Correction Recession and then Deflation

Japan, Europe, and the U.S. will be hit by severe deflation in that order due to each country's debt.

With so many potential global land mines it is easy to imagine a major correction sometime this year.
Any major correction will sober investors up and they aren't going to like what they see.

The bottom line is Debt matters and creating more debt debilitates the global economy.

It will be very interesting to see how this unfolds and what will cause the next major correction which is long overdue.

A crash may be more accurate than correction.

OUTLOOK FOR 2015

I sense that 2015 will be a strong year for the US market but for the rest of the world I see more signs of deflation as Prem Watsa has warned of.

Job numbers should average well over 300,000 and the GDP should average close to 3.2%.
The greenback will strengthen while the rest of the world's currencies weaken.

Interest rates will gradually go up but I do mean gradually possibly as early as the spring.

Even though I might lose out on a great year I'm going to stay with cash and Fairfax Financial.

India looks very interesting while China is looking weak. I expect China to be revising their GDP numbers down over the next few years.

China, Japan, and Russia are potential catalysts for causing a major global correction and so I'm stepping back.

I should add that a major correction of at least 15% should be expected. Cash is king!

Wish you all a profitable 2015

2014 Performance +17%

HIG WARRANTS               25%

AIG WARRANTS               21%

HIG COMMON                   16.6%

AIG COMMON                    9.8%

CANADIAN TIRE               22%

FAIRFAX FINANCIAL       43%

SANGAMO                          15%

MORGAN STANLEY         21%

SUN LIFE                             10.5%

THOMPSON REUTERS     14.6%

BANK OF AMERICA         12.5%

BANK OF AMERICA WARRANTS 3.6%


FAIRHOLME -6%

AS ALWAYS I HAVEN'T INCLUDED DIVIDENDS OR TRANSACTION COSTS.

Roughly a 17% average so not bad and not great.