Presentation is loading. Please wait.

Presentation is loading. Please wait.

Conquer the greatest money migration in history Keith Fitz-Gerald, Chief Investment Strategist MoneyMorning.com.

Similar presentations


Presentation on theme: "Conquer the greatest money migration in history Keith Fitz-Gerald, Chief Investment Strategist MoneyMorning.com."— Presentation transcript:

1 Conquer the greatest money migration in history Keith Fitz-Gerald, Chief Investment Strategist MoneyMorning.com

2 All investments have inherent risks. Past performance does not guarantee future results. All investments are undertaken at your own risk. Recommendations are subject to change at any time. No representation is being made that any account will, or is likely to achieve profits or losses similar to those discussed in this presentation. The risk of loss in online trading of stocks, options, futures, forex, foreign equities, and bonds can be substantial. Options are not suitable for all investors. For more information read the "Characteristics and Risks of Standardized Options". For a copy, call or click here. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.click here

3 Should you listen to anything I have to say ?

4 Copyright 2011 – All Rights Reserved

5 Ive been trading & travelling for 20+ years

6 And I have never seen as much opportunity as I see now Image: Adapted from Inc.com

7 There is a $300 trillion recovery building that almost nobody sees coming…

8 What to do with your money is perhaps the most challenging question of all How much? Where? When? What about cash? Stocks, bonds, gold? Income? International holdings? Image: Matt Collins, Scientific American

9 I recognize that many of you want to go straight to the secret sauce… Sweet Love Sauce: Amazon.com

10 Thats great… but without context the results are meaningless

11 So lets step back a minute and examine the broader scheme of things… …then well know what to do

12 Money is like water… if it is flowing out of one part of the world, that means its flowing into another

13 Most people understand this instinctively on some level but I find that few have thought about what it really means for your money

14 Lets take a look

15 North American countries account for 47.88% ($11.3 trillion) of global economic leaders Adapted from CNN.com interactive graphic

16 Asian countries account for 25.00% ($5.9 trillion) of global economic leaders Adapted from CNN.com interactive graphic

17 European countries account for 24.57% ($5.8 trillion) of global economic leaders Adapted from CNN.com interactive graphic

18 North American countries account for 39.51% ($16.2 trillion) of global economic leaders (…a 17.48% decline from 2000) Adapted from CNN.com interactive graphic

19 Asian countries account for 30.73% ($12.6 trillion) of global economic leaders (…a 5.73% increase from 2000) Adapted from CNN.com interactive graphic

20 European countries account for 24.87% ($10.2 trillion) of global economic leaders (…a 0.30% increase from 2000) Adapted from CNN.com interactive graphic

21 Asian countries account for 39.6% ($21.4 trillion) of global economic leaders (…a 28.86% increase from 2010) Adapted from CNN.com interactive graphic

22 North American countries account for 33.33% ($18 trillion) of global economic leaders (…a 15.71% decrease from 2010) Adapted from CNN.com interactive graphic

23 European countries account for 21.85% ($11.8 trillion) of global economic leaders (…a 12.14% decrease from 2010) Adapted from CNN.com interactive graphic

24 When viewed through growth the shift is even more apparent

25 Adapted from CNN.com interactive graphic

26

27

28 GDP Growth – 2000~2015 Its worth noting… despite$14.85 trillion in guarantees and stimulus the U.S. doesnt even make the list Its worth noting… despite$14.85 trillion in guarantees and stimulus the U.S. doesnt even make the list

29 Heres another way to look at it… Asias share is growing** Oil exporters US, OCADC countries, & rest of the world is shrinking Its also worth noting… That our own zero-interest-rate-policy, TARP and QE2 makes this worse Its also worth noting… That our own zero-interest-rate-policy, TARP and QE2 makes this worse **Asia has attracted $2.3 billion a day since April DBS Group Holdings

30 China United States India Japan Brazil Russia U.K. Germany France Italy Adapted from original by Joe Swainson/VisualizingEconomics.com

31 It doesnt matter if you prefer pie charts…

32 Or simple line charts… As recently as 2005, only 27 Fortune 500 Companies were based in BRIC countries. That number today – a mere five years later – is 67.

33 The conclusion is the same…

34 Money is leaving the developed economies & nanny states… …and flowing into the emerging markets

35 Despite overwhelming evidence, people dismiss whats happening…

36 Thats a costly mistake Because the risks have never been higher when it comes to our money

37

38 Many people are understandably frightened by the changes taking place…

39 Yet history shows that

40 The trick is knowing what to look for

41

42 Half the Worlds GDP In 2009, 55% of the worlds GDP is concentrated in just 3: EU, USA, PRC

43 And Half the World Is Catching Up The biggest spending gap in recorded history Source: McKinnsey & Co. IMF

44 Top 5 Exchanges (Capital Raised) 2008 Source: Ernst & Young

45 Top 5 Exchanges (Capital Raised) 2009 Source: Ernst & Young

46 Top 5 Exchanges (Capital Raised) 2010 Source: Ernst & Young

47 Looking at it another way Source: Ernst & Young

48 Top 10 Global IPOs (YTD as of March 18, 2011) Source: ipo-book.com Renren, Inc. IPO $854.9 million May 4, 2011 Renren, Inc. IPO $854.9 million May 4, 2011

49 U.S. listed Chinese IPOs May 4, 2011 Renren, Inc. (NYSE: RENN), a China-based a social networking provider raised $854.9 million in its IPO making it the largest Chinese IPO since : a record 22 Chinese companies listed on NYSE Since the beginning of 2010, Chinese high technology companies have raised $1.7 billion in the US IPO market for 30% of all activity YTD: eight Chinese companies have listed in the United States raising $1.5 billion …more than triple the activity over the same time period in Since 2006, Asian issuers, particularly China and Hong Kong, raised the most IPO capital on record, making up almost 65% of global proceeds (US$183.9 billion, 789 deals). Source: Ernst & Young, Thomson Reuters & NYSE.com

50 SALES$8,869 BILLION7% PROFITS$576 BILLION105% ASSETS$36,501 BILLION23% MARKET VALUE$10,215 BILLION16% BIGGEST COMPANY PETROCHINA Asia by the numbers Source: Forbes – The Global 2000 (2011)

51 Asia Is The Billionaire Factory Total number of billionaires in Asia in Total number of billionaires in Asia in Source: Forbes – The Global 2000 (2011)

52 Many people think that somehow things will go back to the way they were… …they will …but its not what they expect

53 Source: Visualizing Economics; Angus Maddison, University of Groningen

54 Copyright 2009 – All Rights Reserved Most to gain Most to lose

55 While were on the subject of China, this next chart takes many people by surprise…

56 China has had the worlds largest economy for 18 of the last 20 centuries China has had the worlds largest economy for 18 of the last 20 centuries

57 China United States Western Europe Japans Lost Decade begins U.S. real estate bubble Dot.bomb The point: Chinas just coming back up to speed…

58 Chinas growth is not an aberration not going away not stopping

59 Whether or not we like it is immaterial… …get over it or get left behind

60 China will affect every asset class and every investment choice on the planet for the next 100 years… …it is the single largest opportunity we will see in our lifetimes

61 And the best part…

62 You dont have to invest there to profit… …But you do have to know how this money shift will play out in world markets

63 Lets break it down to brass tacks

64 Emerging markets had less debt going into this crisis and will have less debt coming out Less inflationary pressure and greater strength Debt Sell Buy

65 Geopolitical influence Recent events show the US is outmatched, isolated and increasingly irrelevant. Expect Europe to show renewed strength not as the EU but as individual nations doing business with China and with Asia. US fails to recognize that even though we are uncomfortable with Chinas rise, increasing number of nations are okay with it Sell Buy Most investors have only 6% overseas Data suggests 40% may be more appropriate U.S. only choices – they underperform

66 Currencies $202 trillion in unfunded liabilities signal weaker U.S. Dollar Short term tactical rise in USD is temporary risk off trade End of the Euro? Expect Chinese Yuan in trading pairs within a decade Sell Buy Asian currencies, Swiss Franc Euro, U.S. Dollar

67 Purchasing power shifting from West to East Will haunt badly scared US consumer for generation or more Emerging markets consumers will take up the mantel Sell Buy

68 Manufacturing in most countries is expanding but PIGSs risk contraction, Japan risks failure

69 Glocal branding means bigger cash flow 40% of S&P 500 already drive earnings from overseas Weaker dollar helps em earn more money Buy

70 Oil Emerging market demand will push price higher Falling western demand a fallacy Alternative energy remains wishful thinking $100 a barrel or more Buy

71 Resources & Commodities Gold $2500 an oz or more Chinese view these as alternative currencies because they preserve value Bid up so have to step carefully Buy

72 This all boils down to one key thought …

73 Declining Growing Follow the money… Share of worldwide capital

74 Recapping Asia will become largest driving force in world trade Led by China, it will become single biggest market and influence in global trading for the next 100 years 40% of the S&P 500 earnings already come from outside the U.S. Western Economies are falling by the wayside Aging population Very high Debt to GDP ratios severely hamper GDP growth Private growth reduced by higher taxation and larger public sector spending Even though people are paralyzed by high unemployment, low inflation, and a housing market that may not come back for a decade, your money doesnt have to be.

75 Some choices to get started… The risk of loss in online trading of stocks, options, futures, forex, foreign equities, and bonds can be substantial. Options are not suitable for all investors. For more information read the "Characteristics and Risks of Standardized Options". For a copy, call or click here. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.click here

76 Chinese RMB Worlds new reserve currency? Global swaps are enabling this even as western banks dont yet see it coming and major currency pairs have not priced it in…yet 2-10 year horizon EverBank Deposits WisdomTree Dreyfus Chinese Yuan (CYB) MarketVectors RMB/USD (CNY)

77 US Dollar Risk off make this a nimble traders play EU debt crisis Commodities play implied 3-6 month horizon PowerShares DB USD Index Bullish (UUP)

78 Japanese Yen Makes Greece look good Experienced mis-managers The trade of the century 2-10 year horizon More this afternoon

79 Thank you! Friday 1100Conquer the Greatest Money Migration 1615Making the Currency Trade of the Decade Count Saturday 1630The best places to hide from the falling dollar


Download ppt "Conquer the greatest money migration in history Keith Fitz-Gerald, Chief Investment Strategist MoneyMorning.com."

Similar presentations


Ads by Google