There is a Time to Reduce Positions even if there are no attractive Asset Classes to purchase

Monthly Market Commentary: December 1, 2019

The historian Walter Isaacson thought that, “Benjamin Franklin felt very strongly in foreign policy in this world, that you needed to at least  show some humility, especially when you were strong."

Saint Augustine wrote that, "Do you wish to rise? Begin by descending. You plan a tower that will pierce the clouds? Lay first the  foundation of humility."

Oscar Wilde wrote that, before he found humility, he spent two years behind bars experiencing “anguish that wept aloud” and  “misery that could find no voice” [Oscar Wilde was convicted and sentenced to two years' hard labour for "gross indecency" with men.]

I am aware that humbleness is a complex subject. I decided to write about it for a variety of reasons. We are in the midst of the festive season and it is a good time to think about how fortunate we all are. I am assuming here that most of my readers had the good fortune to grow up in a more or less harmonious social environment, and had the opportunity to go to school and become educated or to learn some special skills, which allowed them to make a decent living. Personally, I thank God daily for having had the good fortune to be born in Switzerland to parents who brought me up with discipline and taught me virtues such as honesty, modesty, punctuality, dependability, courage, gratitude, compassion, etc., and sent me to good schools, which at the time, in Switzerland, were mostly free of charge. I was also fortunate to live in a political, social, and commercial system that offered plenty of opportunities and mobility.        

The reality is that I started life with a steady tailwind whereas other people who were born in extreme poverty were looking at life that had a constant powerful headwind.          

Regarding equities here's the dilemma. Stock markets like the US where superficially the economy is doing "well" are priced for perfection. On the other hand, emerging markets and European markets, which are relatively inexpensive, do not seem to offer much immediate upside potential as their economies remain weak, or are actually already in recession.        
Therefore, I am gradually reducing my equity exposure to approximately 20% of assets from 25%.  

I am enclosing two contributions. One is an interview with Kevin Duffy who is less than optimistic….  

The other contribution is a letter by Barry Hoffer of Caravan to Classes – a charity which we support.    

I wish my readers Merry Christmas and a successful and healthy 2020.          

Let us remember that as Henri Frederic Amiel said: "There is no respect for others without humility in one's self."

With kind regards   
Yours sincerely   
Marc Faber

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