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Home Page  Monty Guild |
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Mr. Guild founded Guild in 1971. Prior to founding the company he was an analyst at a bank and a hedge fund. Mr. Guild is a recognized expert in the areas of international investing and economics. He has been a writer and speaker on economic issues for 30 plus years and has been widely quoted in the world media. He holds a BA in economics and an MBA with highest honors. He publishes articles periodically on his free website on global investment www.howtoinvestglobally.com.
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Sub Prime Meltdown...we Were not Surprised...were Any Vigilant Observers Surprised?WE HAVE BEEN PREDICTING THAT DERIVATIVES WERE A POTENTIAL MESS FOR MANY YEARS
Surprise, the hedges that some failed speculators in the bond market have put on, failed to act in the way that they were mathematically supposed to act. This is according to Sowood, the failed Boston based, bond speculating hedge fund.
For years, we have been telling people in public and in private that those who write the derivatives, including bond hedges use mathematical models which do not understand the psychology and periods of illiquidity that exist in the investment markets. Things are Good for our StrategyWE HAVE BEEN SUBSTANTIALLY INSULATED FROM THE BOND MARKET PANIC TAKING PLACE IN THE U.S. WE HOLD A LARGE AMOUNT OF CASH FOR THE ACCOUNTS THAT WE MANAGE, AND WE ARE ENJOYING A GOOD PERIOD OF INVESTMENT PERFORMANCE. WE EXPECT THERE TO BE A PERIOD OF ALTERNATING RALLY AND DECLINE FOR A FEW WEEKS WHICH WILL BE FOLLOWED BY A RESUMPTION OF THE UPTREND, ESPECIALLY FOR THE ASIAN MARKETS, ENERGY AND METALS, WHERE WE HAVE BEEN INVESTING Periodic Market Corrections and Rotation Occur....they are Normal and Create OpportunityAlthough temporarily painful, market corrections are a healthy development. Rising markets, that periodically correct, and climb the proverbial wall of worry, last longer and rise higher.
The current market correction in metals, energy and stocks is a normal one; and we have expected it. Accordingly, we have built a large cash position which we will use to buy good stocks as they fall to attractive levels. We like panic days like yesterday. They provide low prices at which to buy stocks. The Recent Panic About Higher Interest Rates: Why are People so Scared?People often say that interest rate increases put pressure on inflationary expectations. In our opinion, this is only true if interest rate increases are faster than inflation increases. Currently, it is obvious that inflation is rising faster than interest rates and as we allude to above, this causes inflationary expectations to grow. Surprise, Surprise-energy, Precious Metals and Base Metals Will be in Demand in the Coming YearsGlobal economic power is shifting from the United states to devoloping Europe and Asia. As power shifts from the United States and other countries exprience accelerated economic growth, the US gold holdings will continue to shift abroad and its currency will continue to depreciate. Sovereign Wealth Funds are Changing the Investment Landscape, and May Push Good Stocks and CommoditiSOVEREIGN WEALTH FUNDS ARE CHANGING THE INVESTMENT LANDSCAPE, AND MAY PUSH GOOD STOCKS AND COMMODITIES WHICH ARE IN DEMAND TO MUCH HIGHER LEVELS All is not Well in IranIRAN HAS LEAKED THE BEGINNING OF GASOLINE RATIONING AND A GASOLINE PRICE RISE OF 25% TO THE PRESS IN THE WEST. Change Makes Some People Uncomfortable....it Makes Other People RichThe change that is being observed in the world economy is a perfect opportunity for investors to capitalize and make money. Bullish Development in IndiaThe Indian government is focusing on building infrastucture in second tier cities, which reinforces bullish outlook on Indian growth in the long run. Our Six Themes Continue for Global Investment Continue to be TimelyOur investment themes of the of continued Chinese and Indian growth, increased energy demand with constant supply, the appreciation of non-U.S. currencies, rising demand for financial services, growing demand for precious and industrial metals with stagnant supply, and growth of demand for transportation equipment are becoming more manifest over time.
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