Between the collapse in the price of oil, the devaluation of the euro, Qe and low interest rates, the financial markets are experiencing an authentic reverse "perfect storm", finally virtuous, and "Italy has a unique opportunity ahead of it, with Prime Minister Renzi is doing important things, starting with the Jobs Act”. The words with which yesterday Paul Basil, founder and number one of Kairos, leader in savings and true Italian excellence, opened the conference "Scenarios and investment proposals" in Rome for the 15 years of Kairos (8 billion euros under management with always positive performance and very low volatility ) say a lot about the view and sentiment of the financial community in a magical moment for the stock exchanges.
Basilico, who trained at the Mediobanca school but gained important international experience without renouncing independent judgement, innovation and business ethics, uses the typical prudence of bankers and does not forget to mention the dangers behind the corner - Grexit first of all, but also the slowdown of China whose stock market is experiencing a sort of pre-bubble – but it remains bullish on Italy.
And it is a pity that the wavering Berlusconi parliamentarians and the suicide bombers of the Pd minority who oppose Renzi, but who, with their pessimism about Italicum, can only do harm not to the premier but to Italy, did not participate in the Kairos conference in Rome.
How long will the state of grace of the markets last and where to invest at a time when many are wondering if stock market rally it may still have momentum or, after a long run, the turnaround is approaching.
Together with two brilliant money managers like Guido Brera, the skilful manager of the collective management of Kairos, and like Rocco Bove, the magician of the bond market ("he's someone who knows how to extract value even from turnips"), it was the turn of Alessandro Fugnoli, refined and imaginative strategist of Kairos, of which FIRSTonline publishes the blog "Il rosso e il nero" every weekend, illuminating the scenarios.
As always, Fugnoli started from afar and didn't fail to amaze. He left from Japan that Abe is trying to free from the double pincer of debt (237% of GDP) and the demographic crisis that leads to an evident aging of society' to arrive at Diocletian. “Below you – Fugnoli wittily recalled – are the remains of the Baths of Diocletian who, with his alchemy between gold and coins, was, in his own way, the first in history to launch Quantitative Easing”.
What does Fugnoli mean with such an unexpected and courtly reference to Roman history? That Qe comes from afar and that it "is forever". “Mind you – specifies the Kairos strategist – I don't mean that Mario Draghi's Qe or that of the Fed will be uninterrupted: there will be interruptions but monetary policy is destined to remain expansive", mutualising the debt, at least until inflation rises above the necessary. Where there is Qe, the currency depreciates – it has happened before to the dollar and is happening to the euro, not to mention Japan – and the stock exchanges inflate.
Therefore, as he often wrote in "Il rosso e il nero", Fugnoli advises to hold cash in dollars and invest in equity: first ofEurope and Japan but, selectively and with greater risks, also of the Emerging (not from Brazil but from Mexico, the Vietnam and Turkey). And if you really want to invest in bonds, pay attention to Bove's recipe: long bonds with a little more risk but full of quality (Poland primarily). And may good luck be with you.
