Don't Have Money in the Market You Might Need
04 October 2021
At Patrimonia last week, I kept telling everyone who came by our booth that the current level of the Shiller PE (38) had only been exceeded twice since 1880: in 1929 and at the dawn of the crash in 2000.
I was wrong!
Robert Shiller, himself (!), corrected me in an opinion piece that the New York Times published on Saturday: the 1929 level is now exceeded.
Knowing that after reaching these record levels, stocks lost 66% after 1929 and 40% after 2000, it seems important to me to raise the alarm.
Especially since on Friday night, this is what the Motley Fool (#1er stock market site for individual investors in the US) said:
« Don't have money in the market that you might need in the next 3 years ».
Wow! After the worst month in the markets since the pandemic (SP500 -5% in September), instead of saying as usual that it's time to buy back, the Motley Fool says to take cover.
It's rare that these two agree. Maybe they're afraid of the same thing: the third-quarter resultsnd that will start in three weeks. Because there, instead of comparing to the quarter most impacted by the pandemic (2020 Q2), it will be against the quarter when everything reopened. So the companies that were posting +50% sales last quarter will be posting +5% this time. And that's not in the prices.
Great week!
Maximilien
*Shiller's PE: price of a share / 10-year average of net earnings per share
Disclaimer
This presentation is a promotional document. The content of this document is communicated by and is the property of Monocle Asset Management. Monocle Asset Management is a portfolio management company approved by the Autorité des Marchés Financiers under number GP-20000040 and registered with the ORIAS as an insurance broker under number 10058146. No information contained in this document should be construed as having any contractual value. This document is produced for information purposes only. The prospects mentioned are subject to change and do not constitute a commitment or a guarantee. Access to the products and services presented here may be subject to restrictions for certain persons or countries. Tax treatment depends on individual circumstances. The fund mentioned in this document (Monocle Fund SICAV) is authorized for marketing in France and possibly in other countries where the law permits. Before making any investment, it is advisable to check whether the investor is legally entitled to subscribe to the fund. The risks, costs and recommended investment period of the funds presented are described in the KIDD (key investor information documents) and the prospectus, available free of charge from Monocle Asset Management and on the website. The KIDD must be given to the subscribers before the subscription. Past performances are not a reliable indicator of future performances. Monocle Asset Management cannot be held responsible for any decision taken or not taken on the basis of information contained in this document, nor for the use that could be made by a third party. The investor may lose all or part of the amount of capital invested, as the funds are not capital guaranteed.
To unsubscribe or for any information request, you can email us at monocle@monocle.lu
