Economic Paradoxes Challenge Investors
Let’s start by talking about President Obama. By some estimates, 14 million jobs have been created during his term of office. To many people, it does not feel like enough.
The marketplace contradicts itself, and making sense of it demands close attention. A few savvy investors navigate these contradictions well, and they bear watching. For everyone else, it’s like trying to do a handstand on quicksand due to market volatility being able to drag a portfolio down at any moment.
You would think that an economy down to 4.9% unemployment after the recession of 2008 would be filled with investors slapping high-fives, so why the pessimism? One theory is that politics reflect the national mood, and the political arena is filled with presidential candidates lamenting the current U.S. situation.
Labor statistics show that 62.7% of adult Americans are working, but there is strong suspicion that many Americans (2.6 million by The Wall Street Journal’s estimate) have given up looking for work, and 2.1 million have been out of work for longer than six months.
But enough about the economy. Let’s look at Warren Buffet. What does he know that we don’t? A lot, apparently. He just invested heavily in an oil company.
Oil prices tanked recently as China and Europe applied the brakes, yet oil producers (OPEC, etc.) kept pumping away. Oil seems cursed as an investment option at the moment. So why, then, did Warren Buffett just buy another $1 billion stake in Phillips 66? Berkshire Hathaway now owns 14% of that company (over 73 million shares). Go figure.
Speaking of China, news has been surfacing suggesting that Chongqing Casin Enterprise Group is set to buy the Chicago Stock Exchange. While the exchange only accounts for 0.5 percent of U.S. trading, it is certainly an interesting development and ironic timing.
Also in news from China, the largest ship ever to visit a U.S. port — the Shanghai-built Benjamin Franklin, able to carry a staggering 18,000 containers — is headed for Los Angeles. Furthermore, over 100 such behemoths have either been built or are on order. Does that sound like an anemic world economy? Hardly.
We will just have to wait and see how robust our global economy is as all these changes work their way through. Stay tuned. If you do invest during these troubled times, why not take your cues from the most successful investors, the ones with the best track records? With Peeptrade, you can.
Originally published at Peeptrade.com