Gold
Been building up my gold (AAAU) position, just reached my max of 10%. I think the fed has stopped hiking, but I expect inflation to increase from 2+ to 3+ percent, while rates eventually go down (maybe in 2H24).
I'm expecting a decade of inflation. And gold is also one of the few things that goes up if China invades Taiwan, so useful as a hedge against the unthinkable.
Bitcoin
Hedgeye's Bitcoin trend turned bullish on 23rd Oct, but its been overbought, so hard to accumulate. Managed to get a 4% position, would go up to 5% (at my buy price). Thats a very high allocation for such a volatile asset - if it was volatility adjusted vs gold, it would be 1 or 2%. But I believe bitcoin won't go to zero.
I am a bit uneasy holding a volatile risk-on asset heading into a market correction and recession. But its been years through the crypto winter and the start of a recovery, so I obey the signal and buy on the trend breakout. Lets see if Bitcoin stops correlating with the Nasdaq.
Outlook
Still think we're in a bear market heading into a recession.
When would I cover my short positions? When everyone knows we are in a recession. A Time magazine cover saying “World in Recession” would be useful. I'd also cover if they drop too much (bear markets don't last forever), or when Hedgeye's trend changes (means I've overstayed my welcome).
2024 is an election year, expect 2H to recover coming out of the recession. Learn to love inflation.
Energy
Energy recently turned bearish in Hedgeye's trend, so I expect it to get worse and may buy more Equinor and CNQ in a few months. Not now.
My Positions
2 comments:
Hi, You've been bearish since early 2022. After 2 years, and the bear market appears to me to be ongoing (many US stocks have fallen.. chopped around low levels), but you're still thinking about an upcoming crash. May I ask if time is a factor in your thesis? What would invalidate it? Thank you!
Its not a "thesis", Hedgeye's outlook is for slowing yoy growth over the next 3 months, and most of their stock/commodity trading signals are bearish. They can change anytime. eg: tech stocks (SMH, XLK, Q's) are now bullish, so I cut loss on those shorts a few days ago.
"still thinking about an upcoming crash." Not really, I think this will be a short correction, after a recession is recognised we get massive stimulus (Nov election). But regardless of what I think, I just follow the signals, the bear will end when it wants to.
I'm still a value investor at heart, if I can find anything cheap and non-cyclical (like TRP), I'll buy. But most things are cyclical and look cheap only against last year's earnings.
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