People seem all sorts of crazy right now.
Is this peak-fear right now?
Fear matters because as the saying goes, it’s the perfect time to buy. “Be greedy when others are fearful.”
That’s the quote. I think it was Warren Buffett or Yoda or one of those guys.
And that’s the thing about the market cycles. You never know when you’re at a turning point. It seems obvious with the benefit of hindsight, but in the moment, it’s very hard to know where you’re at.
And so I’m going to put it out there. I think this might be peak-fear right now.
This might be as bad as it gets.
Because look at the confidence data. It’s atrocious!
Consumer confidence is at a record low right now. It’s as bad as it was in March 2020 – back when we thought we’d be burying our loved ones in unmarked mass graves.
But that didn’t happen. And it’s not going to happen. Society is not about to collapse.
But if you actually ask Aussie households, which is what Roy Morgan have done – then you get a pretty bleak picture.
And its finances that are the biggest worry. The question around, how do you feel about your future financial conditions has collapsed in a massive way:
How does that make any sense?
I mean, sure, we’ve got inflation. That’s the first time we’ve seen that in a generation.
And household budgets are getting squeezed. The price of non-discretionary inflation is way higher than discretionary, which means that there’s just no way of getting around it.
And it’s front and centre in peoples’ minds. Google searches for ‘inflation’ have sky-rocketed.
And look, sure, inflation puts pressure on your finances. Totally. But it’s not going to be that bad for that long.
I think people have seen the price of lettuces go up, and then they’ve assumed that they’re just going to keep going up.
(News flash: the price of lettuces has mostly returned to normal.)
But this is the mistake that I think people are making. They’ve seen prices lift – some for the first time in their life time – and they think we’re on some sort of exponential curve and that we’ll be paying $47 for lettuces by year’s end.
We won’t.
And we’re not going to end up like some of those countries that are doing it massively tough right now. Like Sri Lanka. They’re having a terrible time of it.
But the Sri Lankan economy is not the Australian economy. We have very different debt profiles.
The Aussie economy does not stand at the brink of collapse. Not even close.
Which is why I think we’re possible at peak-fear right now.
Sooner or later, people are going to wake up and realise that things aren’t as bad as they feared.
And actually, they’re ok.
So the question then is, if its peak fear now, what kind of deals are you cooking up?
JG.
Sahad says
We are born with the intelligence and wisdom to decide what is right and wrong, and we see those who feel wrong as fools.