The global finance and real estate markets are simple creatures. They really are. They are either driven by fear or greed. There is usually no middle ground. Either people are rushing for the exits or they are rushing to get in. Considering this momentum tendency, it is no surprise that the price of oil crashed like it did. It seems that even though all the downward pressure on oil has been around for a while (except the OPEC decision to keep oil volume constant), the pressure didn’t succeed in crashing oil. Only when speculative sentiment turned against oil did it see a crash in value. Keep this in mind when looking at Europe’s current situation. It appears that Europe isn’t looking very good right now. Except for a few bright spots, the Eurozone’s economic performance and GDP growth have a lot to be desired. Indeed, deflation has already kicked in at certain spots in the Eurozone map. The euro is crashing against the dollar and other currencies and it is increasingly beginning to look like Europe will be having a long economic winter ahead of it. What’s there to get excited about?
If you were to play Europe based on market sentiment, you’d have your work cut out for you. It would be very hard to find the nerve to get in when the US market looks so much more attractive. Still, you should pay attention to the smart money and how they view Europe. Don’t pay attention tot what they say. Instead, look at their investments. Based on this metric, investors should give Europe the once over. No less of an astute investor than Hong Kong Billionaire Li Ka Shing is betting big on Europe as evidenced by his forays in Europe. He bought Telefonica’s Irish arm for $1.1 billion. He also bought Austrian mobile wireless spectrum, and is looking into buying wireless businesses in Italy. Judging by these actions, one of the world’s smartest investors is going long on Europe. The smart money has spoken-not with words but with what counts the most-capital outlays. Take note.