According to Investopedia, a truly professional investor is only really mowing in times of crisis. Seeing the panic in the market, the cold-blooded shark is rather waiting. He knows that the average person’s instincts really deter him from making a loss, not taking a risk: and in the face of unfavorable trends, those who fear loss will get rid of their investments well below value.
Financial Wikipedia he adds:
To benefit from the crisis, we need three things: discipline, patience and, of course, enough wealth for opportunistic takeovers.
It follows that the winners of economic crises always come from the rich. However, there has been a constant crisis for two years, which is supported by data on global inequalities. This was recently written about by the World Bank study. According to them, in 2020, due to the outbreak of the epidemic, the income of the richest twenty percent of the global population fell by an average of five percent, while for the poorest, that figure was six percent. While this does not appear to be much of a difference, as the study points out, the epidemic will have an impact in the long run.
Therefore, while the top rich will regain half of their wealth lost last year this year, the poorest twenty percent is expected to lose five percent of their wealth again.
To make matters worse, post-destruction reconstruction is yet to come. The IMF on Tuesday indicatedthat, contrary to their previous estimates, leading Western economies are expected to emerge more slowly from the crisis. All this also affects the global indicator: it expected an increase of 0.1 percent less than the IMF’s July forecast.
According to the head of research of the organization, the gap between high demand and low supply is behind the problem.
Of course, we can also deduce this from the events of everyday life. It was not possible to get petrol in the UK due to a lack of drivers, Europe is facing an energy crisis, a historic rise in gas and electricity prices. Due to the lack of chips, the price of almost all electronic products is rising, while Hungary suffers from an unprecedented labor shortage. A recent survey of Profession.hu according to the number of job postings posted has increased by seventy percent in the past one year.
Analyzes have come on the assembly line in recent days, a problem the world press has briefly called the global deficit economy. A Moody’s according to the international supply chain is now at the top of the list due to the different epidemiological management in each country and region. While in the United States and Europe, the coronavirus has slowly become part of everyday life, China, for example, is still waiting to open. This, of course, entangles in global logistics, upsetting the balance of the entire supply system. The phenomenon is also covered on the front page by the Economist, the British weekly according to the relief of the epidemic, roughly $ 10.4 trillion was torn into the market. Demand for electronics has skyrocketed since the beginning of the epidemic, while processor manufacturing has been in trouble for years. Due to the delta variant, Asian textile production is wasting and in the Western world there is little movement in the labor markets.
With the restart of factories and office buildings, energy demand is much higher than last year, while sustainable, green resources are still not efficient enough.
Politics culminates in severe disproportions, and international trade is still not dominated by market logic, but by the great power of give-and-take. The U.S.-China customs war has long complicated trade, with Brexit coming back in the form of said gasoline shortage.
The politicization of the market is also a problem because the stumbling block of a single great power can drag the whole world with it. The bankruptcy of Chinese real estate developer Evergrande was a frightening scene as the world watched the debate over the U.S. debt ceiling in recent days – Congress finally nodded at spending beyond the frame.
(Cover image: Oil tankers anchored off the coast of California on April 28, 2020. Photo: Mario Tama / Getty Images)