The Motley Fool

Massive Uncertainty May Herald Great Depression And Mega Buying Opportunity

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Well, there’s just a few days to go before the Scottish independence referendum…scotland
 
And still nobody in the City has a clue which way the vote will go and what will happen afterwards.
 
Among the experts stating the bleedin’ obvious has been Azad Zangana of Schroders, who claimed: 
 
Investors are rightly concerned… especially as the uncertainty that a YES outcome presents for not only Scotland, but also for the rest of the UK“.
 
In fact, the pundit uncertainty reached a fresh peak when BT chairman Sir Mike Rake trumped every uncertain Square Mile boffin by saying…
 
Inevitably this uncertainty will lead to a slowdown in investment in the UK as a whole as well as Scotland… The uncertainty will last for easily 10 years
 
But even Sir Mike appears only mildly concerned when you consider what David Folkerts-Landau, the chief economist of Deutsche Bank has been predicting. He reckons a Great Depression could be on the way… 
 
A YES vote for Scottish independence on Thursday would go down in history as a political and economic mistake as large as Winston Churchill’s decision in 1925 to return the pound to the Gold Standard or the failure of the Federal Reserve to provide sufficient liquidity to the US banking system, which we now know brought on the Great Depression in the US.
 
These decisions, well-intentioned as they were, contributed to years of depression and suffering and could have been avoided had alternative decisions been taken.
 
Cripes. We might as well just sell everything now, stock up on gold and baked beans, and head for the hills right now…
 
Or head to England.

The paperwork and removal vans may cost £1 billion

Yes, a few banks have already made their minds up and have confirmed they’ll take decisive action if the YES vote wins out.
 
Royal Bank of Scotland, Lloyds Bank, TSB, Clydesdale and Tesco Bank have all declared they’ll be shifting their headquarters to England if Scotland does become independent.
 
RBS blamed “a number of material uncertainties arising from the Scottish referendum vote which could have a bearing on the Bank’s credit ratings, and the fiscal, monetary, legal and regulatory landscape to which it is subject”.
 
And who can blame the banks for moving, when Paul Krugman — a Nobel Prize-winning economist no less — says Scotland is all too likely to end up becoming “Spain without the sunshine”.
 
Be afraid, be very afraid. The risks of going it alone are huge.” he warns.
 
Indeed, the total cost of the paperwork, the removal vans and everything else simply to take just RBS to England could reach £1 billion, according to Chirantan Barua at brokers Bernstein.
 
Of course, that’s £1 billion less profit that could have helped RBS to pay a dividend one day… 

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

Still, in a situation like this, there’s always a silver lining somewhere for someone

For instance, British Airways and easyJet could benefit if a YES vote leads to the Scottish National Party forming an independent government. You see, the SNP have pledged to cut airport taxes.
 
Meanwhile, the BBC perhaps hiving off BBC Scotland could work wonders for STV, the ITV licence holder north of the border.
 
And if you hold dollar-denominated shares and receive dollar-denominated dividends, then a beaten Sterling could leave you quids in. (A doomster over at MoneyWeek says the pound could drop to £1:$1.40 if things become “really chaotic”.)
 
But perhaps the biggest winner here might be YouGov, what with all the frenetic polling putting the market research specialist firmly in the spotlight. YouGov’s latest financial results showed underlying profits up 19%, which have helped the shares rally 24% so far this year.
 
And when you think there is a general election next May — which could be another knife-edge decision – then the small-cap’s trading could remain brisk for some time to come…

The seven-baggers you could have easily bought in the last crash

There may be more silver linings to come. As I said the other day, the effect of any YES outcome cannot be worse than the banking crash of 2008 – and we all survived that.
 
And yet…if David Folkerts-Landau is anything to go by and everybody else starts to think we’re in for a Great Depression after a YES vote, then stocks are likely to get a real thumping…
 
I mean, it could be just like the rampant uncertainty of the credit crunch, when nobody knew what was going on and quality stocks were sold at any old price by investors believing Financial Armageddon had arrived.
 
But when you look back and consider the mega-buying opportunities that occurred back in 2008 and 2009…
 
And how top FTSE 350 names such as ARM, Randgold Resources, Domino’s Pizza, Rotork, Aggreko, Shire and Weir have all surged SEVEN-fold or more since those dark days…
 
Then perhaps very soon there could be another round of mega-bargains on offer if the YES vote wins and market uncertainty hits warp speed.

But you have to be in it to win it, as they say

Because believe me, many investors actually failed to buy in the banking crash.
 
You see, they were either too busy selling and locking in immense losses, vowing never to buy a share again.
 
Or they were waiting for prices to fall even further, and totally missed the sudden recovery.
 
Or they simply slumped into a deep freeze, unable to take action due to being entirely overcome by shock…
 
I mean, the one thing none of us wants to happen is to completely miss another mega buying opportunity and the chance to enjoy substantial long-term capital gains and dividends
 
So if the YES vote does win and share prices do crash and everybody else does start warning about a Great Depression… you’ll know this time what to do.

One Killer Stock For The Cybersecurity Surge

Cybersecurity is surging, with experts predicting that the cybersecurity market will reach US$366 billion by 2028more than double what it is today!

And with that kind of growth, this North American company stands to be the biggest winner.

Because their patented “self-repairing” technology is changing the cybersecurity landscape as we know it…

We think it has the potential to become the next famous tech success story.

In fact, we think it could become as big… or even BIGGER than Shopify.

Click here to see how you can uncover the name of this North American stock that’s taking over Silicon Valley, one device at a time…

Maynard does not own any share mentioned in this article. The Motley Fool has recommended shares in ARM, Domino’s Pizza and Weir, and owns shares in Aggreko and Tesco, the parent of Tesco Bank.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.