Quick Update - scary correction

After rising 1%  *per week* for several months due to rising inflation, my portfolio dived 1.5% last night.   Think its just the inevitable shakeout as the inflation trade became too crowded.  Last night, correlations went to one:

Sold all my bitcoin early last night as it was breaking Hedgeye trend.  I made decent money on bitcoin, over 25% in ten weeks on a 5% position.  For me BTC is purely for trading, not to HODL.

I bought some gold positions in past few days.  4% Gold, 1% Sandstorm and 1% GDX.  The stocks got crushed a couple of percent last night along with everything else.  Want to use the correction to buy more gold miners.  Keep positions small as I'm late to the party.

Short term, a lot depends on what Powell does tmr at 2pm.  Its his last chance to do anything before the Nov election.

Quick Update

Small changes around the margins:

• Sold bitcoin down to a 2% position.  Mixed signals.  I may buy it back, leave it, or sell it all.
• Cut platinum from 2% to 1%, not working compared to copper, silver and gold.
• Bought 0.5% position in Nickel Miners ETF (NIKL).  May buy some more.
• Bought 2% gold.  Would like to buy gold miners.

Long inflation.  Hedgeye predicts 9 months of rising yoy inflation.  I want to own a basket of commodities that perform well in inflation:

Source: Exhibit 9, The Best Strategies for Inflationary Times

Primarily Energy, but don't overdo it cause theres only a small sample size (8 cases above), and every time can be different.  So added precious and industrials.  Tough to own ags/softs/livestock or their producers, though I have United Plantations (palm oil).  I expect energy to perform well regardless of growth.  Gold to do better in stagflation.  And industrials to do better with inflationary-growth.  

And if I was really brave, I'd be shorting long term bonds to fund it all (see Exhibit 8).

Portfolio Update

An eventful month.

Bitcoin

Sold half my Bitcoin on Thurs night.  It *was* weakening, along with Tech.  And other Crypto like ETH were already trending down.  Bitcoin could be the "last man standing".

I am trading Bitcoin based on Hedgeye's trend signals.  I believe in Bitcoin as a stable, distributed network and an alternative to fiat.  But I don't have the balls to buy-and-hold something that can drop 70% in a cycle while generating no cashflow or dividends.  Hedgeye's signals keep you in for most of the uptrend and out of the downside.  Here is an old chart:

I may sell the rest of it or buy it back.  Depends on the signal. 

Market Correction

Market has corrected the past week, while VIX spiked to the high-teens:

I still think this is a short term correction.  But may be a long-term rotation out of tech.  Last night Nvidia was down 10% on no news.  My portfolio was somehow up last night, down 5% from its peak.

Copper and silver were both up last night, both are risk-on commodities.  Bitcoin - the ultimate risk-on commodity - was also up, despite Nvidia's fall.  Signals for higher inflation ahead?

Precious-Industrials

Bought 2% Platinum (2%) and 1% Silver (now holding 2% at my buy price).

Platinum fundamentals are covered nicely by the Modern Investing Substack.  Not buying any producers (eg: Sibayne-Stillwater) because:

• The metal itself is volatile enough, comparable to silver.  They correlated strongly, until silver took off in April, while platinum hasn't followed:

• They're in South Africa, which can't keep the lights on.  A collapse in South Africa would collapse the stocks and drive platinum metal prices higher.
• Don't buy equities when the equities market is correcting.

Tin

Tin spiked 20% since the start of this month:

Malaysia Smelting Corp (MSC) is up 40% since I bought.  Plan to hold as I think we're still in the start of the industrial production up-cycle.  And there are real supply issues.  MSC generates cashflows and pays dividends, so its not something I need to trade in-and-out of.

Bloomberg reports this price spike is due to a single trader's futures positions (click on the tweet's picture, then register with Bloomberg to read for free), causing a short squeeze.  The article is mostly positive tin, but they report high speculative long positions, meaning its due for a short term correction. 

Oil

Added 1% more Var Energi, now that oil has dipped after resolving the fake war between Iran and Israel.

Positions

Still positioned for inflation.  Think the correction will be over in days or weeks: