Why the bulls are wrong

Equity markets have bounced well over 20% since the lows just over a month ago, so technically we are already back in a new bull market. With peak new cases now behind us in Australia, business is agitating to reopen and governments are starting to ease restrictions. With the biggest fiscal programs since WW2 and huge monetary stimulus in the pipes, are the bulls about to be proven spectacularly right? No. Not even close, according to Jerome Lander who manages the Lucerne Alternative Investments Fund.

In this 25-minute outdoor video interview, Jerome first set the stage by giving three reasons the bulls are wrong before then saying the bottom for the market could be more than 40% below where it is now:

"... it's very easy to come up with figures around, 1600 or 1800 on the S&P 500. Obviously we're up at 2800 on the S&P at the moment".
Citing the risks of ongoing virus infestations, credit defaults, geopolitical risks, poor consumption and investment spending going forward, he paints a picture of a future that is vastly different from the past.

In this new paradigm, he argues, investors face the very real prospect of long-term asset price deflation as fundamentals reassert themselves, and that in this environment investors will require a completely different approach to the one that has worked for the last 40 years.

Discussion points through the interview

- Three reasons the bulls are wrong
- What could drive the bear market and how low it could go
- What the most imminent risks are, including conflict
- What 'the new normal' might look like
- The biggest mistakes most investors are making
- The lens investors should now view the market through
- Investment styles that reduce market risk
- A message for all anxious investors out there

[Livewiremarkets]

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[tonycoz]

Finally someone who speaks sense and doesn't spruik. A breath of fresh air.

[jlepp]

Those kids sound like they are having way too much fun, haven’t they heard the latest unemployment numbers .?

[krissolimmo]

This guy makes more sense than all those other tossers crapping on about a V shaped recovery. Very moderated opinion. The problem is politicians don't like reasonable people.

[keithbrandson]

Love this guest. Very plainspoken and well-researched. Information PACKED.  My bottom line and takeaway(s) - we are in a different world that has much more debt and risks; any previous historical valuation paradigms are fundamentally and fatally flawed.

[petrturcovsky]

I have to agree, you can not stop listening to Jerome it make sense. Thank you and more of those. Subscribed!

[pepleatherlab]

Total population of Australia: 25 million. Total unemployed in the USA: 23 Million. Perspective.

[joncandyfliprecords]

26:00 "More skill based returns..."
Yessir.
As soon as I can free up my currently 85% in-cash company Super fund, it's all going this guy's way. 👍🙏

[CM-cyqo]

took a full 20 minutes for this guy to get to his breakthrough idea that money printing continues and precious metals are a hedge in a portfolio. Nothing new, painful to watch.

[austintaylor]

So basically invest all your money is precious metals? umm ok.

[FrizzelFry]

A traditional 60/40 portfolio did very well through this down turn. You need to think very carefully about switching from that to a long/short strategy. With a long/short strategy you put your thrust on the manager of the fund and are basically betting on the managers skills compared to others. That part about adding some gold makes sense, think of it like and insurance of things are not going to turn out well.

[vancouveride]

How will companies go broke if they can sell bonds at low interest rates provided by central banks buying corporate bonds?

[phalyoutube]

He never said buy only precious metals. He said invest in companies individually not in an index i.e. active not passive investing and have more than the standard 0.5-2.0% precious metals.

[funksoul]

If the value of every company dropped by 1/2 I'm sure gold won't be keeping its value.
Gold and precious metals don't actually pay you anything. Equities and property trusts generally pay a dividend plus the possibility for a capital gain down the line.
Holding gold and hoping it's going to go up, and getting nothing while you wait seems foolish.

[unemployedrocketsurgeon]

I think we’re heading for a bathtub shaped recovery.

[johnaashmore]

the Fed has postponed this with the printing and borrowing of so much paper money. "Don't bet against the fed", so perhaps today with tightening and dumping it's balance sheet you will finally be right (6/4/2022 US date today)

[johnbrooke]

Good call. Hope you still have a job mate!!!!

[jadepenn]

Great talk. I hope he isn't right about the long term outlook with economic restructuring... He seems like quite a risk adverse person when talking about all the potential perils in modern day economy. However I would counter that economies have been through this before and have over time, come right and expanded. Wars, plagues, debt etc. So what makes the long term outlook worse this time?

[jeromelander]

does this make sense to you? what do you think? cause to me iit doesnt this my dad talking

[dutchmaster]

Record job losses in April

Best month of gains for DOW since the 80s