{"id":60160,"date":"2014-09-11T02:33:32","date_gmt":"2014-09-11T06:33:32","guid":{"rendered":"http:\/\/countingpips.com\/?p=60160"},"modified":"2014-09-11T02:33:32","modified_gmt":"2014-09-11T06:33:32","slug":"neither-himmler-nor-stalin-could-keep-this-market-trend-down","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/neither-himmler-nor-stalin-could-keep-this-market-trend-down\/","title":{"rendered":"Neither Himmler nor Stalin Could Keep This Market Trend Down"},"content":{"rendered":"
September 11, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

From time to time, the ebbs and flows of the investment world can leave you with a sense of déjà vu.<\/p>\n

It usually comes the umpteenth time you hear some brainless pundit blather about rising interest rates…‘uncertainty’ in the Eurozone…<\/strong><\/a>or the impending doom of the stock market.<\/p>\n

You’re sure to think ‘Haven’t we been over this ground before?’<\/p>\n

Maybe you’re new to the stock market<\/a> and that thought is yet to strike you. <\/p>\n

It will…just give it time. <\/p>

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The funny thing is, sometimes it takes a change of scenery to bring on that sense of déjà vu.<\/p>\n

It hit me hard four weeks ago when I touched down in London.<\/p>\n

I should have expected this. You see, I lived in the UK for a few years during my previous life as an investment banking analyst.<\/p>\n

I know the roads of East London like the back of my hand.<\/p>\n

So of course, the memories started flooding back as soon as I hit the streets of Shoreditch.<\/p>\n

The common refrain among young Aussie expats who return to these shores is, ‘Oh, nothing ever changes in Australia.’<\/p>\n

People who say that are implying that culture and the economy develop and thrive so much faster in places like London or New York.<\/p>\n

Well, that’s bulldust. <\/p>\n

Anyone who parrots that phrase is sending you this coded message, ‘I’m disappointed my holiday’s over,’ (even if he or she did<\/em> work abroad).<\/p>\n

The London I just observed is almost identical to the one I left behind in 2012.<\/p>\n

Except for the occasional shopfront under new management, or apartment block sprouting skywards…the joint hasn’t changed.<\/p>\n

I pushed past the same throngs of Londoners scurrying to work in the Square Mile.<\/p>\n

I saw the same volume of punters out on the tiles at night…though everyone looks a bit younger now.<\/p>\n

The social and business environment hasn’t changed in years. And nor has the investment environment.<\/p>\n

Back in 2012, you and I had already spent several years as test subjects. I’m talking about the US Federal Reserve’s<\/a> ‘grand economic experiment’.<\/p>\n

The one that involved opening the money spigots…setting interest rates just a whisker above zero percent…and making it clear that low-rate policy would last indefinitely.<\/p>\n

Of course, the American mania for rock-bottom interest rates spread to Europe<\/a>, the UK…and to Australia.<\/p>\n

At that point in 2012…just as we saw in the previous few years, and just as you see today…many investors kept their heads in the sand. <\/p>\n

They insisted that rock bottom interest rates<\/a> were unsustainable…that inflation and unemployment would soar…and that interest rates would have to rise.<\/p>\n

Well, here’s a newsflash…those people were wrong. <\/p>\n

And by continuing to be wrong, they’ve missed one of the longest and strongest bull markets in history.<\/p>\n

I’ll let you in on a little secret about investor psychology. <\/p>\n

You know those people who forecast in 2010 that interest rates would rise in 2012? <\/p>\n

They’re the same people who forecast in 2012 that rates would rise in 2014…and they’re the same people who are forecasting now that rates will rise in 2016.<\/p>\n

I guess it comforts some people more to deny that they’re wrong than it does to admit they’ve got things twisted. <\/p>\n

It doesn’t make them any less wrong though. And the investment world still hasn’t changed.<\/p>\n

Low rates are here to stay. That means as an investor<\/a>, you have to keep taking risks if you want to grow your wealth.<\/p>\n

That means you need to own shares in companies that are taking smart, calculated risks.<\/p>\n

There are plenty of them out there…and a lot are still trading at reasonable prices.<\/p>\n

But after two years of rising stock prices, you have to look a little harder to find them.<\/p>\n

And the closer you get to ‘frontier investing’…the richer your potential rewards.<\/p>\n

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Casting off the shackles<\/strong><\/h2>\n<\/p>\n

I couldn’t have seen a starker contrast from my trip to London than when I touched down a few days later in Warsaw, Poland.<\/p>\n

Commerce has thrived in the area where Warsaw stands for more than a thousand years.<\/p>\n

It’s an attractive, well-designed, bustling city.<\/p>\n

But here’s the thing I still struggle to get my head around: barely any buildings in Warsaw are more than 70 years old.<\/p>\n

That’s because Nazi Germany destroyed Warsaw in 1944.<\/p>\n

When I say ‘destroyed’, I mean it. Groups of Nazi engineers worked street-by-street, burning and demolishing every single building in the city.<\/p>\n

It was all in aid of Nazi chief Heinrich Himmler’s decree that ‘the city must completely disappear from the surface of the earth…no stone can remain standing. Every building must be razed to its foundation.<\/em>’<\/p>\n

And when Soviet troops were near to liberating the city, Stalin gave orders to hold them back so that the Nazis could finish their terrible work and break Polish resistance, ahead of the Soviet occupation.<\/p>\n

It’s an awful history.<\/p>\n

But the Polish are a resilient people. They worked tirelessly for decades after the Second World War to build a new city of Warsaw.<\/p>\n

It hasn’t been easy. Warsaw and Poland suffered under the yoke of a Communist regime for most of the second half of the 20th century.<\/p>\n

They’ve only very recently cast off these shackles.<\/p>\n

And what do you know? The country’s enjoying the strongest economic boom in its long history.<\/p>\n

The chart below shows just how powerfully Poland is growing.<\/p>\n

<\/a>
\nSource: Bloomberg<\/em>
\nClick to enlarge<\/a><\/em><\/div>\n<\/p>\n

When I’m selecting investments, that’s the kind of economic backdrop I love to see.<\/p>\n

It just goes to show that you don’t have to look to Asia or Africa for emerging market<\/a> exposure. You can find it right in Europe.<\/p>\n

Here’s what the Warsaw experience has shown me about investing…<\/p>\n

Never write off a country (or a company) with smart, hard-working management just because it’s been brought to its knees by external forces.<\/p>\n

If you can pick the moment where things start to turn around, you can reap sensational rewards when a business starts growing strongly off a low base.<\/p>\n

And if you want to bank outsized gains, you need to take stock of the risks…and take the plunge into emerging markets and emerging companies. <\/p>\n

Tim Dohrmann+<\/a>
\n Small-Cap Analyst, Australian Small-Cap Investigator<\/em><\/strong><\/p>\n

From the Port Phillip Publishing Library<\/em><\/strong> <\/p>\n

Special Report: The explosive investment style providing consistent opportunities to thousands of Aussies…<\/a><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post Neither Himmler nor Stalin Could Keep This Market Trend Down<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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