investing on the waves: maps

Showing posts with label maps. Show all posts

Thursday, 28 June 2012

Google, not Facebook rules the worldwide web

Google is worldwide the website with the most visitors, traffic. It has 23 of the 100 busiest websites. Facebook is doing less good in America and Europe and is only dominant in MENA, moslim countries. Yahoo is 1 in Japan and Cameroon (a cheap internet providers puts Yahoo as starting page).

source: http://webempires.org/dominating-websites-map/ (numbers from alexa that are not uncontested)

Friday, 15 June 2012

growth of incomes per head after 1871 in western countries

The chart’s source: http://mpra.ub.uni-muenchen.de/39021/1/MPRA_paper_39021.pdf (changed by Hallerbach of Robeco to make the numbers logarithmic)

Australia and UK were the richest in 1870-1900, Australia was especially rich in WWII, but lost then its lead.

Finland and Spain were the poor houses until 1930 (Spain until 1955) and marched then to prosperity. Maybe Spain will follow Italy to the bottom of the pack in the coming years below New Zealand.

There has been a lot of convergence in the incomes per head in the western countries after WWII.

Norway and the US are the winners of last decade.

Thursday, 3 May 2012

Map of PMI's in world: deterioration and improvement in May

From Business Insider two charts(Platt) of the PMi's in the world.
Above was the situation in April, green (=>50) in the Americas, India, Russia and reddish (=<50) in Europe and Australia

In May the situation had deteriorated in Europe and Australia, but also in Brazil.
There was improvement in the US and China and Russia, so you can't say there was a deterioration in the world of the PMI's. Also important is that the PMI of China is the longest leading PMI and then follows the US, while Europe PMI always was lagging on the US

Thursday, 18 November 2010

Maps of prejudices

Tsvetkov makes this kind of maps and you can find them at http://alphadesigner.com/project-mapping-stereotypes.html. This Bulgarian has made maps of Europe (and South America) where you can see the prejudices about the countries according to the US, the Vatican etc. These prejudice maps are quite popular. He has now also made world maps, the world accoring to the Americans. Europe is enlarged because you have so many small countries.

Tuesday, 16 November 2010

The Super Cycle (1) and the growth of the Middle Class

Standard Chartered had a voluminous story about the super cycle on the long run (152 pages). Included are several interesting chapters and charts.
Standard Charted has extrapolated the current existent trends cautiously for 20 years. By doing so you see tremendous changes in the world: the West will be totally passed by China and (in this period not totally0 India. You still become surprised by the numbers after 20 year, even while you know very well of the trends that china and India and many other Emerging Markets do what their name suggests.

The division of Standard Chartered agrees well with ours concerning what the good and bad times are if you make that division according to growth above or below average. That is not in agreement with whatare good times for equities, but is is in agreementwith what are good times for the man on the street in the world (=not only the US and the UK).
The economic growth is high in our propserity and recession scenario (recession for profit margins not for labour income).
The by Standard Chartered forecast growth after 2000 can become even higher, according to us the avarage growth will be higher than in the period 1949-1965 (because of the fast growing weight of emerging markets with their hig growth).

The most important driver behind the changes is the rise of the middle class in the world (they change the world dynamism, not the very poor and the very rich). Standard Chartered divides the world North america, Latin America, Africa below Sahel, Middle east + North Africa, Europe, Pacific (India , China, Japan and rest world). You see the tremenedous growth in asia pacific and the relative stability in the rest of the world. The percentage growth in Africa is big, but the absolute growth is low because of the low starting point.
Maybe Standard Chartered is a bit too pessimistic, but in general the growth of the middle class is the best indicator for the growth dynamics in the world.

Cycles

This blog will discuss from time to time the most important cycles, as we (ter Veer and Vermeulen) decribed in our book.

We illustrate the long wave, the Kondratiev wave, with the chart above the blog. So we see inaverage good times for investors until 2018 (maybe longer).

The four year cycle have we illustrated stylistic above the way ter Veer (and I) always did it. Other people describe the four year cycle difeerently.

From time to time I will try to indicate where we are on the four year cycle. You can't know for sure, so the indication will always be subjective and can be wrong.

At the moment I think we probably are in the phase FG (and we have seen the first correction in this phase).

Summary investing on the waves (beleggen op de golven)

This blog started because of the Dutch book Investing on the Waves (Beleggen op de golven in Dutch).

The summary of the book:

For being a good investor you must have views. You have to explain things well to judge what the future will bring.

We (Ter Veer and Vermeulen) think the next eight to ten years will bring prosperity as the world (dominated by the 85% of the world population that lives in Emerging Markets) has never seen.

We base that view on the study of several shorter and longer cycles in the economy. We use our investment chart (heading this blog) already for several decades: you can see the Kondratiev wave with its regular sequence of the scenarios recovery, creative transformation, prosperity, recession, chaotic downturn and depression.

To determine in which scenario we are you study the important powers in the society: business, employees, government and individuals. The shift of these powers goes in a regular cycle and causes the long wave (Kondratiev) in the economy with its long periods that things go well on average and its long periods that things don't go well.

In the current phase of the cycle business and indivuals are strong (and government plus employees weak). The strong powers cause a high growth of productivity and implementation of many innovations.

High productivity growth is much more important for economic growth than debts deleveraging.

That is why we -especially Emerging Markets- will get strong growth in the world. That will especially be the case when governments invest a lot in infrastructure (including what is necessary for the Green Revolution).

The growth in the world in the past years had three pillars: the ICT-Revolution, the Emerging Markets and the Financial Revolution with its Asset Economy.

All three pillars had its severe setbacks (The ICT-Revolution in 2000-2003, the Emerging Markets in the Asia crisis of 1997-1998 and the Financial Revolution in 2008-2009 because of the Credit crisis). The first two pillars saw very strong recoveries and we expect the same for the third pillar, especially when the Green Revolution will take off..

Gerhard ter Veer was CIO of PVF asset management that later merged with Achmea Asset Management and F&C. After his retirement he wanted together with Peter Vermeulen, then his head of strategy and now strategist at F&C extensively our theories about investing and our views that we had told to the boards of pension funds during decades.

To make things not too heavy and complicated we explain a lot with dreamings, the simple stories that aboriginals use to teach. On this blog you will see more new dreamings.

Explanation for the existence of a long wave (Kondratiev wave)

* Debt mechanism: over and under investment creates long cycles (Marxist explanation)

*Innovation mechanism: inventions, implementations follow long cycles (capitalist explanation). It explains productivity growth and so employment growth.

*Sociological mechanism: you have long periods where the society gets softer and harder.

All three mechanisms explain for a part the phenomenon of long waves. When you take them together, you can get a better picture.

The power shift between Business, Employees, Government and Individuals ( a social mechanism) is according to us the best explanation for long waves.. It explains why in some periods the incentives are right to have succesful innovations,inflation and high investment growth versus other periods in which inflation goes up,unemployment goes up and profit margins go down.

The current debt crisis is definitely a reason why growth is so low in high debt countries.

The possibilities for high growth are underestimated because productivity growth is high, many innovations have to be implemented and important new (emerging) markets grow fast.

In Emerging Markets and some developed markets like Germany you have the old classic situation of the powers for a prosperity scenario: strong Business (strong profit growth, high margins), strong position of employees (unemplyment rate is low or falling to low levels) and a weak position of government (has to downsize). Individualism is not yet strong.
In many dveloped markets like the US and the UK the situation of the important powers is differenT: employees are in a weak position and individuals (like knowledge workers with (international) networks) are in a strong position.

Because of the weak position of employees this is not the classic prosperity scenario, but you still can get high economic growth when the income of business and individuals grows strongly: a Goldilocks economy with a strong asset Economy. When this growth is strong enough this will lead to a more normal prosperity scenario with fast declining unemployment rates.

This situation will occur much sooner than most people realise: productivity growth is high, the housing market in the US will grow strongly from rock bottom levels, investment growth will be very high because of high profit margins and low real interest rates.

Because 85% of the world population lives in Emerging Markets and only 15% in Developed Markets and economic growth in the world is more than 4% (even while it is now only 2% in Developed Markets) for the world in total you can speak of a prosperity scenario.

Investment Chart Kondratiev Wave