I admire Warren Buffet cause of his wisdom and his knowledge. I think there aren’t many investors out there who have similar experience in the market like he has.
With his long-term investing strategy and his company Berkshire Hathaway he made billions of dollars.
But he is also one of the happy ones because he participated from long bull markets and moreover from market crashes which recovered each time very quickly.
He started investing in a golden time window, right after the World War One and two.
He invested his money in a time of globalization and technological development. Today he is like the superstars of the investment industry.
This strategy could last and work even within the next decade. But I have other ideas, suggestions and plans.
This human crisis shows me again the difficulties of a globalized world. Don’t get me wrong on this, I’m a big supporter of a globalized world but I don’t think that everyone will see it the same when we have to rebuild our economy’s all over the world again. At the moment I can clearly see three big trends which also were accelerated by the corona virus crisis
I think many states and countries will realize that critical goods are often produced in third world countries. This works very well if the economies and supply chains are working and also the “just in time” principal works well. But it disintegrates if we get into a situation like we’re right now. This could be followed by intervention by the government to bring these industries back into the country. In the long-term, national companies in these industries like for example pharmaceutical production could be protected from takeovers even more. Moreover, a direct participation by the government in these industries could be the new reality to support them and help them to get through this financial misery.
This is a phenomenon/development we could see even before the crisis started and belongs to the big trends of the 21st century. But with social distancing measures and home office, digitalization becomes more important than ever. People realize the opportunities they have with a digitized environment and further on I think people will rely on that.
Concentration of power and too big to fail scenarios in different industries
Companies like Amazon, Microsoft or Cloud Provider played a huge role in the stock market even before the crisis. But these technologies will become even more important. A study published by the IWF suggested that two-third of the growth in the market is caused already by established companies rather from new participants/players in the market. This is a new trend in the economy which could in worst case even lead to slower technological growth or moreover slower growth in the whole economy.
I don’t trust myself to say rather these things will be good or bad for the market in the near future. But the first step is to understand these things and to accept them.
If you can understand what we have to deal with, you’re able make rational decisions and participated from the opportunities in the market.
I think I was good with my strategies and thoughts before the crisis and will be in time, I hope you’ll be too.
Stay safe out there!