5th May, 2017
A Plate of Hidden Surprises
What’s on the menu this spring…? Oh no, not politics again! Every time the TV’s on in our house, politicians or chefs seem to dominate. Perhaps cooking is the central theme; one cooks a range of (generally) tasty fare, whilst the other cooks the books… or so it seems.
We certainly have a taster menu of politics to enjoy over the coming months. We start with the French election (this weekend), before the UK election, refinancing of Greek debt, and the German election hit the plate. A selection of hard or soft Brexit negotiations will be served with every course no doubt, and this time, wine will be compulsory not optional, in the form of full bodied alpha red’s; a bottle of Trump, Putin or Kim Jong-un perhaps?
Is society moving away from traditional recipes? Perhaps not; Mr Trump’s first 100 days in office have rendered less change in policy than any other President in US history. What about the European debt crisis? Greece is in a lot of debt – they owe cash to the Italians, who in turn owe the French, who themselves owe the Germans (and so on and so forth). The recipe will of course be spiced with lashings of social media frenzy. It may be enough to provide a taste bud explosion, or are things less exciting than they seem?
Take the Greek debt situation for example. Imagine you are a tourist at the reception of a hotel in Crete. You would like to spend the night there but first want to check the facilities in the room. The hotelier agrees, but asks you for a €100 refundable deposit beforehand. With the money in hand and whilst you are checking the room, the hotelier runs to the butchers to pay his overdue meat bill. The butcher, who has racked up debt with a local farmer, in turn gets on his bike and rides over to their farm to get back to par. The farmer hasn’t been paying his farm staff for some time, one of which has just got married, so he swiftly ensures his debts are paid. The recently married man owes the same hotel for a honeymoon suite he used last month, so he quickly runs to the hotel and settles his bill. A single €100 of cashflow has wiped out €400 of debts. The moral of the story is that whilst Greek debt levels are problematic, they can and will be renegotiated with the right planning, despite a great deal of media sizzling and stirring.
What is the message of this blog then? For me it’s the usual story – there is a lot of “noise” out there distracting us from the important things going on. From our research we know that there are some very tasty opportunities in selected European companies at the moment, though the noise would suggest there is a hygiene issue and to be careful. As ever, by doing thorough research we can pick ourselves a quality meal on the cheap right now … and maybe make sufficient profit for you to enjoy a sunshine break in Crete.