Egon von Greyerz & Matthew Piepenburg: The Worst Time (and Backdrop) for Yet Another Grotesque Stock Bubble…

GoldSwitzerland by VON GREYERZ, Released on 2/22/24

In this critically important Gold Matters discussion, VON GREYERZ principals, Egon von Greyerz and Matthew Piepenburg, place the enormous risks of the current U.S. equity bubble within the much-needed context of unprecedented global economic factors.

Egon opens the discussion with a brief review of the unprecedented string-cite of global geopolitical, social, economic and debt risks. From a preventable and escalating land war in the Ukraine to conflicts in Gaza and the broader Arab world to nose-bleed global debt levels in the backdrop of now undeniable social tensions and de-dollarization, the need to be realistic rather than just “negative” is of common-sense importance. As we head into a year already marked by such massive fissures, any attempt to gloss over these facts with an S&P making record highs would be missing the forest for the trees. In fact, the current U.S. bubble is far more of a dangerous rather than safe indicator when placed into needed context.

Toward this end, Matt speaks to something all-too familiar, having managed a hedge fund as well as a family office during prior asset bubbles. Matt gives particular attention to the overt risk indicators of the current S&P bubble, which teeters on the twin edge of unprecedented concentration and over-valuation metrics.

Matt’s perspective is not theoretical, but hands-on, as he explains how the current asset bubble, like the bubble of 2000, is in fact driven by the same fundamentals. He compares the Magnificent 7 to equally profitable and “good” names like the Microsoft, Cisco and Qualcomm of 1999-2000, noting that such otherwise profitable companies rising on margin growth eventually experience inevitable contraction in net income once price, volume and cost advantages trend negatively. No one, of course, can time such shifts, but “this time is NOT different,” as all such bubbles end the same: They pop.

What makes the current bubble (AI mania) so much more dangerous, however, is that it is led by 5-7 names, and when they mean-revert, as all over-valued companies do, there’s nothing left to prop the S&P. In short, when these names fall, everything falls with it, and this time around, the entire global economy is already on its knees. This is bad.

Egon closes the conversation with his own, and equally hands-on, perspective of investing through asset cycles and bubbles, offering needed insights on the risks, as well as lessons, of prior manias. Naturally, the conversation turns to real money and real assets, namely the far less “maniacal” gold. As the foregoing risks continue their exponential growth, gold rewards the far-sighted investor in obvious ways not otherwise understood by speculators. Matt, though not averse to the speculative mind-set, warns of the seductive appeal of chasing (and buying tops) and makes an equally straightforward case for gold in a world losing perspective.

Egon von Greyerz is founder and Managing Partner of Von Greyerz (formerly Matterhorn Asset Management AG & GoldSwitzerland). Since the 1990s Egon von Greyerz has been actively involved with financial investment activities including mergers and acquisitions and asset allocation consultancy for private family funds. This led to the creation of Matterhorn Asset Management, an asset management company based on wealth preservation principles. MAM is part of the Aquila Group, Switzerland’s largest independent asset management group. Von Greyerz makes regular media appearances on CNBC, BBC, etc. and publishes articles on the world economy and wealth preservation.

Matthew Piepenburg began his finance career as a transactional attorney before launching his first hedge fund during the NASDAQ bubble of 1999-2001. Thereafter, he began investing his own and other HNW family funds into alternative investment vehicles while operating as a General Counsel, CIO and later Managing Director of a single and multi-family office. Matthew worked closely as well with Morgan Stanley’s hedge fund platform in building a multi-strat/multi-manager fund to better manage risk in a market backdrop of extreme central bank intervention/support. The conviction that precious metals provides the best protection against potential systemic risk led Matt to join Matterhorn Asset Management. Read Piepenburg’s writings here:…

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