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Tiho Brkan Profile picture
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17 Dec, 7 tweets, 3 min read
1/ US Dollar Thread.

The medium-term technical picture shows the bull market (uptrend) — which started in the 2008/11 period — has come to an end with a recent break down of an important trend line support.

The trend is now clearly down.
2/ Why is this important?

Since President Nixon took off the Gold standard, floating the $USD in 1971, it has gone through 3 secular bull & bear markets.

History shows that currencies enter multi-year trends & the probability is high $USD is entering a multi-year downtrend now.
3/ What does this mean for global investors?

• exit $USD denominated assets
• increase stock exposure Asia Pacific & EM countries
• focus on small & value, not large & growth
• become a real estate LP in EU & UK deals
• hold cash reserves in Singapore Dollar & Swiss Franc
4/ What would be the catalyst?

First of all, we don't know if it will decline (unlike every other Twitter guru predicting the future), but we can discuss probabilities.

More & more international heavyweights are moving away from the greenback!

5/ Swiss Franc is one of the few stronger currencies which never really lost any ground vs the greenback over the last decade — unlike the Pound or the Euro.
6/ Singapore is probably the best city/country in the world right now,

And as a financial center, it is becoming perceived as Switzerland of Asia.

Sing Dollar ferocious break out vs $USD in the chart below!
7/ In general, I am very optimistic on the Asia Pacific currencies.

After all, this is the Asian century where economic growth, growth of HNWIs & the middle class is on steroids.

Our own proprietary index below includes the Aussie & Sing Dollars, Korean Won, Ringgit & others.

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More from @TihoBrkan

Tiho Brkan Profile picture
19 Dec
Saving is one of the most important concepts in personal finance.

However, there is a major difference between a healthy saving rate & extreme frugality with delayed gratification.

The latter means having money when it’s utility becomes almost useless (only for medical bills). Image
This is wisdom.👇🏽
Also:

• utility of money declines as we get older

• retired people have mental blocks withdrawing their nest egg

• delaying gratification too long can end up with regrets later on

• when 65, you might have the money, but you won’t have the stamina (look @ the meme)
Read 5 tweets
Tiho Brkan Profile picture
16 Dec
1/ If you are getting sick and tired of the same old pitch decks from the USA,

Which just about every man and his dog are talking about,

And go something along the lines of:

"4.5% CAP rate, we will bump up the rents, blah blah blah"

then should you consider the UK market.
2/ This is where we have been investing over the last few years and achieving fantastic rates of return.

The narrative on the surface is bad with Brexit & loss of confidence.

Bank funding is as depressed as the GFC of 2009, basically "blood on the streets" kind of a scenario.
3/ Lack of funding supply, means demand for capital is willing to pay far higher rates of compensation for the relative risk taken.

In the construction finance area we operate & invest in, we are noticing the following:

Senior loans @ 8-11%
Mezz loans @ 15-22%
JV equity @ 25%+
Read 6 tweets
Tiho Brkan Profile picture
13 Dec
1/ Sentiment & Valuations Thread! 👇🏽

Citi’s panic/euphoria model goes above 1.6X.

Last time that happened was in the year 2000.

Stock market fell 3 years in the row, halving in value. No positive returns for 12 years were registered.
2/ US broad stock market has registered 4X book value recently, which is the most overvalued reading since the Dot Com bubble.

This is very extreme.

However, many growth companies don't have tangible assets anymore, so it's worth looking at many indicators...
3/ ...especially price to sales which has recently registered a record reading above 2.7X.

Today's valuations are very similar to the late 1990s and early 2000s.
Read 18 tweets
Tiho Brkan Profile picture
11 Dec
Philosopher Karl Marx & his utopian views of a society where you do the work you can do and take for yourself all the things of necessity you require were pretty crazy in hindsight.

But nowhere as crazy as today's market participants, who believe prosperity can be maintained...
...and controlled by governments & central banks — which will never allow another major downturn or recession to occur on their watch.

If printing money out of thin air is such a great solution in the first place, why do we have taxes? Why do we aim at increasing productivity?
Why don't we just spend all of our time at the beach, or in the ski resorts?

Without any work needed and always waiting for a new batch of freshly printed warm & crisp dollar notes to stimulate our over-indebted economies and pay for our never-ending deficits?
Read 4 tweets
Tiho Brkan Profile picture
11 Dec
You give the Fed way too much power. They don't have that sort of omnipotence. If they did, they wouldn't let 2008 happen.

What they are doing with cheap money is sawing the seeds for an even bigger day of reckoning in the future. The free market will eventually overwhelm them.
Back in 2007, they had some level of interest rates to cut, and they had ways to go experimenting with other toolbox options, including:

• future guidance
• additional QE
• inflation targeting

Now, governments & CBs they have just about shot all the bullets they can shoot.
After 13 years of experimental monetary/fiscal policies — since 2007 — market participants are convinced central banks and governments exercise full control over business cycles, debt levels, and asset prices.

The view today is, they have your back. What could possibly go wrong?
Read 4 tweets
Tiho Brkan Profile picture
6 Dec
1/ We believe a fantastic investment opportunity exists in the #London luxury real estate market today.

This is a thread for those interested in investing alongside our family business.

Here is what we see and why we like it. 👇
2/ Our family has worked in the single-family luxury market for over two decades but has never done anything in London (yet).

So naturally, as we watch London's prime center go through a 5-year correction of -20%,

We've started paying attention!
3/ Since most private investors aren't cross-broader allocators, they aren't focused on relative price changes between markets.

Before #Brexit, before UK's stamp duty hikes & before COVID-19,

London was the most expensive luxury market in the world on a $USD sq/ft pricing.
Read 13 tweets

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