2024 Davos Highlights Thus Far

Every year in January, government leaders and top executives gather around in Davos, Switzerland. They call it the World Economic Forum (WEF).

Lately, it has become the harbinger of globalization and the ultimate destination to meet key people in the governments of other countries. That is the main advantage - the people you'll be able to meet.

The main drawback is the agenda. People do not like the fact that the WEF influences the leaders of sovereign countries. And maybe countries are not as sovereign as we think.

Anyway, I think it is very important to take note of events like this because they often foreshadow how things will shape up in the year globally.

The theme for this year's WEF is Rebuilding Trust. Well, I wish them good luck with that. That trust has been shattered, not broken. Anyway, here are the 5 highlights of the events thus far:

1. Doers Are Optimistic, Thinkers Are Pessimistic

All the CEOs, executives, and everyone running a business tend to be optimistic about the global economy. However, economists, academics, and some investors are worried about the global economy.

This seems to be a trend this year. There is a narrative that business people are optimists because they are selling something. You don't want to be telling people things are bad when you have things to sell.

You could also argue that economists and academics are always gloomy. Even investors too - it is their job to look at what could go wrong.

But this time, there seems to be a sharp contrast and a fine line of divide between the two groups. So, who do you believe? The doers or the thinkers?

I guess it depends on which one you are. If you are an investor, pay more attention to the thinkers. If you are an entrepreneur, pay more attention to the doers. However, never totally disregard the argument of the other group unless you believe it has no basis.

I still think it will be a bearish year, and the bears will fully kick in when the central banks start cutting rates.

2. Geopolitics Isn't Changing

Ukraine is asking for a peace deal, but without inviting Russia. I guess they are still on their pipe dream. The Red Sea situation doesn't look like it can be calmed from Davos. And even though Israel and Iran's dignitaries are in Davos, it is uncertain if there will be any de-escalation talks.

The most powerful person in the global economy right now is not going to be at Davos this year. And that is US Treasury Secretary, Janet Yellen. That says a great deal.

So, I don't expect geopolitics to change. At least, I don't expect it to change significantly. I would be surprised if there is any significant change.

3. China is Selling Hard

With foreign investors fleeing China over the last couple of months and China needing to stimulate the economy (which Beijing is reluctant to do), China came to Davos with a strong pitch. China is pitching a 5% growth rate in 2024. But investors are still skeptical because of the economic tensions with the US.

If I were flush with capital right now (to invest), I would look to China. Investing requires being brave when everybody isn't. Not that I expect double-digit growth from the Asian country. Instead, I think the long-term prospects of the country still remain very strong. However, I will carefully pick which sectors I invest in and which sectors to avoid.

Now that foreign direct investment to China is drying up, if I were at Davos I would be making a deal right now with the delegates from China.

4. Argentina's President Delivered a Fire Speech

I had to watch the whole speech. It was really good. It highlights the merits of a free market economy and capitalism. And it confidently bashes the collectivist mindset that is creeping into the Western world.

I had to watch a version on Twitter where an AI translated the whole thing into English. It is worth watching if you are a fan of capitalism and the free market.

Just type it into Google and you find the video.

5. Trump 2.0

This is by far the elephant in the room. With Donald Trump winning more than 50% of votes in the Iowa Republican Primary, everyone suddenly became alert that he might be coming back to the White House.

To some, that is good news. But to most people in Davos, that is not good news. So, it has become the underpinning story going around. People are more animated to talk about it off-camera than on camera though.

Trump returning to the White House means a lot of things for the global economy. It could signal a whole host of changes in the way things are today.

However, what I will say here is that four years can go by very fast. What really matters is the direction of America for the foreseeable future. And for now, I continue to see a divided America. Even if Trump wins the White House, his party will probably lose either the Senate or the House or both. And this will make the tug-of-war continue.

Conclusion

I won't draw conclusions from all the highlights and events for now. Things can take a turn at any time. And any tentative agreement reached in Davos usually takes time to go into implementation. But we will see where it all ends up this year.

Here are the 5 highlights thus far:

1. Doers are optimistic, thinkers are pessimistic

2. Geopolitics isn't changing

3. China is selling hard

4. Argentina's president delivered a fire speech

5. Trump 2.0

Stay rich.

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