Here's a brief media clip of Gerry Frigon discussing the latest developments in the ongoing European saga, including the results of the elections which took place in Greece and Spain over the weekend.
The need for pro-growth reform in the struggling southern European economies ties right back to the quotation we offered recently from Friedrich Hayek (he said it in 1960): "what is most urgently needed in most parts of the world is a thorough sweeping-away of the obstacles to growth." It also ties back to a piece we published in 2010 entitled "Growth is the answer: the primacy of human creativity," and the quotation from George Gilder cited in that piece saying, "Only freedom can enable innovation and empower progress."
What is the upshot of all of this for the investor? For one thing, it is looking as though the markets are less and less inclined to panic over every piece of news coming out of Europe. This crisis has been a long time in the making, and it should no longer be a surprise to anyone. It is not going to solve itself overnight either. Pro-growth reforms have so far been offered by neither "the left" nor "the right" (which ties back to some of the things Friedrich Hayek was saying in the other quotations we cited from him in yesterday's post). That's because the older definition of "liberal" policies that he advocated for were quite different from what is usually categorized as "left" or "right."
We believe that the lesson that investors should take out of the woes of Europe regarding their own portfolios is a similar appreciation for the primacy of growth and innovation -- not just for their "growth" investments but also for their "income" securities as well. If you loan money to a company or government in the form of bond purchases, in expectation of gaining an income stream until your principal is returned, be sure to examine the growth potential for that company or that country's economy as well.
Meanwhile, while it is of course important to be aware of the developments in Europe, investors should also be careful not to let the ongoing sensationalized news reporting about the situation there become a reason for missing out on investments in companies that continue to go about their business in very successful fashion in all different parts of the economy.
The need for pro-growth reform in the struggling southern European economies ties right back to the quotation we offered recently from Friedrich Hayek (he said it in 1960): "what is most urgently needed in most parts of the world is a thorough sweeping-away of the obstacles to growth." It also ties back to a piece we published in 2010 entitled "Growth is the answer: the primacy of human creativity," and the quotation from George Gilder cited in that piece saying, "Only freedom can enable innovation and empower progress."
What is the upshot of all of this for the investor? For one thing, it is looking as though the markets are less and less inclined to panic over every piece of news coming out of Europe. This crisis has been a long time in the making, and it should no longer be a surprise to anyone. It is not going to solve itself overnight either. Pro-growth reforms have so far been offered by neither "the left" nor "the right" (which ties back to some of the things Friedrich Hayek was saying in the other quotations we cited from him in yesterday's post). That's because the older definition of "liberal" policies that he advocated for were quite different from what is usually categorized as "left" or "right."
We believe that the lesson that investors should take out of the woes of Europe regarding their own portfolios is a similar appreciation for the primacy of growth and innovation -- not just for their "growth" investments but also for their "income" securities as well. If you loan money to a company or government in the form of bond purchases, in expectation of gaining an income stream until your principal is returned, be sure to examine the growth potential for that company or that country's economy as well.
Meanwhile, while it is of course important to be aware of the developments in Europe, investors should also be careful not to let the ongoing sensationalized news reporting about the situation there become a reason for missing out on investments in companies that continue to go about their business in very successful fashion in all different parts of the economy.