Is This A New Cycle?

With bated breath, each year investors from around the world await the annual letter from the Oracle of Omaha, Warren Buffett. 

In my humble opinion, this year we received more insight into the current market conditions than any before. It seems that Buffett's company Berkshire Hathaway has joined in the global trend of buying back their own shares in 2018.

Warren is known to be able to spot companies that are at fair value and it seems that the 88-year-old legendary investor is unable to find enough good deals out there that are worthy of his investment. So instead of buying new companies, he's opted to buy back shares in his own company.

Thanks to an entire decade of low interest rates and ample liquidity injections from the world's central banks, companies are flush with cash and stocks are overvalued. (Rant continued, including implications for crypto, in section two)

Traditional Markets

Stocks are flying today on the news that President Trump has postponed the March 1st deadline for a US-China trade deal. 

As the tweet did not mention any new deadline, we can probably assume that there isn't one for the time being. The China 50 index has soared a jaw-dropping 6.31% this morning.

Concurrently, it seems that the timetable for Brexit has once again been pushed forward. Prime Minister May has set her sights on March 12th for a final Brexit vote in Parliament. Of course, this deadline hardly seems set in stone and the real deadline for the UK to exit the EU is March 29th. Of course, this deadline hardly seems set in stone either and could very well be moved. Talk of extending it to mid-April is already floating around.

For the first time in a long time, there are no countdown timers hanging over the market's head. We did prophesize that such a day might come in Friday's market update but I never thought it would come so soon.

To be clear the geopolitical risks have not gone away, only that the specific time frame for any single risk materializing has become so obscure as to not be relevant. With the can successfully kicked down the road the central banks are once again in the driver's seat.

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Please note: All data, figures & graphs are valid as of February 25th. All trading carries risk. Only risk capital you can afford to lose.

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