Still more money than Fools!
Beat Notz of Notz Stucki in Geneva offered me (Charles Gave) some invaluable advice. “Never forget that this is an easy business, Charles,” he said. “All you have to do is figure out whether there are more fools than money, or more money than fools. Once you’ve figured that out, you’ll know whether to reduce or to increase your risk”.
Of course it's not easy to figure out if there is more money than....!
I believe we still have more money than fools. Why? Because I see many people that ask me what to do with their money. There is definitely excess savings in the world. Too much money. Very few opportunities to invest. Why?
There is excess capacity in almost any industry. OIl, Copper, car's etc....Excess capacity is a certain way to prices to go down and profits with it. Why invest in a car factory if the existing factories are producing at 50%?
So why the market is going up in the last 5 years? because the companies that can make money are being chased by the money that cannot find new investments to do. Few companies have a product and can charge for it. If you know something, if you have a brand or if you have a product that really can improve the life of your customer you will be bid up big time.
When is this party going to end? Usually when the FED or the ECB raises rates and people/savers can choose to earn 1 or 2% in a sure deposit. Now they make zero!
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