The classic investor bets on stocks growth, while Warren Buffett bets on safety. Who is right?

Welcome to the Newsletter: Insight into Finance, Investments, and Precious Metals

In these uncertain times, it's crucial to stay cautious and proactive in managing your wealth. Protecting your assets in the coming period is key. Together, through news and more in-depth information, we can help you make informed decisions under all economic conditions.

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General Overview

• Currently, there is a 99% probability of a 25 basis point interest rate cut at the next FOMC meeting.
• Deteriorating Labor Market Data in Both the U.S. and Germany:

1. U.S. Unemployment: The number of permanently lost jobs in the U.S. increased by 153,000 in October to 1.84 million, the highest level since November 2021. In the past two years, the number of long-term unemployed has risen by an alarming 665,000.
2. German Unemployment: Unemployment in Germany has risen to the second-highest level in the past 10 years. The number of unemployed in the world’s third-largest economy has increased for 22 CONSECUTIVE MONTHS. Germany now has 2.86 MILLION unemployed people, the most since the COVID CRISIS.

Inflationary pressures are rising again:

• Inflation in Germany accelerated in October, increasing to 2% from September's 1.6% – well above the expected 1.8%. Rising food prices, which increased to 2.3% from 1.6%, and higher energy costs were the main contributors to the CPI increase.
• Institute Ifo: “The inflation rate is expected to rise slightly again in the coming months.”

Many are curious about the conditions in stock markets. The answer depends on whom you ask and observe – the classic American investor or the wealthy and institutional investor?

American consumer expectations about stocks

• The share of American consumers expecting higher stock prices over the next 12 months has reached 51.4%, a record high.
• This is even more than during previous peaks in 2018 and 2000, before the Dot-com bubble burst.
• This percentage has more than DOUBLED over the past two years, as the stock market has seen one of the largest gains this century.
• Market sentiment has never been so euphoric.

Global investors have never invested in U.S. stocks on such a scale

• Global inflows into U.S. equity ETFs have reached approximately $145 billion this year, a record high.
• This is $10 billion more than the previous record in 2021 and twice as much as last year.
• Most inflows, around $105 billion, are from Europe, while $40 billion comes from the Asia-Pacific region.
• For many, U.S. stocks now serve as a safe investment during economic uncertainty. But for how long?

What do institutional investors say?

• U.S. stocks saw the largest outflow from institutional investors since September 2015.
• Net sales reached approximately $6 billion last week, the second-largest in at least 15 years, according to BofA data. This is also about 50% higher than the record inflows in 2024, which reached about $4 billion a few weeks ago.
• It appears that professional investors are beginning to withdraw from the market following a 20% increase in the S&P500 this year and a 30% increase over the last 12 months.

What about Warren Buffett?

• He is recognized as the greatest investor of all time...

• Recognized as the greatest investor of all time, Warren Buffett and his company, Berkshire Hathaway, have recently aggressively reduced their stake in Apple, causing Berkshire Hathaway’s cash reserves to rise to a record $325 billion.
• Buffett’s stake in Apple has decreased to $69.9 billion, a 70% drop from its peak value of $174.3 billion at the end of 2023.

Jeff Bezos also Plans to sell Amazon Shares

• Jeffrey Preston Bezos, the American business magnate and oligarch, best known as the founder, executive chairman, and former president of Amazon, recently filed to sell 16.4 million Amazon shares (AMZN, Finance), with an expected cash value of approximately $3.05 billion.

“Impressive” past growth of gold

• Gold prices have hit record highs 40 times in 2024, marking the best year of this century.
• Gold has gained 33% this year and is on track for its best annual return since 1979.
• Only four times in history has gold achieved stronger returns:

- 1979: +126.5%

- 1973: +73%

- 1974: +66.1%

-1972: +48.8%

Gold/S&P500 Ratio

• The ratio between gold and the leading S&P500 index suggests that gold’s growth will likely continue in the long term (with understandable fluctuations), especially in relation to U.S. stocks.

India cares about where its gold is stored

• The Reserve Bank of India announced that it had moved another 102 tons of its gold reserves back to India from the Bank of England.
• This means that approximately 60% of its gold reserves are now stored domestically.

Is gold too expensive? (Part 2)

• Over the past 44 years, gold has increased in price by “only” 226%.
• Meanwhile, the S&P500 index has grown by 5,147%, and U.S. federal debt by 4,045%.
• What will be the outcome at the peak of the next commodities bull trend?

What does “Wealth” mean to us?

• It’s not all about money…
• In moments of social and financial instability, it’s worth reflecting on what wealth truly means to us.

I wish you wise investment decisions and a prudent outlook on the future…

Best regards, Peter

The opinions and analyses provided here are educational in nature and do not constitute financial advice. I do not endorse or recommend any investments based solely on the above information; instead, I recommend consulting a qualified financial advisor. Investors should consider their financial situation, investment goals, and risk tolerance before making any decisions. I am not liable for any investment losses that may result from the use of this information. For in-depth advice, please contact me at [email protected]