It is so disappointing that we look to well-known and trusted organizations like the IMF and OECD to make economic forecasts to guide us when investing when they are invariably wrong most of the time. Same goes for trusting the Fed economic forecasts.
One year ago, the consensus forecast by these experts was that global growth would exceed 3.7% in 2019 and do even better in 2020 only to be lowered by November to growth below 2.8% and 3.2% in 2019 and 2020, respectively. Last week, we discussed how bearish all the market pundits/experts were last December for 2019 while the economic forecasters were optimistic. Both were absolutely wrong! As usual, they were looking in the rear-view mirror rather than over the valley, which is our strength as witnessed by anyone who read our blogs over the last year.
Paix et Prospérité was forecasting by the end of last year a rising U.S. market led by defensive, high-yielding stocks while forecasting a slowing economy due to an overly restrictive Fed monetary policy which we were convinced would change by the spring. We also felt that the U.S. would outperform all other economies as the consumer was over 75% of our GNP and would remain strong while other global economies were more reliant on production than consumption and would therefore suffer in 2019.
As 2019 is now ending and 2020 begins next week, the market pundits/experts have all turned positive, at least for now, on a trading basis, while these well-known economic forecasters have all turned much more negative on future global economic growth.
As you know, we began shifting our view months ago away from global growth would remain sluggish believing that we were nearing/passing an inflection point such that global growth would reaccelerate as we moved into 2020. Our core beliefs
