When the World Turns the Corner on the Greek Crisis—Pat McKeough on YouTube

This is the latest in a series of video interviews in which Pat McKeough gives his advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and in still others he serves as an investment counsellor as he discusses events that are affecting the markets and the economy. That’s his role this week as he discusses the anxiety many have about the ongoing crisis in Greece. Pat turns the general sense of pessimism on its head—the markets frequently move up before crises are solved, while there’s often more cause to worry when things look good. And he adds an optimistic postscript about energy in the years ahead.
The Crisis in Greece: Be Ready for an Upturn Q: Pat, a lot of readers are asking how can the world possibly get over this Greek crisis? Pat McKeough: Well that question doesn’t really matter—how we will get over the Greek crisis. We just know that we will get over this crisis. Crises come and go and somehow the world always manages to get over them. You could say there have been crises that were exceptions. One was the fall of the Roman Empire, but that took hundreds of years. World War II was another such situation—I don’t think we’ll see a repeat of that. I think what you need to be aware of is that the markets turn around before the crisis ends. The markets turn around when people start to see the end of the crisis coming along. You know, the markets basically have been going up since March 2009. In fact, there’ve been a lot of scares and a lot of bad news along the way: we’ve seen some setbacks. But basically it’s been going up. And it could continue like that for some time. I think that by the time the Greek crisis seems to have gone away, and Ireland and Italy and Spain are back on their feet, it may turn out that will mark a peak in the market. It may turn out—it often does—that when everything looks good, that’s the time when you need to worry. Whereas now there’s an awful lot of things to worry about, whether it’s the finances in Europe, or the Iran nuclear testing program, or Syria’s civil war going on, Russia’s resurgence. I think you really have to recognize that a lot of crises that you read about in the media, many people have an interest in portraying them as being much more severe, much more pertinent than they really are. So you really can’t go by media coverage, and you can’t go by extrapolating what might come from one thing to the next to the next. What you’ve really got to do is take a broader view. Say to yourself: is there anything good going on in the world? One thing I think people are underestimating is that the availability of energy is going to change a lot in the next few years, thanks to fracking, thanks to advances in oil and gas production. I think some of the bears are talking about oil shortages being worked into various scenarios. But it may well be that we’ve seen the peak of oil for a decade or two, simply because OPEC won’t want to keep prices so high that it speeds up development of new gas sources. So I think now is the time to be ready for an upturn, not to be worrying about the roof coming down on your head. [ofie_ad] COMMENTS PLEASE Of the crises you have seen over your lifetime, which one seemed to be the most dangerous at the time it occurred? Was the outcome less devastating than the media predicted? If you were investing at the time, how did you do during and after the crisis? Let us know what you think in the comments section below. Click here.