Russell Napier’s Greatest Hits – Generational Cycles, Bear Market Bottoms & West Vs. East

Russell Napier (renown financial historian and consultant for CLSA) has articulated some fantastic insights on the generational cycle, bear market bottoms and currencies in recent years. So for this reason we decided to compile a ‘Russell Napier’s Greatest Hits’ video for you to enjoy. See below for the video and summary.

 

 

Summary:

 

  • The Q ratio (the market value of a company over the replacement value of its assets) and the CAPE (cyclically adjusted PE ratio) influence the supply and demand for physical capital and therefore have significant roles in secular trends.
  • An equity is a balance of assets and liabilities – thus an equity can go to 0 in a deflationary (or seemingly deflationary) environment. Movements in commodity prices can indicate when deflation risk is passing.
  • ‘The Great Reset’ in asset prices would involve a surprise rise in real interest rates where the distortion in the US treasury market would be unwound.
  • Bear market bottoms are characterised by apathy rather than despair — ‘it’s when people don’t want to play anymore’.
  • The stimulus ‘required’ for the West is far too large for the East.
  • The West is on a trend towards more intervention and bureaucracy, whereas the East may be on a trend towards stagnating or even decreasing intervention and bureaucracy.

See here for our collection of rare historical economic data.

Posted Nov 20, 2011

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