Sovereign Debt Binge

A debt laiden economy(3)

Were you aware that private and public debt greater than what it was in 2008? Does it alarm you?  Who Cares? We are selling hope here.

In reality, the debt binge works for countries. They are selling hope to their people – just saying that the debt levels will resolve but not saying how.

But if it doesn’t work there is no way out. They aren’t planning for this.

You see hope is critical for the consumer. If the consumer loses hope then its over eg like Spain did with its mass exodus of people looking for a better life.

But even if it doesn’t work they aren’t scared of borrowing. If one country goes broke then all go broke ipso facto no problem – so who cares!

Focusing on Tourism is escapism – and is simply not doing enough.  Where reliance is too heavy it brings laziness and a lack of effort to create productive industry. Consider Greece versus Vietnam which established a manufacturing base as well as in tourism. Whereas Greece established…. beaches?

Be warned fellow Australians – we are NOT immune. Out debt levels are better than most but we will suffer.

What do we do?

At pivotal times knowing when to sell is invaluable.  We follow the changes in our Pythagoras Investment Timing Indexes. They offer a mathematical understanding of the stock market through volatility, which show that price sensitive events are predictable from changes in Volatility (i.e. in advance of price moves). These changes lead to buy/sell recommendations.

We recommend a sell when the market/stock is at risk of going down, or no-where. At these times we recommend investing in cash, and await the buying opportunity. When the market/stock is less risky, and it’s going to go up, we reinvest to profit.

Conclusion: The key to making money is selling.

The key to making money in any market is selling before any negative event. Pythagoras generates the sells before the events with share price effects – its proactive not reactive.

Investors know it’s rare for all stocks to go down all the time, all at once. Even in a bear market there are upward moves to profit from – if you have the right Buy/Sell recommendations.

Therefore Pythagoras can make money in any market regardless of the investment environment – in fact its best in the tough markets.   We worry less about the events and their timing and focus on Volatility changes. At Pythagoras we follow changes in volatility which precede the events. This places us at the forefront of investing.


Disclaimer: The information in this document (“Information”) is not intended to constitute advice.  It is for general information only and does not take into account your individual objectives, financial situation or needs.  You should assess whether the information is appropriate for you and seek professional financial advice before relying on or making investment decisions based on the Information.  Investment products are subject to risk including the loss of income or capital invested.  Past performance is not an indicator of future performance.  Neither Pythagoras Investment Timing Index Pty Ltd ACN 147371113 (AFSL 431 238), its directors, employees and representatives (collectively, “Pythagoras”) warrant the accuracy or completeness of the Information. To the extent permitted by law,  Pythagoras disclaims all responsibility and liability for any loss or damage of any nature whatsoever which may be suffered by any person directly or indirectly