Don't listen to Pinocchio Powell. He tells a lie that serves to frighten the many Candlelights who, not only in the United States, have mistaken the Stock Exchange for Toyland and delude themselves that, thanks to state support, it is still possible to get by without too much effort. Once again Gianni Tamburi, founder, president and CEO of Tip and wise administrator of the fourth capitalism of our house, goes against the tide. Waiting to resume the tour of our home businesses which, gas bills permitting, are confirmed to be the most dynamic and capable of intercepting the desire for a post-Covid recovery. “Finally – he says – many have understood it. A year ago there was only me”. But not even he has a key to understanding politics these days, "dominated by a frightening sovereign drift", the real unknown factor of an autumn which, reading the headlines, promises only blood and tears. Maybe too many. Here are his reflections in this interview with FIRSTonline,
Doctor Tamburi, is the world really that bad on the eve of autumn? What has changed in the last few months?
“I would say Fed Chairman Jerome Powell is dramatizing the situation.”
Singular thesis. Why would the Fed raise rates without an immediate need?
“What Powell is saying is totally wrong. The medicine of interest rates these days does not serve to slow down the economy given the frightening demand that circulates on the markets”
So the Fed is wrong.
"It's not for sure. But tell a lie to achieve the desired result”.
That?
“The real goal is to kill the so-called Robin Hooders, that is, those millions of Americans who improvised speculators after having collected public support during the pandemic that they used to play on the stock market. It is the tip of the iceberg of a phenomenon which concerns millions of people who are convinced that it is possible to get by without working or almost. The Fed is painting a tragic picture, with the psychological goal of scaring the public and shutting down any dangerous euphoria. A strategy that can work. At least for those who stop to read the headlines of the newspapers or the news without going any further".
Put like this, it seems like a dangerous game. Perhaps too risky for an economy experiencing more than one stress: Covid, the war in Ukraine, the end of globalization and so on.
“Let's try to look at the real economy. The dominant datum is that the economic situation is dominated by a frightening demand that is hard to satisfy. All my companies, those that belong to Tip's investments, are doing very well. They will be particularly lucky, perhaps. But the common fact is that they can't keep up with the demand”.
After Covid, probably. It was the disease that blew up the production chains, starting with the components, and to blow up the logistic chains. Or not?
"Real. But these phenomena are returning. The new, truly disruptive aspect is that we are faced with an impetuous demand. Let's put it this way: Covid has made us see death in the face. And so, as happens after wars, now we all want to buy, consume, invest. The market is dominated by the fact that we will all consume more and save less. This is creating all kinds of demand: hoods, pumps, cables, I see everywhere want to buy. In short, the horse wants to drink - The picture that emerges from the companies in our network which is a fairly faithful mirror of manufacturing, confirms the existence of this exceptional demand. There are companies that have at least double orders compared to a year ago. I'm not talking about 30 or 40 percent, na about 100 or even more. A phenomenon of these proportions cannot be curbed by moving the interest rate lever. What does Prysmian or Interpump care if rates are at 2 or 4?”
Maybe not at Prysmian. But to the others?
“The real problem is being able to produce. Of course, Powell fears that long-term demand pressure could create inflation. But, for me, he is above all afraid that the markets could resume the race for greatness, resurrecting easy finance that has caused so much trouble. For this he dramatizes the situation ”.
But looking at the gas stroke, the situation is truly dramatic.
“Speculation has taken over. There are companies that suffer a lot because they are unable to recover the costs. And they must be helped to overcome the dramatic situation. But there is another, no less serious emergency: in the coming years, labor costs will be the most important structural component for companies”.
An extra month's salary, the reduction of the tax wedge. There is a lot of talk about it during the election campaign. Will anything be done after the vote?
“I don't know, but I don't think we should rely too much on political recipes. I limit myself to saying that, not only in Italy, simpler ways to live are emerging thanks to public support of various kinds. I won't go into the merits of the basic income or other supports, but I believe it is essential to re-establish a strong gap between the basic income, the one to guarantee survival, and the salary. Otherwise people will stay at home. I say to my companies: raise salaries, regardless of the political chatter. Hold on to people, don't risk losing a good employee for an extra 200 euros a month, with the risk of having to go looking for replacements that you may not be able to find. You have good companies, you earn 10-15 more, you have good prospects. Give a part to the employee: it will be a good investment”.
About politics. Is the toy in danger of breaking after the September 25 vote?
“I know little about politics. Or at least there are many things I don't understand. It is a fact, however, that the international financial community is very alarmed by the fact that these right, not the right, can take over a country like ours thanks to electoral promises that are far-fetched. If once elected they were to do even a small part of what they promised, they could send the state budget into shambles ”.
Why, in your opinion, despite the good results achieved in the 18 months of the Draghi government, is it not possible to make common sense prevail in political programs and attitudes?
“It's a question I address to you journalists. I look at my company, at my family and, all in all, I am free from the constraints of politics. But in the meetings I attend, I don't refrain from telling my interlocutors that they are wrong to hand us over to a right that is a disaster. Yet so many people vote in this way pretending to believe in crazy lies with which Berlusconi has managed to attract under this non-existent Forza Italia names that I would never have suspected ".
It's populism, honey.
“We are in a frightening global populist drift. Just think of Boris Johnson or the controversy in France on private flights. Luckily I operate within a rational financial dimension. But I look with concern at this desire to frighten, to surprise, to arouse emotions rather than stimulate. reasonings. The newspapers put theirs into it. If I say three positive things and two negatives, the title will be on the latter. The pleasure of scaring- And then, let's face it, incompetence prevails. Let's go back to Powell; just launch a title, so most of them stop there, without reading. And so the Fed chairman fools us too. People read a Powell headline and believe it, he's kidding us. Thankfully, that's just my opinion. But it's okay."
Given these premises, what strategy do you recommend on the eve of a hot year, certainly not easy?
“It's time to start investing as affordable prices show up. There are good companies that have withstood very difficult economic situations and have come out of them in a big way. Companies that, if the world doesn't collapse, will continue to produce those ten to twenty things that will always sell. This is the reasoning that made me an excellent customer, one who is almost never wrong. The real economy is worth looking at. Among other things, we have just returned from the bond disaster, but it has been so bad for decades”.
And the case to look at the banks?
"I would say no. The next crisis, i.e. the probable recession, will weigh heavily on the banks. And the States, after the aid given during the pandemic, will be much less generous. Better manufacturing and services”.
But does it make sense to move on the eve of a possible recession?
“And how long can the recession last? Maybe 7, maybe 8 months. Then the engine of the economy will restart, probably from Asia”.
By the way: better America, Europe or maybe just Asia?
“There are good deals everywhere. But I would speak of companies rather than markets. An example: Interpump today has thirty subsidiaries in the United States. You think of investing in Sant'Ilario and you find yourself in the heart of the USA”.
One last question about stock exchanges. The system, not only in Italy, is not in good health: there are more delistings of the moving quotations. Why?
“In recent years, the Stock Exchanges have been burdened with many constraints that condition the activity. I am thinking of female quotas, but not only. And this has favored the expansion of private equity: instead of charging me with various charges, I sell everything to a private individual who finances himself at almost zero cost, collects crazy figures, can pay companies more than what the stock market prices them. The over-regulation turned out to be a mistake”.
In this way the offer to the world of savers is reduced.
"Unfortunately, that's the way it is. The trend of creating a fund, putting a property and some illiquid securities in it, has taken hold. Then, in a few years, you'll see. Someone will gain, many, greedy by the possibility of investing with leverage, no”.
And there is another limit: a lower appeal of the Stock Exchange hinders the M&A process necessary to have bigger and more solid companies. It is not so?
“But no, this is only true in theory. The reality is that our companies as they are have proved to be very good at dealing with the emergencies of recent years. Our capitalism, a mix of family culture and great managerial skills, has withstood emergencies better than others. And he seems to be in good health."
And Tamburi greets us: the (short) holidays are over. He resumes the tour in search of new jewels to add to the living room of our free-range and often surprising capitalism, proof of politics and rates.
