Catalyst for economic recovery

30 March 2019

Dear Fellow Investor,

Catalyst for economic recovery

 Warren Buffet spoke on CNBC last night and stated that revenue growth in BNFS, the largest railroad in North America  is slowing.

This is a symptom of rising interest rates, credit growth slowing  trade wars and tariff raising.

Housing and car sales in the US and many other countries are softening.

Since 2008  the world economic recovery has been driven by low interest rates and credit growth

In 2018 interest rates began to rise and credit growth reversed. Banks tightened up and stock markets reversed. Several trillion dollars of wealth were wiped off world stocks in November/ December 2018.

The authorities  panicked and reversed the tight money policies. in most developed markets.

The abrupt policy reversal stopped the blood bath and   world stock markets recovered.

The real economy dealing with practical everyday necessities such as railroad transportation and house building however; have  not recovered.

Uncertainties such as trade wars, Brixit and politics cloud the background.

A major cloud hovering over the US economy has been the Russian/ Trump collusion charges in the 2016 presidential election.  The establishment, the elites and the media   have exploited the Russian collusion story to attempt to unseat   Trump and destroy him and his party.

For 2 years Robert Muller the chief Federal prosecutor has investigated Trump and last Friday Trump was unexpectedly vindicated.  Not guilty. The opposition Democrat party is shocked and devastated. Trump’s poll ratings jumped over 10 points. Even CNN who are Trump haters were forced to apologize for pushing the false Russia narrative.

With this new  political capital, Trump should be able to get an interest rate cut and perhaps QE 4

There is also  progress on trade talks with China.

The whole world will benefit from the policy shift. Stock markets will continue to recover.

A base is forming on the KLSE and SGX. Sentiment is extremely bearish but our quality shares are holding.

Bank Negara issued an economic  report Friday confirming the strength of the Malaysian economy

The glass is half full not half empty.

We have decided to hold our Investors Club meeting  

On Saturday 20 April at 11 AM at my office in Phillip Capital Mgt.

We had originally scheduled on 13 April but due to room availability we moved forward to 20 April.

I will be speaking on the Capitalist Code  which is a way to build wealth over time in high quality dividend stocks. As we get nearer to the date we will let you know the other topics. Please let me know if you have interest.

 

Invest well and grow your wealth

Bill

 

Today’s critters are  the Democrat Donkeys who have been fishing for 2 years on Trump’s collusion case. They came up empty handed. This removes a major market uncertainty.