The fall of the SVB and the eviction of the market Credit Suisse have caused stock market jitters. The headlines of the press have not reached the moment of panic, which usually coincides with the best time to buy.
After a brilliant start to the year, it is totally logical that given the minimum danger sign close positions and the money takes refuge. The simple noise of financial crisis cocks our brains, even if it has nothing to do with Lehman. The subprime crisis It was packaging shit as a quality product and extending its marketing throughout the system, and in this crisis the money that leaves one entity ends up strengthening another, because I don’t think savers put their savings under a mattress.
The reconstruction of the stock markets, which in the case of the European one should return us to the highs prior to Lehman, finds a new ballast to fall back on skepticism. It is on these occasions, when the bassists take the reins, when you have to cross yourself fullerton letter and strengthen the conviction that falls are almost always opportunities (Courage! We have been here before).
The Fullerton Letter is called a famous speech by the former president of Capital Group, in which he recalled that “on April 11, 1942, the Wall Street Journal pointed out among the factors that are discouraging investors the growing failures of the United Nations; the new German offensive on Libya; doubts about Russia’s ability to resist when the Germans prepare for a frontal attack; the delicate situation of maritime transport; and the fact that Washington is again considering the possibility of resorting to more drastic rationing, with price fixing, or a new tax increase in order to reduce inflation.
And yet, on April 28, 1942, in such a pessimistic context, in the midst of a war that we were losing, with excessive taxes on profits and price and wage controls, shortages of gasoline, rubber and other basic materialsand when everyone was convinced that, once the war was over, we would have to face a post-war depression, the market trend changed”. The S&P rose 70% in just one year. What was it that caused the market trend change?Simply a return to reality.
The slow but growing recognition that, despite all the bad news, despite the bleak prospects, companies that are well-managed and well-financed will thrive. “The reality was that these companies they were worth much more than their listings indicated. The Dow Jones is not reality. Price/earnings ratios and technical market studies are not true either. Quote codes are not the real world. In the real world, companies create wealth. Actions are not, they are just representations of reality.”
