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Benjamin · 17-11-2012, 09:48

Cliff Notes on The Age of Deleveraging by A. Gary Shilling

Nov 11th, 2012 by bill
http://alazycowboy.com/2012/11/11/cl...gary-shilling/
Das hier sind Notizen eines "Bill" zu diesem Buch:

siehe http://www.amazon.de/The-Age-Delever...3145780&sr=8-2

Slow Growth Ahead

Global slow growth in the next decade will result from
- the U. S. consumer retrenchment,
- financial deleveraging (finanzieller Schuldenabbau),
- increased government regulation and involvement in major economies,
- low commodity prices and
- the shift by advanced lands to fiscal restraint.

No Help from Anywhere

Four more reasons for slow global growth:

Rising protectionism,
continuing U. S. housing weakness,
deflation and
weak

state and local government spending.

Chronic Worldwide Deflation

Deflation comes in several varieties, but is fundamentally driven by supply exceeding demand. Productivity-saturated new tech and globalization will drive the good deflation of excess supply while slow economic growth introduces the bad deflation of deficient demand. As the combine, I look for chronic price declines of 2 to 3 percent annually.

Twelve Investments to Sell or Avoid

#1 Big-ticket consumer purchases

Consumer discretionary spending is getting whacked as Americans grow debt shy. Moreover, consumers will have less money to spend.

Autos, appliances, airlines, cruise lines and leisure and hospitality providers will suffer.

#2 Consumer lenders

America could be finally, finally kicking the credit habit. Credit card companies, like Visa (V), and various financial firms will pay the price.

#3 Conventional home builders

Home prices are dropping (Shilling predicts a 20% drop). People are losing interest in giant McMansions. Add to that America’s newfound antipathy toward debt and you’ve got a bear market for home builders.

You might want to avoid PulteGroup (PHM), Beazer Homes (BZH), M/I Homes (MHO), Ryland Group (RYL) and KB Home (KBH).

#4 Collectibles

Collectibles are another casualty of deflation. That Rembrandt could be worth less in a few years.

#5 Banks

Home prices aren’t done crashing. When they do, banks will suffer from a wave of foreclosures. The financial system will be revived after the crisis with new profit-crushing regulations.

Mortgage heavyweight Bank of America faces the biggest liability.

Shilling also names Goldman Sachs as a potential target for CDO suits.

#6 Junk securities

Shilling calls this year’s rally in junk bonds overblown. Slow revenue and cash flow growth will make it impossible for many firms to service debts.

#7 Flailing companies ('rudernde' Unternehmen)

Companies with below-average revenue growth and high fixed costs and debt will be the first to drop in the coming era.

Shilling does not give any examples. We’re going with US Steel.

#8 Low tech equipment producers

US industrial production has stalled and won’t need many machine tools and parts. Besides, these products are made a lot cheaper abroad.

#9 Commercial real estate

Demand isn’t increasing as the US economy stalls. Moreover, loans made in the bubble come due in 2012, threatening a wave of foreclosures that will crater demand.

#10 Commodities

Slow global growth means there won’t be much supply pressure for oil and other commodities. Meanwhile, deflation will bring down prices.

#11 Chinese and other developing country stock and bonds

Emerging markets aren’t there yet, Shilling says, and won’t be able to pick up the slack from a languishing U.S. For overheating markets like China, this will lead to a sudden crash.

#12 Japanese securities

Shilling predicted the Japanese crash in 1988, and he says the slow-motion train wreck isn’t over yet. Bad demographics and lack of export growth are just now making their pretense felt.

Ten Investments to Buy

#1 Treasury bonds

Shilling says he has been a 30-year Treasury bull since 1981. The "bond rally of a lifetime" is going to continue as deleveraging causes deflation. Even Ben Bernanke won’t be able to stop that.

#2 Dividend payers

There won’t be much growth, so you might as well collect dividends. A few examples include Procter and Gamble (PG), Unilever (UN), Coca Cola (KO) and PepsiCo (PEP).

#3 Consumer staples

Consumer discretionary spending is getting whacked, but people still need to buy bread and socks. Stores like Walmart are well-positioned to grow.

#4 Small luxuries

People want to spend money on something. Shilling says items like snakeskin tote bags, five-blade razors and designer jeans could be the new type of conspicuous consumption, taking the place of big ticket items like sports cars.

#5 The dollar

With Europe and Japan drowning in debt and emerging markets verging on a crash, the dollar is going to start looking pretty good. Shilling says the dollar will remain the world’s currency, with no real competition from gold or the yuan.

Meanwhile, America will be mired in deflation.

#6 Investment managers and financial planners

Low investment returns will discourage day-traders and encourage the use of professionals.

#7 Factory-built houses and rental apartments

Cheap small homes are the order of the day, as old people look for a cheap retirement spot and young people look for a small mortgage.

Renting will be a more and more popular strategy.

#8 Health care companies

As America ages, the health care industry seems unstoppable. Even Obama’s health care reform ended up boosting earnings for many companies.

#9 Productivity enhancers

Anything that helps juice bottom lines will do well in the new era. This includes consulting groups, computers, internet, biotech and telecom.

#10 North American energy

Shilling is bullish on deepwater drilling and natural gas, as well as coal and nuclear. He has particularly high hopes for the massive Canadian oil sands.

17-11-2012, 09:48	#10
Benjamin TBB Family Registriert seit: Mar 2004 Beiträge: 10.374	Cliff Notes on The Age of Deleveraging by A. Gary Shilling Nov 11th, 2012 by bill http://alazycowboy.com/2012/11/11/cl...gary-shilling/ Das hier sind Notizen eines "Bill" zu diesem Buch: siehe http://www.amazon.de/The-Age-Delever...3145780&sr=8-2 Slow Growth Ahead Global slow growth in the next decade will result from - the U. S. consumer retrenchment, - financial deleveraging (finanzieller Schuldenabbau), - increased government regulation and involvement in major economies, - low commodity prices and - the shift by advanced lands to fiscal restraint. No Help from Anywhere Four more reasons for slow global growth: Rising protectionism, continuing U. S. housing weakness, deflation and weak state and local government spending. Chronic Worldwide Deflation Deflation comes in several varieties, but is fundamentally driven by supply exceeding demand. Productivity-saturated new tech and globalization will drive the good deflation of excess supply while slow economic growth introduces the bad deflation of deficient demand. As the combine, I look for chronic price declines of 2 to 3 percent annually. Twelve Investments to Sell or Avoid #1 Big-ticket consumer purchases Consumer discretionary spending is getting whacked as Americans grow debt shy. Moreover, consumers will have less money to spend. Autos, appliances, airlines, cruise lines and leisure and hospitality providers will suffer. #2 Consumer lenders America could be finally, finally kicking the credit habit. Credit card companies, like Visa (V), and various financial firms will pay the price. #3 Conventional home builders Home prices are dropping (Shilling predicts a 20% drop). People are losing interest in giant McMansions. Add to that America’s newfound antipathy toward debt and you’ve got a bear market for home builders. You might want to avoid PulteGroup (PHM), Beazer Homes (BZH), M/I Homes (MHO), Ryland Group (RYL) and KB Home (KBH). #4 Collectibles Collectibles are another casualty of deflation. That Rembrandt could be worth less in a few years. #5 Banks Home prices aren’t done crashing. When they do, banks will suffer from a wave of foreclosures. The financial system will be revived after the crisis with new profit-crushing regulations. Mortgage heavyweight Bank of America faces the biggest liability. Shilling also names Goldman Sachs as a potential target for CDO suits. #6 Junk securities Shilling calls this year’s rally in junk bonds overblown. Slow revenue and cash flow growth will make it impossible for many firms to service debts. #7 Flailing companies ('rudernde' Unternehmen) Companies with below-average revenue growth and high fixed costs and debt will be the first to drop in the coming era. Shilling does not give any examples. We’re going with US Steel. #8 Low tech equipment producers US industrial production has stalled and won’t need many machine tools and parts. Besides, these products are made a lot cheaper abroad. #9 Commercial real estate Demand isn’t increasing as the US economy stalls. Moreover, loans made in the bubble come due in 2012, threatening a wave of foreclosures that will crater demand. #10 Commodities Slow global growth means there won’t be much supply pressure for oil and other commodities. Meanwhile, deflation will bring down prices. #11 Chinese and other developing country stock and bonds Emerging markets aren’t there yet, Shilling says, and won’t be able to pick up the slack from a languishing U.S. For overheating markets like China, this will lead to a sudden crash. #12 Japanese securities Shilling predicted the Japanese crash in 1988, and he says the slow-motion train wreck isn’t over yet. Bad demographics and lack of export growth are just now making their pretense felt. Ten Investments to Buy #1 Treasury bonds Shilling says he has been a 30-year Treasury bull since 1981. The "bond rally of a lifetime" is going to continue as deleveraging causes deflation. Even Ben Bernanke won’t be able to stop that. #2 Dividend payers There won’t be much growth, so you might as well collect dividends. A few examples include Procter and Gamble (PG), Unilever (UN), Coca Cola (KO) and PepsiCo (PEP). #3 Consumer staples Consumer discretionary spending is getting whacked, but people still need to buy bread and socks. Stores like Walmart are well-positioned to grow. #4 Small luxuries People want to spend money on something. Shilling says items like snakeskin tote bags, five-blade razors and designer jeans could be the new type of conspicuous consumption, taking the place of big ticket items like sports cars. #5 The dollar With Europe and Japan drowning in debt and emerging markets verging on a crash, the dollar is going to start looking pretty good. Shilling says the dollar will remain the world’s currency, with no real competition from gold or the yuan. Meanwhile, America will be mired in deflation. #6 Investment managers and financial planners Low investment returns will discourage day-traders and encourage the use of professionals. #7 Factory-built houses and rental apartments Cheap small homes are the order of the day, as old people look for a cheap retirement spot and young people look for a small mortgage. Renting will be a more and more popular strategy. #8 Health care companies As America ages, the health care industry seems unstoppable. Even Obama’s health care reform ended up boosting earnings for many companies. #9 Productivity enhancers Anything that helps juice bottom lines will do well in the new era. This includes consulting groups, computers, internet, biotech and telecom. #10 North American energy Shilling is bullish on deepwater drilling and natural gas, as well as coal and nuclear. He has particularly high hopes for the massive Canadian oil sands.