from their personal and professional investment advisor that has knowledge of their specific personal financial situation, financial goals and risk tolerance. The use of this website and its information is subject to the applicable user terms.
2003 - 2012 Real economy The relatively light effect that the bursting of the dot.com bubble has had on the real economy has so far surprised Holland Invest. It’s not yet clear what to make of this. Holland Invest thinks, however, that the direction of the future developments in the real economy will be intricately linked to whether or not (and if so: how quickly) the ample liquidity in the developed economies will be scaled back. Holland Invest hopes to have more clarity when the next intermediate term forecast is due in 2008. Concerning the exchange rate between the dollar and the euro, however, Holland Invest expects a strong devaluation of the dollar over the intermediate / long term, regardless the movements in the interest rate differential. The same can be said about the exchange rate between the yen and the euro. Financial economy Financially Holland Invest expects a strong rebound in the markets, unless the ample liquidity gets scaled back rapidly. Conclusion
Given the uncertainty about the future of central banks monetary policies on one hand, and the prospect for the euro/dollar exchange rate on the other hand, Holland Invest thinks that extra prudence is called for when investing during this time period. That being said, with increased risk might come chances for increased rewards. In that respect, Holland Invest favours European and emerging markets. Additional information For additional information Holland Invest recommends the following book: Prof. R. Brenner, The Boom and the Bubble - the US in the World Economy, Verso, London, 2003.
2008 - 2017 (2008) During 2008 Holland Invest postponed making the forecast for this time period. This postponement was done in order to obtain a better insight into the general direction the recent developments would most likely take in the coming years. 2009 - 2017: Real economy Based on i.a. so called multiplier-effects in the real economy and with an eye on the real threat that exists within the existing WTO-treaties for tariff hikes to be legally imposed by countries on imports and exports that are in percentage terms comparable to the rate hikes in 1930, Holland Invest sees a replay of the Great Depression as the most likely outcome of the current economic and financial turmoil. The only effective and credible policy measure that could change this dire scenario would be, according to Holland Invest, a simultaneous declaration of a banking holiday across the G10 group of countries that cooperate on a monetary level. This banking holiday should be used to investigate and write off up to 70% of the value on subprime and Alt-A mortgage products (instead of the currently estimated write off of a maximum of 30%). Furthermore, the principal outstanding balance on most mortgages originated since 2005 should be substantially lowered. Additional information See for additional information also Holland Invest’s short term forecast for the period 2009 - 2014. Other useful information sources, are: (1) Do BRICs (and Germans) Eat PIGS? (Absolute Return Letter - February 2009, written by N.C. Jensen); (2) Don’t know much about history: the sequel (Merrill Lynch - Economic Commentary 2 januari 2009, written by D.A. Rosenberg); (3) Understanding the Subprime Mortgage Crisis, written by Y. Demyanyk en O. van Hemert; and (added as of April 7th, 2009): (4) A Tale of Two Depressions, by B. Eichengreen & K.H. O’Rourke (voxeu.org) Go on to the next page for a regular updated view on the current crisis. 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page
(N.B. comments are in Dutch, but most embedded links lead to articles, columns, etc, in English - The most recent updates can be found here: www.hollandinvest.blogspot.com) (februari 2009) Over de morele instelling waarmee o.a. bankiers, analisten en accountants tot in ieder geval medio 2007 handelden: (1) Monkey Business: Swinging Through the Wall Street Jungle, van J. Rolfe en P. Troob. Een zeer vermakelijk en tegelijkertijd afschrikwekkend verslag van twee exbankiers; (2) The Smartest Guys In The Room, van B. McLean en P. Elkind. Over de opbouw en het latere faillissement van Enron. Op sommige momenten taai om door te komen, maar het lezen meer dan waard; (3) De documentaire van PBS ‘Inside The Meltdown': klik hier voor de link. (mei 2009) Een korte documentaire over de kwaliteit van de aan veel Asset Backed Securities ten grondslag liggende hypotheken uit de VS: klik hier voor de link (zie in het bijzonder de vraag en het daarop volgende antwoord rond 5’12’’ - 5’30’’). Het informatievolle (soms wat langdradige) boek over o.a. de achtergronden van de bullmarkt van 1982 - 1999, waarom deze in alle opzichten uitzonderlijk was en over de gevaren van een ‘bear rally’ (zoals degene waar we op dit moment volgens Holland Invest inzitten): BULL!: A History of the Boom, van M. Mahar. Het beste overzicht tot nu toe van het onderliggende probleem bij de huidige crisis en waarom de periode tot en met 2012 zo cruciaal is. Zie in dit verband ook het artikel ‘exploding debt threatens America’. (juni 2009) Hoewel niemand weet of er inderdaad sprake is van een bear rally en zo ja: hoe lang deze duurt, volgen hieronder twee sterke argumenten om aan te nemen dat de huidige rally inderdaad een bear rally zal blijken te zijn: (1) Het vervolg d.d. 4 juni 09 op het artikel ‘A tale of two depressions’ (voxeu.org); (2) Het artikel van A.S. Posen over de nog te verwachten afschrijvingen in de EU. previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page (juli 2009) Tot nu toe heeft minder dan 2% van de hypotheken in de VS een vermindering van de hoofdsom gekregen. Zie voor meer informatie: ‘Modifications and Re-Default’ van Calculated Risk. Het heeft er dus alle schijn van dat men ook deze crisis (net als de dot.com bubble) probeert op te lossen door veel en goedkoop geld de markt in te pompen, zonder daarnaast tevens het daadwerkelijk onderliggende probleem aan te durven en / of willen pakken. Het zal ongetwijfeld tijdelijk kunnen werken, maar zonder een fundamentele verandering is het slechts het vooruitschuiven (en vergroten) van het werkelijke probleem. De huidige beursrally is dus hoogst waarschijnlijk een bear rally. Of dit klopt en zo ja hoe lang deze rally dan aan zal houden en hoe hoog de beurzen dan kunnen gaan, zal de tijd uitwijzen. Holland Invest ziet in de huidige rally in ieder geval nog geen reden het eigen liquiditeitsnieveau (70%) aan te passen.
Zie tevens: (1) het jaarverslag over 2008/2009 van de Bank for International Settlements; (2) het FT-artikel ‘Time to tackle the real evil: too much debt’; (3) ‘Option ARMs performing worse than subprime’ en ‘Option ARMs Good News, Bad News’; (4) het artikel van Roubini ‘The Joblessness Threat’; (5) het FT-artikel ‘America is for now still blowing bubbles’. (6) in vervolg op een eerdere stelling op deze website het FD-artikel: ‘Wereldhandelsorganisatie ziet protectionistische druk oplopen’; (7) The Economist ‘Rebalancing Global Growth: a long way to go’; (8) Over de lange termijn visie van pensioenfonds PGGM de tweede helft van het artikel ‘Aandelen minder profijtelijk’ uit het Financieel Dagblad; (9) En ter compensatie voor al dit doemdenken: ‘Home Crisis Investigation’. (augustus 2009) Hoewel niet 100% nauwkeurig is deze link toch erg illustratief: (a) het toont het belang aan van dividenden (en het herinvesteren daarvan) voor het totaalrendement van de lange termijn belegger; (b) het geeft een goed beeld van de werkelijke lange termijn koers / winst verhouding (P/E); (c) het toont de relatieve omvang aan van de bubble uit de jaren negentig in vergelijking met die uit de jaren twintig. (N.B. De grafiek verloopt vlakker dan normaal doordat er anders dan gebruikelijk (i) geen rekening wordt gehouden met de uitgekeerde en herbelegde dividenden en (ii) doordat de koerswinst is uitgezet op een logaritmische schaal). previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page (vervolg augustus 2009) Dit artikel beschrijft vrijwel één op één de huidige visie van Holland Invest: ‘Is a Jobless Recovery Your Best Friend?’. Zie tevens: (1) Roubini’s ‘A Phantom Economic Recovery’ over de nog steeds resterende risico’s op de korte en lange termijn; (2) in vervolg op een eerdere stelling op deze site het artikel ‘Deflatie in eurozone’ uit het Financieel Dagblad; (3) in vervolg op een eerdere stelling op deze site het artikel ‘Ouch. Colonial Left a Mark! (on loans)’; (4) In vervolg op een eerdere stelling op deze site het artikel ‘Central Bankers Blow Bubbles in Bid to Balance Rates and Recovery’; (5) Over de achtergronden bij een eerdere stelling op deze site en de risico’s op de langere termijn: het artikel van Warren Buffett ‘The Greenback Effect’ en het artikel ‘Deficit Expected to Reach 9 Trillion in 10 Years’; (6) Het artikel ‘A Comment on House Prices’. (september / oktober 2009) Op de middellange termijn ziet Holland Invest drie mogelijke scenario’s voor de financiële markten (uitgaande van de algemeen heersende opvatting dat het onderliggende economische herstel zich traag en moeizaam zal voltrekken): (1) de beurzen negeren de onderliggende economische problemen en zetten hun voortgang voort, alsdan zijn de komende jaren de risico’s op een herhaling van de meest recente crisis (met zwaardere consequenties) aanzienlijk;
(2) de beurzen komen terug op het huidige optimisme en blijven daarna lange tijd zijwaarts bewegen totdat de onderliggende economie zich weer voldoende heeft hersteld voor nieuw (en alsdan: gerechtvaardigd) optimisme; (3) de beurzen komen terug op het huidige optimisme en crashen opnieuw, maar dan naar een dusdanig laag niveau dat instappen voor de lange termijn, ongeacht een vooralsnog uitblijvend economisch herstel, gerechtvaardigd zal zijn. Vanuit een beleggingsstanpunt hoopt Holland Invest op het derde scenario; vanuit het algemeen belang zou het tweede scenario het meest wenselijk zijn. Op dit moment lijkt echter het eerste scenario zich te ontvouwen. Zie tevens: ‘It may be a bubble - but it’s completely rational’ van Crispin Odey. (november 2009 - heden) 6 november 09 - Mother of all Carry Trades Faces an Inevitable Bust; previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page
(november 2009 - heden) 7 november 09 - als er vanuit een centrale bank het woord ‘doom’ gebruikt wordt, dan valt daar een ding met zekerheid uit af te leiden: dat er inderdaad nog aanzienlijke risico’s voor de toekomst zijn: Bank of England says financiers are fuelling an economic ‘doom loop’; 29 november 09 - niet bepaald wereldschokkend, maar wel helder en duidelijk: Stock Market Rally Needs an Earnings Boost; 2 december 09 - idem: Stocks Start Looking Dear Again; 7 december 09 - in vervolg op twee eerdere stellingen op deze site op pagina’s een en drie hiervoor, zie: Moody’s: Option ARMs Show “Dismal Performance”; 8 december 09 - zie als historische achtergrond (I) bij de risico’s van de afgelopen twee jaar de grafiek in dit Reuters-artikel van R. Winkler; 21 december 09 - laagste punt in de lange termijn rente bereikt? Zie dit artikel van Calculated Risk; 21 december 09 - excuses ‘Bankers’ style’: videoclip van ComedyCentral; 21 december 09 - zie als historische achtergrond (II) bij de afgelopen twee jaar met name de derde grafiek in deze column van Calculated Risk; 20 januari 10 - waarom de lange termijn risico/rendementsverhouding volgens Holland-Invest nog steeds sterk onvoordelig is: a) vanwege de economische risico’s: Option ARM Recast Update van Calculated Risk en That 1937 Feeling van Paul Krugman; b) vanwege de rente risico’s: The Risky Rich van Nouriel Roubini en Wells Fargo on Interest Rate Risk via Calculated Risk; 20 januari 10 - Wall Street Bonuses in perspectief: videoclip van ComedyCentral; 4 februari 10 - in aanvulling op eerdere opmerkingen van Holland Invest (zie de pagina’s hiervoor) over de nog steeds onder de huidige beursrally liggende enorme risico’s: Reddingsplan Amerikaanse Banken Onvoldoende, Government Programs Risk Re-Inflating Bubble en As Values Slide, More Weigh Walking Away From Mortgages; 4 februari 10 - ter compensatie: een videoclip van ComedyCentral over (onder andere) de kwaliteit van gratis beleggingsadvies; 15 februari 10 - Prime Jumbo RMBS Approach 10% Delinquent; The Case for Higher Inflation en (terecht) Duitse politici: geen geld voor Grieken;
1 maart 10 - meer van hetzelfde: Housing Reports: Another Wave of Distressed Sales; Topeconoom VS vreest voor oplaaien recessie; Leaving the Euro Would Trigger the Mother of All Financial Crises; How Greece Can Devalue Without Devaluing; previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page
(vervolg maart 2010 - heden) 15 maart 10 - conform hetgeen Holland Invest daar begin 2009 over stelde begint de VS nu aan een doordachte poging tot het verlagen van de verschuldigde hoofdsommen, zie: ‘FDIC to Test Principal Reduction’ en ‘Short Sales and 2nd Liens’ (zie ook de artikelen van 29 maart 2010 hieronder); 15 maart 10 - waarom Griekenland het eigen probleem zelf kan en moet oplossen, zie: ‘Patchwork Retirement Plan Add’s to Greece’s Debt Woes’; en, 15 maar 10 - Organisatie van Amerikaanse bankiers is tegen bescherming van de consument, zie: ‘Quote of the Night: Consumer Financial Protection Agency’; 29 maart 10 - meer informatie over het verlagen van de verschuldigde hoofdsommen, zie: ‘HAMP Principal Write-Downs’ en ‘BofA’s Principal Reduction Plan’; 29 maart 10 - ter illustratie van hetgeen Holland Invest begin 2009 stelde over afschrijvingen tot 70% op subprime en Alt-A mortgageproducten, zie: ‘We Bought a Toxic Asset; You Can Watch it Die’; 29 maart 10 - diverse artikelen over de nog steeds onder de huidige beursrally liggende risico’s, zie: ‘Payback Time - Corporate Debt Coming Due May Squeeze Credit’ en ‘Fundamentally - Hold the Applause for This Rally’; 29 maart 10 - conform hetgeen Holland Invest daar begin 2009 over stelde krijgt het inflatierisico’s voor in ieder geval Amerika nu steeds meer en serieuzere bijval, zie: ‘Crisis gaat leiden tot mega-inflatie’; 29 maart 10 - als Holland Invest een jaar of twee geleden goed geïnformeerd is, heeft België met name geknoeid met de komende pensioenverplichtingen. Zie: ‘Hoogleraar tipt België als Griekenland van Noorden’; 8 april 10 - meer over de door Holland Invest begin 2009 voorziene veel grotere omvang van noodzakelijke afwaarderingen op hypotheken: ‘Irish Banks may require up to € 32 billion’; 8 april 10 - meer over de nog steeds onder de huidige rally liggende aanzienlijke onzekerheden en risico’s: ‘Pimco ziet toegenomen risico’s’, ‘Econoom Shiller: Crisis nog niet voorbij’ en specifiek voor Amerika ‘State’s Debt Woes Grow Too Big to Camouflage’; 19 april 10 - meer redenen waarom er op dit moment sprake lijkt te zijn van een bear rally en niet van een permanent herstel: ‘So, How Are Stock Prices Now That We’re Back At DOW 11.000? They’re 30% Overvalued’; 19 april 10 - meer over de lange termijn onderliggende risico’s: ‘Interest Rates Have Nowhere to Go but Up’, ‘Don’t Bet the Farm on the Housing Recovery’ en ‘Towns in Europe Learn About Swaps the Hard Way’. previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 - next page
(mei 2010 - heden) 11 mei 10 - met betrekking tot de problemen in Griekenland en Europa zie: ‘A Money Too Far’ van Paul Krugman. Wederom geldt hetgeen Holland Invest daar eerder al over stelde: geld in het systeem pompen was en is nodig maar zal slechts tijdelijk
helpen aangezien de beurs- en liquiditeitscrisis een symptoom is van een aantal negatief op elkaar inwerkende dieper liggend economische, financiële, sociale en politieke problemen. Hierdoor zal het uitstellen van het nemen van de broodnodige (en voor de politici: electoraal) weinig populaire fundamentele economische, financiële, sociale en politieke beleidswijzigingen (mondiaal, binnen de EU en in Griekenland) enkel uitstel van executie betekenen. In andere woorden, Holland Invest is onder de huidige omstandigheden nog steeds van mening dat de risico’s op een herhaalde, grotere, klap op de diverse beurzen (en dan met veel grotere recessionele gevolgen in de reële economie) hand over hand toenemen. Het verleden wijst echter uit dat het voorspellen van het moment van die klap buitengewoon lastig is. Dit kan morgen zijn, maar ook pas over een aantal jaar. Voorlopig handhaaft Holland Invest dan ook nog steeds een liquiditeitspositie van 70%. In verband met een beleidswijziging was dit voorlopig het laatste publiek toegankelijke commentaar op de meest recente ontwikkeling. Indien u op de hoogte gesteld wilt worden over de eventuele hervatting van deze actualiteitsservice kunt u dat laten weten via het reactieformulier. 24 mei 10 - de aan de beleidswijziging van 11 mei ten grondslag liggende redenen zijn voorlopig opgelost met het verplaatsen van de actualiteitsservice naar een aparte website. New updates to this service can be found here: (www.hollandinvest.blogspot.com). previous page - 1 | 2 | 3 | 4 | 5 | 6 | 7 LONG TERM FORECASTS
The reliability of the long term forecast When making its long term forecasts, Holland Invest needs to naturally limit itself to making an informed guess about amplitude and direction of the big ‘unstoppable’ social and economic events (e.g. the effect of retirement of the Baby Boom Generation, the rise of China / Asia / Latin America, etcetera). This limits the input into these long term forecasts to just a few main events and causes a lack of detail in its prediction. Together, these two characteristics limit the reliability and practicality of the long term forecasts. Explanation on the length of the long term period Holland Invest defines the long term as a period of ten to twenty years long. This is a somewhat arbitrary choice. Nevertheless, this length of time can be defended, both in practice as in theory, by a number of noticeable cycles in the real economy. Frequency of forecasts Holland Invest’s choice to update its long term forecast only once every ten years is based both on a number of noticeable cycles in the real economy and on the slow developing nature of the social and economic events that are the subject of these long term forecasts.
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2003 - 2022 Real economy Given the political and economic challenges that can already be seen to be building momentum and / or are quite obvious to start doing so in the not too distant future, Holland Invest expects during the coming twenty years a lot of turmoil within the real economy, the financial economy and on a political level. Furthermore, Holland Invest thinks it quite likely that a lot of those challenges will interlock forces and pose practical, financial and political dilemmas on an unexpected large scale. Thus, this twenty year period might very well be the threshold to major and lasting changes in the political and economical forces between countries. Though such a period of profound change poses not only unique risks but also unique investment opportunities, Holland Invest will during this period primarily focus on its first and foremost objective: preserving its asset base. Financial economy During this period the best long term investment opportunities will mostly be found in Asia and some countries in Latin-America (most likely: Brasil, Chili and maybe Mexico). Possibly, a select few true hedgefunds might also in retrospect turn out to have been good long term investments. However, as always the ultimate investment return will be dependant on the moment (in other words: on what conditions) one is to invest and in what funds / stocks. Conclusion All in all Holland Invest thinks that during the coming twenty years (and this time far more so then in other time periods) the key to long term growth of one’s assets will be to prevent big investment mistakes and/or bad luck resulting in significant capital loss.
