My former colleague, Wingson Cheng, shares several interesting articles with me. He is an important source of good research and news articles for me. He shared with me what Byron Wien wrote after his trip to Europe in June. Some important insights for me:
(1) Germany is ageing faster than Japan
(2) An investor in Europe thought that France would outlaw robotics in manufacturing
(3) Accounting issues with even big companies in China are a concern for European investors
(4) No mention of India
(5) Investors find the target returns unrealistic but that their superiors are reluctant to adjust them down.
The last one is interesting for me. It forces managers to invest in risky assets and keep asset bubbles at play far longer than they should. Bubbles become bigger too in the process before they pop.
The baby-boomers think that they are still in the Eighties and Nineties when all was going their way.
(6) The notion that Europe has a big black market economy and that the official statistics could be understating growth simply amuses me. The only thing that matters is the incremental change in the size of the parallel economy. Only if it got bigger than it used to be, then one could claim that it understated the true growth rate.
One would expect that with all the tax authorities’ clampdown on parallel economy, its size would have shrunk. If it did not, that would be a different concern actually.
The full article is here. But, behind a paywall, probably.