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BlackRock does not worry about the stock market recession
BlackRock has $ 6.2 billion of reasons to minimize fears of recession. | Source: Shutterstock
The billionaire investor made his comments to Handelsblatt. Mr. Fink, it seems, is not disturbed by the highly publicized "Fed Pause":
"I do not see any sign of a global recession in the next 12 months … Central banks have relaxed their policy mainly because of the weak fourth quarter of 2018. We will go through a phase in which things are not great, but not bad . "
That's not to say that he's unbridled in his bullish spirit:
"But we are naturally in a late phase of the economic growth cycle."
Obviously, Fink is protecting himself, knowing that the uptrend of the stock market is a bit long in the teeth. Otherwise, investors could take it for granted in the face of growing risks badociated with equities.
Larry Fink can not be bearish if he manages a $ 6.2 billion tanker
Alright, but you can not take those comments as well seriously.
Yes, I think Fink is optimistic, but he has no choice. BlackRock manages $ 6.2 trillion in badets and it would be virtually impossible to maneuver during a period of low liquidity.
It's a bit like an oil tanker that turns off its engines before wanting to stop and has a turning radius of 3 km. Fink will shout "buy!" Before and after the next recession.
BlackRock owned about $ 60 billion of Apple and Microsoft stock at the end of 2018, as well as nearly $ 50 billion from Amazon. That was after a stock market dip that was the worst since the Great Depression.
The engineering of a soft landing on the stock market will be extremely difficult. With the bulk of BlackRock's institutional portfolio in the financial services and technology sectors, they are the most overweight in the most liquid sectors, so, as expected, they are well aware of their situation.
UK customer describes BlackRock's inflexible approach
In fact, this problem becomes even more obvious when you talk to their customers. Speaking under the guise of anonymity, a current BlackRock customer in the United Kingdom (about A $ 80 million) provided the following fascinating intrigues regarding the approaching behemoth investor:
"Despite managing a separate portfolio for us, BlackRock has been reluctant to vary our investment strategy relative to its global position. For example, they were not inclined to discuss the introduction of ethical investments. "
This would take us back to our hypothesis that society has a fairly rigid approach and only wants to treat the most liquid badets. Then there is this:
"BlackRock has had problems mitigating our exposure to UK equities (over 50% of our portfolio), encouraging us to maintain our long-term strategy of maximizing long-term returns. We have been deterred from converting our UK equities into cash because of the cost and time involved in this transaction. "
These comments alone could tell us a little more about Fink's company, but in this context, this is precisely what we are looking for in order to be able to deal with a very dangerous liquidity situation that could arise in the future. to come up.
Jamie Dimon and Larry Fink sing in the same hymnal
Jamie Dimon and Larry Fink sing the same song on the stock market. | Source: REUTERS / Mike Blake
Larry Fink is a bit like a Bitcoin whale at this point. He can buy the troughs and take profits when the market momentum is strongly bullish.
The whale approach is excellent as the market eventually rises higher.
Jamie Dimon has the same prospects as Fink, and we all know he would never have an agenda. BlackRock and JPMorgan would not try to produce liquidity in the final phase to stabilize their highly overbought positions, would they? Of course not! Billionaire Dimon is a blue-collar hero.
A more pronounced downward acceleration and BlackRock could look like Austin Powers making a three-point turn in his golf cart.
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