Satyajit Das, the author of Extreme Money: Masters of the Universe and the Cult of Risk recently joined CNBC for a brief interview (seen here). Das believes the world is experiencing an enormous debt bubble that took over 30 years to build and will take nearly as long to end. But he’s not all doom and gloom. Das says there will be great opportunities along the way.
He is approaching the environment using three specific strategies:
1) Capital preservation is key. In particular, ensure the return OF your capital and not so much the return ON your capital. Guarantee what you get back.
2) Look for income. Dividends, Cash flow, and income will become increasingly important as interest rates continue to decline and investors reach for income.
3) Play the volatility. As the debt cycle evolves there is going to be continuing volatility in the global markets. He likes playing out of the money options on volatility as a way to benefit.
To buy and hold investors he says: “good luck”.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.