The outlook for the global economy and our financial well-being are intrinsically tied together and their outcome is defined by many different influences and factors.
اضافة اعلان
Some 20 years ago, the world was being steered towards globalization, but just less than a decade ago the world started to turn towards the exact opposite direction, and today we are heading towards deglobalization.
This is due to many reasons but COVID was the catalyst. With supply chain disruptions all around the world, countries realized the importance of independence and realized their vulnerable points when it comes to materials, commodities, or resources.
This stress test in the form of a global pandemic has changed the stance of global leadership into one that is much more defensive.
The deglobalization was also fueled by reduced travel and the increased cost of global transport due to increases in prices of energy and raw materials.
This is in part due to global warming, carbon footprint controls, and countries raising tariffs and customs to avoid going broke.
Moreover, the age of digitization, being pushed forward by renewable energy revolutions that are pushing the capabilities of humanity every day, has also borne with it cybercrime and cyberwarfare. And since supply chains are now more digitized than ever, we can expect even further supply chain disruptions due to this new form of war and crime.
The above paragraphs include three fundamental factors that are impacting the economy and being reflected in the financial market.
This is exactly how an experienced and intellectual investor begins his or her investment decision journey, with a dose of high-level small food for thought types of brainstorms; so if you find yourself doing that congrats you’ve crossed off one box in a simple yet difficult check list every good investor has checked. But if you still can’t manage to make any money out of the financial market or you keep flopping out on investments, let me tell you what might be missing in your strategy.
Having said that the above high-level methodology is how professional traders and successful investors begin their analysis, they all might go about it quite differently.
Let’s begin with geopolitics, which is a topic that can create endless dialogues, but that’s not what we investors really care about; what we care about is getting numeric translations to whatever conflict is going on between nations.
To do that we begin our search by acquiring data on natural resources; things like total quantities available, total exports breakdowns, import break downs, top trade buddies, etc. and we begin drawing a picture of what that country represents, who are its allies and enemies reflected in trade and commerce.
Secondly, there is the environment. The environment has been trending in the past decade as it’s in our nature to act reactively rather than actively to stave off something. Global warming is heavily affecting our planet and people are dying, landscapes are changing, and pollution is forcing people to relocate.
In other words, the global map is changing. As an investor not wanting to lose money, you want to delve deeper into this topic from a numeric angle; researching things like current alternative energy sources, what raw materials they need, how much of it and who has them. You might be blown away when you realize the quantities of silver, copper, and lithium you need to make a single-family green. And I mean to have a home with solar panels, smart phones with good batteries, and maybe a few Tesla model 3s.
Thirdly, there is technology, which is probably the one you are most familiar with. Yes, Bitcoin’s network still hasn’t been hacked and it’s the greatest modern code out there.
However, since its inception cybercrime has been on the rise. And that is not expected to change, in fact I think it will increase because now the device you hold in your pockets while you walk across your home can pick your pockets and steal not only all your money but your identity as well.
Again, from an investor standpoint you should dive down to the next layer of this analysis by seeing if the world’s leading cybercrime oversight agencies, such as the CIA for example, have any numbers available publically.
Try to quantify the growth in cybercrime and more specifically areas such as malware attacks, ransomwares, etc. Then link that figure to a counter weight such as figures from public cybersecurity; together these two can give you an idea of what cybercrime really is a threat, how big of a threat, and how expensive is it to combat it.
It is this little difference, summarized in a quantitative analysis of observations that differentiates a speculator from an investor.
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