Perry is a successful global investor that has helped clients understand and navigate through the primary market trends for decades. He is the former CEO and CIO of BME Investment Partners and the former COO and CIO of Invesco Global Strategies. Read more....
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I started mentoring both senior and junior leadership talent a number of years ago; and I have to say it has been one of the most personally and professionally rewarding experiences in my business career. If we will take just one person at a time and invest in them, it is amazing the number of lives we can impact throughout our career.
In my mind, even if the Euro fails, the dominance of Germany and the other German speaking nations is not going to end, nor is their desire to expand geographically. Given that Europe imports 54.1% of its oil consumption, the events related to the Arab Spring and the growing extremism in the region are pulling the western world back into the region. The US pulling out of Afghanistan and Iraq only serves to create added fear and angst about the stability of the region. My sense is that European nations are going to be quickly drawn to the region to reestablish political and military ties.
If the countries vote and move toward fiscal and political union, the Euro can survive. But it requires sovereign governments to give up their individual rights. It is doubtful that Germany and many others are truly willing to move fully in this direction, especially, since the economic divergences are going to continue to widen. Germany in my estimation is not going to trade away their economic might or political freedom.
In 1998, I wrote an article at Invesco that stated the Euro would fail. At that time, the statement seemed bold and certainly out of the mainstream. Even in 2007 these statements seemed a bit far fetched. Today, however, it is main stream to think the Euro experiment will unravel. In March of 2012, I think it was Soros who predicted that the currency union had three months to get its act together, or the union would fold. Today, I would like to take a few steps back and review why I thought the Union was doomed. Then in my next blog, I will take a few steps into the future and answer the question can the Euro Survive?
So what is an investor to do? Near-term, with unemployment falling in the US and the housing market improving, growth should accelerate toward 3.0% by the end of 2013. Also, the Chinese economy appears to be rebounding as well. Infrastructure spending is accelerating, manufacturing PMI’s are rising, and broad money and bank loans have all strengthened. Given an improving cyclical backdrop, use any near-term pull-back in equities to increase your exposure. We fully expect the S&P 500 to reach 1600 before the current cyclical bull market ends.
Perry Johnson