Alan Steel
01506 842365
MENU
  • Home
  • About Us
    • Close
    • About Us
    • What We Do
      • Close
      • What We Do
      • Our Services
      • Our Philosophy
      • Our Awards
      • Our Reputation
    • Who We Are
      • Close
      • Who We Are
      • Meet the team
    • Our Approach
    • Financial Planning
  • Testimonials
  • Investments
    • Close
    • Investments
    • Investment Advice
    • Portfolio Building
  • Pensions
    • Close
    • Pensions
    • Retirement Planning
    • Early Retirement
    • Pensions as simple as...
  • Tax
    • Close
    • Tax
    • Tax Advice
    • Tax Planning
    • When I'm Dead and Gone
    • Inheritance Tax
    • HMRC Digital Accounts
  • Insights & Media
    • Close
    • Insights & Media
    • Letters from Linlithgow
    • Informing You
    • Letter from America
    • See us in the Press
    • Master Investor
    • Points of Few
  • Contact Us
Independent financial advisers founded in 1975
Over £1.4 billion client funds under management
17 industry awards for advice since 1989

By Mike Williams, Genesis Managing Partner

Founder and Managing Partner of Genesis Asset Management, New York

Letter from America

Good Companies Use Debacles to Get Better at Everything

By Mike Williams | Wednesday, 03 June, 2020

Short-term headline addicts will see the endless commentary on the disruption happening throughout the world as negative and scary.

Long-term investors should see it as bringing long-term advantages, opportunities, and significant wealth.

You get to choose your perspective.

As bad as this shutdown has been – the self-inflicted economic damage, unrest, and screams for change - we will look back on this from far higher levels than we can ever imagine today.

From my seat in Chicago I can tell you history shows us that in the heat of the battle and fear, the harder you punch America and kick her when she’s down the stronger she comes back.

For many years now we’ve been saying Generation Y and the tsunami of technology and science heading our way will take the reigns of the New Economy.

And the movement of the manufacturing production to support its development back to America’s shores in beginning in earnest:

As a theme, expect this beginning trickle of change to be a tsunami in 2-5 years as the baton passes to the New Economy ahead.

More Good Stuff

Left out of last week's terrible headlines, US homeowners are feeling less stress as the world slowly opens back up.

The latest housing data shows massive upside surprises for closings, while also revealing a new multi-decade low in supply.

Even with the cloud of the shutdown, we are now nearing roughly 60 days of market supply of new homes.

The phrase "Spring-loaded" comes to mind from the above.

As for the homeowners?

Well, it seems they’re feeling better too:

There are also good signs of thawing in other consumer areas not often covered by the media.

Let's take a look:

The good news here is the market is sniffing out improvement.

What many won’t remember from the 2008-2009 Great Recession is that companies used that debacle to get better…at almost everything.

That process is unfolding again.

We fully expect that by the time we get to a somewhat more new normal view of the future in 2021 and beyond, we’ll see productivity massively increase, falling costs to address more on-shoring, and efficiencies birthed by the disaster itself.

This will lead to higher margins, surprisingly non-inflationary pressures, and entirely new ways to accomplish more for all of our collective lives.

Something to consider...and it relates back to something Warren Buffett stated years ago:

If rates are near zero for far longer than almost anyone anticipates at this time, if a 10-year bond is prices at 140+ times earnings, if bank accounts and money markets earn anything...what is a fair price for a growing equity stream?

So, I can feel 'secure' with a bond for which I pay 140 times earnings, or I can buy boring old Proctor and Gamble for 22 times earnings…

Hmmmm…

Underpinning that point: Amazon just sold $10 BILLION in 3-year notes for a cost of just 40 basis points.

0.40%!!!

Change is everywhere my friends.

Don't let wild movements terrify you.

©2023 Alan Steel Asset Management Limited is authorised & regulated by The Financial Conduct Authority. Please note that the Financial Conduct Authority does not regulate some forms of tax advice. Company Registration: SC58014

You should remember that the value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.

The investment services and/or investments referred to in this website may not be suitable for you. If you are unsure we suggest you contact us to discuss matters further. If we believe our services are not right for you we will tell you.

When investing money, whether for income or growth, you are placing your capital at risk as the value of investments may vary, so you could get back less than you started with.

The Financial Conduct Authority does not regulate Tax Advice, Trusts or wills. Alan Steel Asset Management Limited is authorised and regulated by the Financial Conduct Authority. The guidance contained in this website is subject to the regulatory regime of the UK.

The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients.

FOS details can be found at www.financial-ombudsman.org.uk

Alan Steel Asset Management Limited are not responsible for the content of external sites.

  • Cookie Policy
  • Privacy Policy
  • Website terms and conditions
  • Tax Services Privacy Notice
  • Contact Us

This site uses cookies. By using this site you agree to the use of cookies. Read our Cookie Policy