History is always strikingly similar, especially tragic things.
Recently, Musk's remarks on Twitter have once again sparked discussion in the market, this time throwing a heavy "bomb" at the market, saying: "Predicting the macro economy is challenging, and my intuition is that the Great Recession will be around the spring or summer of 2022, but not later than 2023."
Regarding Musk's remarks, the market is more "panicked". Some media outlets even directly headlined "Musk: There is a financial crisis in 2022."
I don't think we should pay too much attention to this interpretation, because in the past hundred years, the economic crisis has been a cyclical behavior, and every ten years a round has always attracted the attention of a part of the market, but it has no effect.
In fact, Musk did not give a definite reason for predicting a recession this time, and it seems that everything is just his intuition. This prediction is also a little stronger than fortune telling, if you have to force an explanation, then you can only say that as the world's richest man, his perception of the global economy is indeed much stronger than that of ordinary people.
In his assessment of the global economy, he also asserted that if history can be used as a reference, not many people or companies will survive the next recession.
I think in fact, there is no need to over-interpret, from the perspective of historical development, since it can be called an economic crisis, it means that this is a universal, industry-wide, widespread economic behavior, then as an individual under the global financial system, it is generally difficult to resist this risk, so predicting success is not of great significance to ordinary people.
At present, the global economy has indeed accumulated a lot of uncertainties, including water releases during the epidemic and many abnormal economic indicators.
Taking the US stock market as an example, the CURRENT US stock market has been at a high level, but the structure is very obvious, that is, the head of the company (index constituents) has been hitting new highs, and the siphon effect of the stock market is strengthening. In contrast, other small and medium-sized companies have been at a low level, which has led to increased liquidity for SMALL and medium-sized enterprises in the US stock market.
Not only that, inflation in the United States has also reached a historic high, more obviously the price level is rising, but the real income of residents has not increased, during the epidemic, the wealth in the hands of the rich has gathered in large quantities, while the poor are getting poorer.
In addition, house prices are also an important measure. According to foreign media reports, the global house price increase in 2021 hit the highest level before the 2008 financial crisis, and the increase in the United States is also considerable, the data shows that in October, the house prices in 20 cities across the United States rose by 18.4% year-on-year.
Compared with Musk's judgment, Buffett has focused on defense since 2018, and its current main position is Apple, and the company's stock accounted for 40% of the overall position, which shows Buffett's caution. At the same time, Buffett has continued to increase his cash holdings and buy back Berkshire stock.
In the past few years, because Buffett is too cautious, it is common to lose the market, and because of this behavior, Buffett is often questioned, but today, when the situation is getting clearer, Buffett, who holds nearly $150 billion in cash, is the least panicked person in the world.
As we all know, for a large number of rich people, most of the form of wealth performance is stocks, and the rise in stock prices drives the rise in body value, but when it encounters a crisis, the rapid decline in stock prices will make the stock lose liquidity, and it is common to fall by 60% to 70%, so the importance of cash when the crisis comes is self-evident.
On the whole, I think we don't have to care too much about the crisis, because when it comes, we can not do much, rather than preventing the arrival of the crisis, it is better to do a good job in the immediate matter, such as working hard to do a good job in manufacturing, such as seriously delving into new technologies, crisis and opportunity are never isolated, only hope that when the crisis comes again, we can summarize more problems from it, so that the future can fly higher.