Latest / Merryn Talks Money / Roundup: Why Gold Is Having a Moment, UK Eco Health and A Tricky Day for Markets

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Roundup: Why Gold Is Having a Moment, UK Eco Health and A Tricky Day for Markets · Merryn Talks Money

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  Speaker 2: And Welcome to the Meron Talks Money Weekly round Up.
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  Speaker 1: This is our thoughts on the biggest stories and markets
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• 1:59
  Speaker 1: We're going to talk about gold is having a bit
• 2:01
  Speaker 1: of a moment. We're going to talk about why. But
• 2:03
  Speaker 1: of course I'm a proper gold bug. I love gold.
• 2:05
  Speaker 1: I always have gold in my portfolio. John is a
• 2:07
  Speaker 1: little more cautious about it. He's more well, sometimes gold,
• 2:10
  Speaker 1: sometimes not gold.
• 2:11
  Speaker 2: I'm always gold.
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  Speaker 1: We'll talk about that, We'll talk a bit about the UK,
• 2:15
  Speaker 1: which is really doing fine despite what the government says,
• 2:17
  Speaker 1: and then we'll talk a little bit about this most
• 2:19
  Speaker 1: recent market wobble and the many market wobbles that we've
• 2:22
  Speaker 1: seen in the past time we'll see in the future.
• 2:24
  Speaker 1: So let's start John with gold, which, as I say,
• 2:27
  Speaker 1: you tend to be more rational about than me. Maybe
• 2:29
  Speaker 1: I'm just a genuine old fashioned gold bug. And you know,
• 2:33
  Speaker 1: I'm always worried about fair currency, always worried about dead
• 2:36
  Speaker 1: was worried about everything collapsing. But at the moment gold
• 2:39
  Speaker 1: is behaving as though I'm right.
• 2:41
  Speaker 4: Right, Yeah, absolutely, and I mean to be fair, I'm
• 2:45
  Speaker 4: quite a final gold. I think there's good reasons to
• 2:48
  Speaker 4: own it. But yeah, goals been growing up in this
• 2:50
  Speaker 4: obviously hit a rare cult this year, and pretty much
• 2:53
  Speaker 4: any currency that you care a name, and the weird
• 2:58
  Speaker 4: thing or the thing that has been own people to
• 3:00
  Speaker 4: an extent is the up. Until very recently, gold has
• 3:05
  Speaker 4: kind of moved with us real interest rates. So if
• 3:09
  Speaker 4: interest rates are going up, then gold should be going down,
• 3:12
  Speaker 4: and if the dollar is fairly strong, then gold should
• 3:15
  Speaker 4: probably be going down, but that hasn't actually been happening.
• 3:18
  Speaker 4: And the most certainly to my mind, the most obvious
• 3:23
  Speaker 4: reason for that is because of the nature of the
• 3:27
  Speaker 4: people who've been buying it during this gold bull market,
• 3:32
  Speaker 4: and so normal people and investors who normally buy via
• 3:36
  Speaker 4: exchange traded funds ETFs, those holdings have been falling consistently
• 3:41
  Speaker 4: up until very recently, and the people who've been buying
• 3:43
  Speaker 4: are actually the central banks in central banks across the world,
• 3:47
  Speaker 4: but obviously the big ones are China and Russia, and
• 3:51
  Speaker 4: those central banks are the ones who are worried that
• 3:53
  Speaker 4: they might at some point not be able to rely
• 3:56
  Speaker 4: on what is currently the dominant form of money and
• 4:00
  Speaker 4: the world, which is the US dollar, And to my mind,
• 4:03
  Speaker 4: that's what it's been the main driver that's called bull market,
• 4:06
  Speaker 4: and that's really interesting because it is somewhat different to
• 4:09
  Speaker 4: what has driven it up until now or in the past.
• 4:12
  Speaker 4: At least.
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  Speaker 1: It's interesting, isn't We talked about this in one of
• 4:15
  Speaker 1: the podcasts that we did from the Edinburgh Fringe with
• 4:18
  Speaker 1: our panel Gas. We talked about what it is that's
• 4:20
  Speaker 1: driving golden why central banks want to keep holding it,
• 4:23
  Speaker 1: And it did come down to this, the sense of
• 4:24
  Speaker 1: geopolitical insecurity effectively.
• 4:26
  Speaker 4: Yeah, well, I suppose. The other thing I do find
• 4:30
  Speaker 4: interesting about Golden I mentioned this in the newsletter, is
• 4:34
  Speaker 4: that does a very famous moment in Gordon Brown. One
• 4:37
  Speaker 4: of his many things he did that lots of people
• 4:39
  Speaker 4: don't like where he sold the Bank of England's gold
• 4:43
  Speaker 4: in nineteen ninety nine he started and that also happened
• 4:47
  Speaker 4: to be basically the all time low for the gold price.
• 4:50
  Speaker 4: So he often gets criticized for that, and you know,
• 4:52
  Speaker 4: that's pifole. This an acceptable stacktic and I beaten with.
• 4:56
  Speaker 4: But when you look at why he did it, I
• 4:58
  Speaker 4: think it's actually a really interesting presents a really interesting
• 5:01
  Speaker 4: turning point or the kind of bottom for gold because
• 5:05
  Speaker 4: what he did was he sold the gold reserves and
• 5:07
  Speaker 4: then bought euros with the money.
• 5:11
  Speaker 1: There's a vote of confidence in this new currency and
• 5:14
  Speaker 1: also a vote of confidence in what he believed.
• 5:17
  Speaker 2: To be a new world.
• 5:18
  Speaker 4: Yeah.
• 5:18
  Speaker 1: Absolutely, a globalized world, a world in which you didn't
• 5:21
  Speaker 1: need old fashion munk like gold because it's very peaceful.
• 5:24
  Speaker 2: Everyone's happy.
• 5:25
  Speaker 1: Globalization is expanding a piece, and it makes sense to
• 5:29
  Speaker 1: hold the new currency of your neighbor.
• 5:32
  Speaker 4: Yep. And now we're going in the opposite direction again.
• 5:36
  Speaker 4: You know, gold I kind of record high because that
• 5:41
  Speaker 4: that new world has demonstrably well, it's not necessarily failed,
• 5:46
  Speaker 4: but it hasn't moved as it hasn't gone as smoothly
• 5:49
  Speaker 4: as was hoped back then. And I do I do
• 5:52
  Speaker 4: think that's that's probably the key difference, because it's not
• 5:54
  Speaker 4: even so much about inflation of whether it all hold
• 5:57
  Speaker 4: his value. It's actually about whether you're going to need
• 5:59
  Speaker 4: to have a form of money that is not dependent
• 6:04
  Speaker 4: on another country's permission or creditworthiness to use it. And
• 6:10
  Speaker 4: then that is pretty I think that's quite radical.
• 6:12
  Speaker 1: That's quite a big shift, it is, And it's what
• 6:14
  Speaker 1: they always say about what the goldbugs always say about
• 6:17
  Speaker 1: gold that does not dependent on anything, doesn't rely on
• 6:20
  Speaker 1: any government, doesn't rely on any politics, that don't rely
• 6:22
  Speaker 1: on anything. It stands alone at a currency in an asset.
• 6:26
  Speaker 4: Yeah, And to me that implies that probably the bull
• 6:28
  Speaker 4: market can go further. But I also think is one
• 6:32
  Speaker 4: other thing I would say that it's also important, is
• 6:34
  Speaker 4: that this is this is about gold. It's not about
• 6:39
  Speaker 4: all the offshoots of gold. I mean, I think if
• 6:42
  Speaker 4: gold keeps going up, then I think things like silver
• 6:45
  Speaker 4: and gold miners will do well. And if it gets bubbly,
• 6:49
  Speaker 4: which I don't think it is yet, but it's presumably
• 6:51
  Speaker 4: at some point it will get bubbly, then you would
• 6:53
  Speaker 4: expect silver and gold miners to maybe start outperforming it.
• 6:57
  Speaker 4: But at the moment, is very much about this fundamental
• 6:59
  Speaker 4: case of I want to win and ask it. I
• 7:01
  Speaker 4: guess the US government can't confiscate from me by the
• 7:04
  Speaker 4: back door. Yeah.
• 7:06
  Speaker 1: I mean, it's interesting, isn't it. And we've been saying
• 7:08
  Speaker 1: for years to everyone who says gold is over, there's
• 7:10
  Speaker 1: no point in gold, bitcoin, etcetera, etcetera, all the other
• 7:13
  Speaker 1: reasons not to have gold. But it was good enough
• 7:15
  Speaker 1: for the world's central banks, and they all have some gold,
• 7:19
  Speaker 1: and the majority of them are increasing their holdings of gold.
• 7:22
  Speaker 1: I don't think there are any central banks left selling gold.
• 7:25
  Speaker 1: If it's good enough that every global central bank wants
• 7:29
  Speaker 1: to hold it as a financial backup, why would you
• 7:32
  Speaker 1: not do so too?
• 7:34
  Speaker 4: Yeah, exactly.
• 7:35
  Speaker 2: You don't seem to need to make much more of
• 7:37
  Speaker 2: a case than that, do you.
• 7:39
  Speaker 4: No, No, there's nothing superstitious about it. This is as
• 7:44
  Speaker 4: close to the science of monetary policy as it gets.
• 7:47
  Speaker 1: Yeah, and you can argue about whether you know bitcoin
• 7:50
  Speaker 1: is a new form of digital gold and you should
• 7:53
  Speaker 1: hold that for the same reasons.
• 7:54
  Speaker 2: But the world's central banks aren't doing that.
• 7:57
  Speaker 4: They're holding gold, at least they're not telling this true.
• 8:00
  Speaker 1: That's true. There might be something else going on. Back
• 8:03
  Speaker 1: to the UK to talk about that now. The UK
• 8:05
  Speaker 1: Central Bank is not one of the big gold buyers
• 8:08
  Speaker 1: at the moment as far as I know.
• 8:09
  Speaker 4: Not that they I'm aware of, need double check the
• 8:13
  Speaker 4: most recent stats.
• 8:17
  Speaker 1: Maybe they should be looking at the UK. We hit
• 8:21
  Speaker 1: terrible things from our new government about the worst financial
• 8:24
  Speaker 1: inheritance ever. Everything is terrible. You know, you've got to
• 8:28
  Speaker 1: you've got to let old people get cold over the
• 8:30
  Speaker 1: winter to stop the bond market imploding, et cetera, et cetera.
• 8:34
  Speaker 1: But you and I we don't really buy that. In fact,
• 8:37
  Speaker 1: this inheritance wasn't that bad. I mean, it's bad, and
• 8:40
  Speaker 1: it's bad in lots of ways, terrible productivity, awful levels
• 8:44
  Speaker 1: of debt and out of control public sector, et cetera.
• 8:47
  Speaker 2: But it's not quite as bad as our new government
• 8:50
  Speaker 2: would like to have us think no.
• 8:52
  Speaker 4: I mean, I think the main point is that the
• 8:54
  Speaker 4: UK economies going in debt day action. And as you
• 8:57
  Speaker 4: see that, there's lots of things you can say about it,
• 9:00
  Speaker 4: and there are lots of fundamental problems that need to figure.
• 9:03
  Speaker 2: Huge fundamental problems.
• 9:04
  Speaker 1: I mean, you know, I'm giving you this thing that's
• 9:06
  Speaker 1: not quite as bad as we think they are. But
• 9:08
  Speaker 1: if you if you pulled right back away from the
• 9:11
  Speaker 1: minor stuff, like you know, a little bit of growth here,
• 9:14
  Speaker 1: little ascilation there, et cetera, et cetera, as a whole,
• 9:17
  Speaker 1: it's pretty bad. But let's do the positive bit for that.
• 9:20
  Speaker 4: Well, definitely, I mean, I suppose the point is so.
• 9:22
  Speaker 4: I mean, earlier this week we got one of the
• 9:25
  Speaker 4: labor MPs. I think Lucy Powell was put on the
• 9:30
  Speaker 4: spot obviously about this thing you're getting ready to win
• 9:32
  Speaker 4: a fuel allowance, and she saw it, came out and said, well,
• 9:35
  Speaker 4: if we hadn't done it, then there'd been a run
• 9:37
  Speaker 4: on the pound, and you know we'd have basically had
• 9:40
  Speaker 4: to repeat the Gilts crash in twenty twenty two. Now
• 9:44
  Speaker 4: I'm going to park the fact that I always end
• 9:47
  Speaker 4: up explaining why the Gilts crash actually happened. So I'm
• 9:50
  Speaker 4: sure you's have all heard that before.
• 9:52
  Speaker 1: Yeah, please go back to past episodes and listen to that.
• 9:55
  Speaker 2: John explains it very.
• 9:56
  Speaker 4: Well, exactly regardless of your views on that point difference
• 10:00
  Speaker 4: that one point four billion and a government spender more
• 10:03
  Speaker 4: than the trillion is not going to telp the gout's
• 10:06
  Speaker 4: market over and you can you know, throwing up again basically,
• 10:10
  Speaker 4: So this is kind of patently annoysense, but it is
• 10:12
  Speaker 4: a very useful excuse for whatever the government decides that
• 10:17
  Speaker 4: it actually wants to do at the next budget. You know,
• 10:20
  Speaker 4: they can basically stay whatever policy they want and then
• 10:23
  Speaker 4: say this is all because we need to worry about
• 10:27
  Speaker 4: the boord market, even if even if the net effect
• 10:30
  Speaker 4: of the policy will probably be to raise less money
• 10:33
  Speaker 4: like with the non domes for example, those risks they
• 10:36
  Speaker 4: are that they might just drive them all away rather
• 10:38
  Speaker 4: than milking them for a bit more cash.
• 10:42
  Speaker 1: It they'll stay as long as the UK is a
• 10:43
  Speaker 1: nice place to live, or a lot of them will
• 10:45
  Speaker 1: stay as long as the UK is a nice place
• 10:46
  Speaker 1: to live, as long as.
• 10:47
  Speaker 2: They fail you know, safe in the UK.
• 10:51
  Speaker 1: As long as they can educate their short run in
• 10:54
  Speaker 1: the UK and the private healthare system stalls strong and
• 10:56
  Speaker 1: all that kind of thing. I think a lot of
• 10:58
  Speaker 1: the non doms will will stay. But that's another.
• 11:01
  Speaker 2: Podcast we'll come back to. That is the UK a
• 11:03
  Speaker 2: pleasant environment.
• 11:04
  Speaker 4: To live in? It's all pretty straightforward stuff. It's like
• 11:08
  Speaker 4: the economy. Economic data keeps coming out like pretty positively.
• 11:12
  Speaker 4: They consumer spending is healthy enough. Companies keep coming out
• 11:17
  Speaker 4: with data saying that actually everything's fine. It's like earlier
• 11:21
  Speaker 4: this year, Ryan there was saying that it wasn't sure
• 11:23
  Speaker 4: how summer was going to be. But as it turns out,
• 11:25
  Speaker 4: both Ryany and Wizzy head record August for traffic numbers.
• 11:31
  Speaker 4: You know, the market for luxury watches is even stabilizing.
• 11:35
  Speaker 4: House prices annoyingly are starting to tick back up again.
• 11:40
  Speaker 4: The foot say one hundred is being pawed over the UK.
• 11:43
  Speaker 4: Rupert mud Duke's kind of like equivalent of Right Move
• 11:46
  Speaker 4: in Australia is thinking of buying Right Move here. We've
• 11:49
  Speaker 4: also just had a couple of big consolidations in the
• 11:53
  Speaker 4: real estate investment trust market. Everything's improving. And the interesting
• 11:58
  Speaker 4: is Britain does seem be divergent from certainly the Eurozone
• 12:03
  Speaker 4: and possibly even the US on this front, It's like
• 12:08
  Speaker 4: there are signs of the economy getting stronger at a
• 12:11
  Speaker 4: time when you know, the Eurozone activity surveys have been
• 12:16
  Speaker 4: surprising to the downside, but here they keep surprising to
• 12:19
  Speaker 4: the upside. America, I think most people will starting to
• 12:23
  Speaker 4: think that America is now at risk of finally seeing
• 12:26
  Speaker 4: a recession or a slowdown. That's just not really the
• 12:29
  Speaker 4: case here. So I think it's very hard to make
• 12:32
  Speaker 4: the case for the level of sheer misery that comes
• 12:37
  Speaker 4: out of the mouths of you know, Kirstam or Rachel
• 12:40
  Speaker 4: Reeves every time they're talking about the UK.
• 12:42
  Speaker 1: Yeah, well, I'll give you all that, but I would
• 12:46
  Speaker 1: still say that if we look at it from a
• 12:51
  Speaker 1: wider level, we live from a higher level. There's so
• 12:58
  Speaker 1: much wrong here. There's so much And when we're looking
• 13:01
  Speaker 1: at an economy where we say, oh, this is great
• 13:03
  Speaker 1: with you know, some bank or the other has had
• 13:05
  Speaker 1: an upgraded UK growth from zero point eight percent just
• 13:07
  Speaker 1: over one percent, woohoo, I.
• 13:09
  Speaker 2: Mean, this is awful. It's awful, And saying.
• 13:12
  Speaker 1: We're doing mildly better than the Eurozone, I mean, how
• 13:14
  Speaker 1: much lower could a bar get?
• 13:17
  Speaker 2: You know, you're still.
• 13:18
  Speaker 1: Looking somewhere with massive debt, with a public sector that's
• 13:22
  Speaker 1: absolutely out of control, with the tax system that is
• 13:24
  Speaker 1: beyond idiot and about to get worse, where you know,
• 13:27
  Speaker 1: making money is constantly punished. You know, we were talking
• 13:30
  Speaker 1: the other day when we were talking about this is
• 13:33
  Speaker 1: something we haven't released yet, but we were talking about
• 13:35
  Speaker 1: student loans et cetera, and about how much tax young
• 13:39
  Speaker 1: people end up paying.
• 13:40
  Speaker 2: And I was thinking about it again.
• 13:42
  Speaker 1: You know, if you are, if you're young in the UK,
• 13:45
  Speaker 1: to pay for this massive public sectrum for the priorities
• 13:48
  Speaker 1: of a small group of politicians, you enter work, you
• 13:52
  Speaker 1: paid twenty percent in income tax, eight percent in national insurance,
• 13:55
  Speaker 1: nine percent in student loans, three percent intension. What if
• 13:58
  Speaker 1: you get got left you luck enough to make it,
• 14:00
  Speaker 1: to be earning just over fifty pounds, you pay a
• 14:03
  Speaker 1: marginal rate of forty percent in tax, plus two percent
• 14:06
  Speaker 1: in penchion, nine percent in student Then you're paying over
• 14:10
  Speaker 1: half of your your money away.
• 14:12
  Speaker 2: What are you getting? What are you getting? How do how.
• 14:15
  Speaker 1: Do people coming into the labor market in the UK
• 14:19
  Speaker 1: when they see their paychecks and they see what they
• 14:21
  Speaker 1: get for that. I look at it and I think, well,
• 14:25
  Speaker 1: I take your point that things are not as bad
• 14:28
  Speaker 1: as as our new government tells us that they are.
• 14:30
  Speaker 2: Of course they're not that bad, but they're not very
• 14:33
  Speaker 2: good either.
• 14:34
  Speaker 1: And I can't see any sense of that bit getting better.
• 14:37
  Speaker 2: How do you grow an economy when you take.
• 14:39
  Speaker 1: Your young people, put them into work and then remove
• 14:42
  Speaker 1: almost all of their income immediately.
• 14:44
  Speaker 4: You've kind of kneeling the same problem in the way.
• 14:47
  Speaker 4: So it's it's an issue structural stuff, and to my mind,
• 14:53
  Speaker 4: the fact that the economy is actually no on the
• 14:57
  Speaker 4: on a recovery trio. Shoot me. In a government with
• 15:01
  Speaker 4: the right policies, we'd have the time to start addressing
• 15:05
  Speaker 4: some of these issues. And instead, what we're going to
• 15:08
  Speaker 4: get is a government with more of all of the
• 15:11
  Speaker 4: wrong policies, probably judging by the way they've talked so far,
• 15:15
  Speaker 4: basically expanding the public sector. I would expect punishing wealth
• 15:20
  Speaker 4: production more.
• 15:21
  Speaker 2: And expanding the reach of the public Chector.
• 15:24
  Speaker 1: I mean, I've seen you on Twitter getting really irritated
• 15:26
  Speaker 1: about oasis.
• 15:27
  Speaker 2: John Im.
• 15:28
  Speaker 1: I'm sorry about this for you, but you know you
• 15:30
  Speaker 1: said quite rightly, this is none of the government's business.
• 15:33
  Speaker 2: But out there is so much that a new government
• 15:37
  Speaker 2: should be focusing on.
• 15:38
  Speaker 1: I mean, the fundamentals here are terrible, and then you know,
• 15:41
  Speaker 1: you turn around and start trying to get involved in
• 15:43
  Speaker 1: the price of concert tickets. Enough already focus on the
• 15:46
  Speaker 1: big stuff.
• 15:47
  Speaker 4: Well, the frustrating thing as well is that we've just
• 15:49
  Speaker 4: come out fourteen years or call it, you know, to
• 15:53
  Speaker 4: call it fourteen is a bit much. We call it
• 15:55
  Speaker 4: eight years. It's because of the post Brexit government being
• 15:58
  Speaker 4: different years of ostensibly the most right wing UK government
• 16:03
  Speaker 4: ever and all of this crap happened on their watch
• 16:08
  Speaker 4: and it's just getting accelerated by the new guys. The
• 16:12
  Speaker 4: problem is there is nobody who stands for the sorts
• 16:15
  Speaker 4: of policies that would improve things structurally, and it feels
• 16:21
  Speaker 4: as if we need to get to some sort of well,
• 16:25
  Speaker 4: some sort of rock bottom, possibly akin to the end
• 16:28
  Speaker 4: of the nineteen seventies, you know, and Margaret Thatcher coming in,
• 16:32
  Speaker 4: where we get somebody who actually does decide we can't
• 16:35
  Speaker 4: go on in this particular direction, and the country decides
• 16:39
  Speaker 4: that we can't go in this particular direction. You can
• 16:41
  Speaker 4: see the frustration. I mean that was his tweet. Is
• 16:45
  Speaker 4: slightly depressingly. I think my most popular tweet, ever, and
• 16:49
  Speaker 4: there's clearly a lot of people who agree that why
• 16:51
  Speaker 4: on earth is the prime minister even given a minute's
• 16:55
  Speaker 4: thought to this. But we've got a while to go
• 16:57
  Speaker 4: before we get to change horses again, John.
• 17:01
  Speaker 2: Do you see what I did there?
• 17:02
  Speaker 1: Do you see how I managed to move you from
• 17:03
  Speaker 1: being a little bit optimistic to quite angry and pessimistic.
• 17:08
  Speaker 4: Yeah, it doesn't take much.
• 17:09
  Speaker 2: In four and a half minutes.
• 17:13
  Speaker 4: I'm easily So I'm going to use this more.
• 17:16
  Speaker 2: We might do a bonus podcast called Triggering John, where
• 17:19
  Speaker 2: I just say the words that I know really upset
• 17:21
  Speaker 2: you and see what happens. Speaking of being easily triggered.
• 17:28
  Speaker 4: Stock market, yes, yes, yes, the stock market, Well, we
• 17:33
  Speaker 4: had another we can market, panic, crash whatever you want
• 17:38
  Speaker 4: to call it, mainly in VideA. That's how you see
• 17:43
  Speaker 4: it in Vidia.
• 17:44
  Speaker 1: Oh I say, video, I say, And Okay, have I
• 17:48
  Speaker 1: been saying it wrong all this time?
• 17:50
  Speaker 2: All the way through one of the greatest bubbles of
• 17:51
  Speaker 2: all time, I've been saying it wrong.
• 17:54
  Speaker 4: It shows you how much we know abou take except.
• 17:56
  Speaker 2: For that it's too expensive.
• 17:58
  Speaker 4: Yes exactly, and that's all the battles, But actually it is. Yeah, Well, yeah,
• 18:03
  Speaker 4: as it turns out, so you're not end video in
• 18:06
  Speaker 4: a single trade, n Video fair by ten percent. And
• 18:09
  Speaker 4: when you actually look at a chart the Philadelphia Semiconductors Index,
• 18:14
  Speaker 4: which is basically all the chip stocks in the US,
• 18:17
  Speaker 4: about thirty of them, the thirty biggest ones, it's actually
• 18:20
  Speaker 4: now down about twenty percent from its peak, which came
• 18:23
  Speaker 4: a couple of months ago. And I think it's increasingly
• 18:28
  Speaker 4: fair to summarize that the EI bubble has popped, and
• 18:32
  Speaker 4: it's probably a jettery road down here from now, the
• 18:36
  Speaker 4: way that the dot com bubble popped.
• 18:38
  Speaker 1: Yeah, And it's important to remind people that bubbles pop
• 18:41
  Speaker 1: more slowly than you think. You know, it doesn't happen.
• 18:44
  Speaker 1: You don't even come off forty percent in a day.
• 18:47
  Speaker 1: It's a little more slow than you think. So I
• 18:49
  Speaker 1: think you're probably right that that bubble has ended. But
• 18:52
  Speaker 1: we'll see, I mean, more often wrong on this stuff, right.
• 18:54
  Speaker 1: But the important thing to remember is that a mini
• 18:57
  Speaker 1: bubble and a mini fall or mini even quite a
• 19:00
  Speaker 1: big collapse is not necessarily something that you should be
• 19:03
  Speaker 1: selling into. And I just want to give you a
• 19:07
  Speaker 1: couple of points from the latest Schroeder's Equity lens from
• 19:10
  Speaker 1: my nice friend Duncan Lamont, who points out that you
• 19:13
  Speaker 1: get ten percent falls quite often, they happen more years
• 19:16
  Speaker 1: than not, and it's not unusual to see a twenty
• 19:18
  Speaker 1: percent fall at once in every four years or so.
• 19:22
  Speaker 1: He's got a lovely chart on that, and he then
• 19:24
  Speaker 1: has another fascinating table that is very well worth looking
• 19:27
  Speaker 1: at that which shows you how if you give up
• 19:31
  Speaker 1: on the stock market after a big fall, and if
• 19:33
  Speaker 1: you get out before the big fall, well then you fantastic.
• 19:35
  Speaker 1: But if you try and get out as it falls
• 19:38
  Speaker 1: or after it has fallen, it can often be a horrible,
• 19:40
  Speaker 1: horrible mistake. So he's got a chart that shows what
• 19:44
  Speaker 1: happens if there's a nasty crash and then you either
• 19:47
  Speaker 1: stick with docks or you dash for cash and then
• 19:50
  Speaker 1: go back in later and all the way through. If
• 19:55
  Speaker 1: you stick with docks, the number of years to get
• 19:57
  Speaker 1: your losses back if you sell out never much more
• 20:00
  Speaker 1: than a couple of years.
• 20:01
  Speaker 2: Except for in nineteen twenty nine when it was fifteen years.
• 20:04
  Speaker 2: Very bad. But if you dash for cash it.
• 20:07
  Speaker 1: Can often go up into the six, seven, eight, nine,
• 20:11
  Speaker 1: ten years, thirty four years after nineteen twenty nine by
• 20:14
  Speaker 1: the way, and if you had sold out in twenty
• 20:17
  Speaker 1: eighty would still be underwater if you're.
• 20:18
  Speaker 2: Stayed in cash. So you know, in the end, it's
• 20:21
  Speaker 2: usually better to stay in than to get out, unless,
• 20:23
  Speaker 2: of course, you're very good at timing your ins and outs.
• 20:26
  Speaker 4: It's interesting, isn't it. I mean, I think those starts
• 20:29
  Speaker 4: are always really fascinating and reassuring. Yeah, and more than
• 20:34
  Speaker 4: an nels, they kind of make the case for Luke,
• 20:37
  Speaker 4: just have an idea of what you want to own
• 20:40
  Speaker 4: and put some money in it every month, and then
• 20:42
  Speaker 4: you're not buying at the top, you're not selling at
• 20:45
  Speaker 4: the bottom. You're just you know, because that's what life
• 20:48
  Speaker 4: is for most of us. Most of us don't stick
• 20:50
  Speaker 4: a lumps on in when we're twenty and then try
• 20:53
  Speaker 4: and manage it for the rest of our lives. You know.
• 20:55
  Speaker 4: I think that the regular rebalancing once a year, it
• 21:00
  Speaker 4: really does make the case for that sort of slow,
• 21:04
  Speaker 4: sensible investment style. And if you want to find me betcoin,
• 21:09
  Speaker 4: you can do that.
• 21:09
  Speaker 2: You know, want to said you still don't know any bitcoin?
• 21:12
  Speaker 2: Did John?
• 21:14
  Speaker 4: No, sadly not.
• 21:17
  Speaker 2: Hate mail send it in.
• 21:23
  Speaker 1: Thanks for listening to this week's Marin Pook's Money and
• 21:25
  Speaker 1: our thoughts on what's been happening.
• 21:26
  Speaker 2: Over the last week or so.
• 21:27
  Speaker 1: If you like us show, rate, review, and subscribe, Where
• 21:29
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• 21:31
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• 21:34
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• 21:35
  Speaker 2: John Underscosed Epic for John.
• 21:36
  Speaker 1: This episode was produced by some Saudi production support and
• 21:39
  Speaker 1: sound design by Moses and Question and comments on this
• 21:42
  Speaker 1: show and all our shows are always welcome. Our show
• 21:44
  Speaker 1: email is Merrin Money at Bloomberg dot net.