Mungofitch was a poster on the Motley Fool for years and years, possibly dating back to Fool .1, dunno. He hasn’t been on these boards since the software change to 2.0 but has taken up residence at Shrewdm.com on the Berkshire board there. He is often referenced here and there for his insights into Berkshire (in particular) and other stocks, for his bottom and top detectors, and for being a presence on the Mechanical Investing boards as well.
While he’s lived overseas for some time, as he announced yesterday, he’s out - of the US as an investment haven, and I thought I would alert the board to his announcement, and to his reasoning.
Since I have often posted sundry trades I've done, I thought I'd pass this along.
I’m divesting from the US. I’ve already sold all my T-bills and sold (so far) 96% of my US stock positions including everything in my quant portfolio. I’ve converted the existing US cash to other currencies, and will convert the rest after trades settle
I am logged in but cannot see his posts. This happens often when I am there and don;t know what’s causing it. What I see is
First link: … you faintly hear murmuring in the distance, yet it is hardly comprehensible …
Afterwards is a multi post discussion but no Mungo original
Second link: Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) You hear strange sounds, but they are completely unrecognizable..
I cannot say he’s wrong because nobody can actually know these things. I can see getting out of the stock market now wouldn’t be over-reacting. I can’t tell how long or how low the end is from here. But the zeroing out of the US as an investable market is too extreme. If we go down so does everybody else. Even stock piling food and ammo is a loser because it will just prolong the end.
I agree, but Mungo is a wealthy Canadian ex-pat living in Monaco. He mentions that he is avoiding a possible 1% tail risk of losing funds in the US through tax changes and such. It is not general ‘investing advice’.
Yes. One only needs to get rich once if one is careful thereafter. He has a patent on some GPS technology (and asked not to be blamed for any of its problems).
MILAN (Reuters) - Allocation to US stocks saw the biggest drop ever in March with concerns over stagflation, trade wars and the end of US exceptionalism driving a “bull crash” in sentiment, a survey of investors from BofA Global Research showed.
A couple of weeks ago, I moved everything in my employer retirement accounts out of the US and into Europe.
The only US exposure in any account I have left is a decent sized position in JEPI because the yield remains attractive even though it has lost 10%.
I have ridden many markets down - I lost 40% twice in the last five years by remaining fully and aggressively invested - but in both of those situations, I was never as confident that there was as little upside as there is today.
This is the largest divergence I can recall in quite some time. EAFE gained all of 3.8% last year when we were up 25%. We are getting close to EAFE having a better YOY performance (10% vs 12%).
If you read his subsequent posts, the reason is political. He’s a Canadian living in Monaco and he cannot condone the current administration in good conscience so he’s taking his money out. That’s the reason, nothing else.
People with clay feet fall….don’t put anyone on a pedestal as far as being better at investing than anyone else, or having inside information.
Educate yourself, know your limitations and learn from experience whether by doing your own investing or having someone else do it for you.
Good question, and part of the answer depends upon your time frame. Long-term, I have yet to see anything to change European sclerosis. Intermediate term, they are juicing up deficit spending which will boost their stock markets.
Mario Draghi recently put out a report on EU competitiveness, making the case that growth and competitiveness are fading in Europe.
For example, he writes “there is no EU company with a market capitalisation over EUR 100 billion that has been set up from scratch in the last fifty years, while all six US companies with a valuation above EUR 1 trillion have been created in this period.”
The largely unspoken trade-off involved in membership of the European Union is that democracy and national sovereignty are sacrificed in return for economic prosperity. Member states give up much of their control over critical policy areas to an unelected, technocratic elite who are entrusted with delivering higher living standards and productivity. But Brussels is not keeping its part of the bargain – and hasn’t for some time…
Draghi’s bleak assessment actually underestimates the scale of the EU’s economic malaise. Looking at averages across the 27-member bloc obscures the depths of the crisis. Astonishingly, the economies of Italy, Spain and Greece, having been battered by the Euro crisis and EU-mandated austerity, are actually smaller than they were in the late 2000s…
So, what is to be done? According to Draghi, nothing less than a fundamental rethink in how Brussels approaches investment, trade policy and business regulation will dig Europe out of its hole…If, as Draghi believes, the choice facing Europe is radical change or ‘slow agony’, then slow agony is what Europe will get.
First of all America cannot go broke. Yes, US has budget deficit. But, it also has one of the lowest income taxes on wealthiest corporations. if you look at Apple, Google, MSFT, META taxes paid on the last 10 years, vs what they have spend on buying back their shares, and on acquisitions, it will be revealing. US has claim on those earnings, don’t forget that. Secondly, US can print as many $$$ as it wants and can service the debt.
So the notion that US will go broke is wrong. They can dilute the purchasing power of USD.
