Gold Projected to Beat the Market in 2020: CLSA

Gold will outperform the S&P 500 Index in 2020. That’s one of several projections made by CLSA in its just-released “Global Surprises 2020” report.

The Hong Kong investment firm has an impressive track record when it comes to making market predictions—last year it had a 70 percent hit rate—so it may be prudent to take this one seriously.

I’ll have more to say on this in a moment. First I want to share with you an eye-opening conversation I had this week at Harvard Business School (HBS), where I’ve been attending the annual CEO Presidents’ Seminar and going over case studies involving Netflix, Amazon and more.

As you know, the coronavirus has disrupted day-to-day life in many parts of China and the surrounding region. That includes Hong Kong, whose economy is being served a one-two punch from not just the outbreak but, before that, the months-long protests.

It was the latter topic that I discussed with Patrick Wang, billionaire chairman and CEO of Hong Kong-based Johnson Electric, who happened to serve as my team leader at Harvard. Patrick managed to escape China many years ago with small bricks of gold, and later studied electrical engineering at Purdue University in Chicago.

Patrick brought to my attention that the Hong Kong protests go much deeper than a local spat between young college students and the police. Global forces have gotten involved and are actively financing the side they hope to see “win.”

A large number of the protesters, for instance, received training in Oslo, Norway—at the Oslo Freedom Forum—on how best to mobilize activists, keep ranks, deal with police and more. They returned to Hong Kong with a new set of strategies that perpetuated their demonstrations for months, until the coronavirus outbreak brought things to a halt.

Not only that, but the Hong Kong activists’ strategies are being embraced and mimicked by other demonstrators around the world, including those in Spain’s Catalan region. As Patrick said, young activists there, who seek independence from Spain, have lately copied many of the Hongkongers’ techniques, going so far as to march with umbrellas and occupy Barcelona’s international airport.

Of course, this level of organization and training requires financing from someone with deep pockets. Patrick believes it could be George Soros, who has a history of supporting similar civil movements around the globe through his Open Society Foundations.

At his annual dinner at the World Economic Forum (WEF) in Davos, Switzerland, the 89-year-old billionaire investor praised the Hong Kong protesters, telling attendees that it’s been a “most successful rebellion,” and that it has “the overwhelming support of the population.”

I don’t know if Soros is personally involved, but it’s worth reminding readers that back in 1998, he tried and failed to break the Hong Kong dollar’s peg to the U.S. dollar. Could he be trying the same right now? Again, I don’t know, but it raises additional uncertainty as well as the question of how much is happening behind the scenes.