Butinallthemess,Alexthinksthereisonesafehaven。

Itisn’tgoldorwineorbonds。

It’sequities。

Intimesofbothdeflationandinflation,goodcompanieshavethe“abilityandflexibility”toprotecttheirbalancesheets,profitsanddividendsinawaythatotherassetclassesdon’t。

Russellagrees。

Equities,hesays,arerunbypeople,andiftheyarerunbygoodpeople,thatmakesthemadaptableenoughtosurviveovertheverylongterm。

RememberthebitinCatch-22whenaUSsoldierargueswithanoldmaninawhorehouse,saysRussell。

He’slivedthroughpovertyandacoupleofworldwars,throughMussoliniandthroughthearrivaloftheGermansandtheAmericanswithreallyverylittlechanginginhisowncircumstances。

Thesoldierthinksheisa“shamefulopportunist”。

Theoldmanjustknows“thesecretoflife”:heis107yearsold。

ThesamegoesforagoodmanyItaliancorporations,saysNapier。

They’vemadeitthroughthelast100years。

They’restillthere。

Soifyouaregoingtoupyourequityholdings(notetherisksremainhuge),whatshouldyoubuy?

Itisn’tUSorChineseequities:intheStates,firmsarebeginningtomissearningsforecastsandinChina“stagnantexportmarkets”,overcapacityandtheover-influenceofthestatemakethemarketallbutuninvestable。

However,aswehavesaidbefore,itmightbeEurope。

ArecentreportfromBCAResearchhasachartshowingthat,relativetotheUSmarket,Europeanequitiesareneara40-yearlow,whichsuggestsa“once-in-a-lifetimebuyingopportunity”isclose。

ThoseItaliancorporations?

Theyare,saysRussell,“decidedlycheap”。

AndasfortheHansaTrust?

I’mtoldbySimonMilneofAubreyCapitalManagementthatweshouldbuysharesinthattoo。

Its‘A’sharesarenon-votingandaresoontoexittheFTSEAll-Share。

Asaresult,theyhavebeensoldoffbyindextrackersandnowtradeata32%discounttothenetassetvalueoftheshares。

Thatseemscheap,givenit’sagoodtrustanditsotherclassofsharestradesatasmallerdiscountof22%。

ButIwouldn’tgointooheavily。

Why?

Brazilmightbeabouttosuffera“nastyhangoverofitsown”。

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