Saturday, March 2, 2024

Quick Updates: Risk On.

Bullish.  Now 99% invested:

  • Bought more bitcoin 2 weeks ago, up to 5% allocation (buy price).  Bitcoin shot up after that.  This is a trade, follow the Hedgeye trend signals.  I am not willing to hold thru the cycle.
  • Added small 1% position in Oil Tankers.  There is an upcoming shortage of VLCCs (22:00 to 28:40).  Its only a 1% position so I can average down later.  Risks are that 1) We may have a recession, 2025 onwards.  2) Rates are now artificially high from Red Sea Houthi Attacks, these will probably be resolved this year, so rates may drop.  3) From the chart, its not at the bottom now.

These don't invalidate the thesis but delay it, so I may get a better price later. 
Need to remind myself that this is cyclical, not a dividend play.  Don't hold forever.
  • Copper turned bullish in Hedgeye's trend signal last week.  I added 1% FCX as the highest beta copper play. Want to add another 1%.  Copper is a risk-on inflation hedge.  But FCX is a trade, won't hold it through the cycle.

Long term I expect a decade of inflation.  Every position (except Delfi) reflects this.  Medium term it may alternate between growth-inflation (risk-on) and stagflation (risk-off).

Can't shake the feeling that we passed over a recession that we should have had, and some parts of the market are looking bubbly (middle-of-bubble in AI, and start-of-bubble in crypto).  But I think no downturn till after the election.  I am guessing that bursting the bubble would lead to unrelated stocks (like mine) selling off by 10-15% - a buying opportunity before they recover.  But I don't want to sit out the bull market because of a possible 10-15% correction in a few years.

Other notes:
  • Delfi reported bad results due to higher cocoa prices, stock is down almost 10%.
  • United plantations reported good results, stock up 10%.  Too bad my position was half the size of Delfi.
  • Uranium needs to cool off after $100 excitement.  Fundamentally there may be a shortage of enrichment capacity that stops utilities buying.  I'll keep holding SPUT, its down almost 25% from its peak.  Gotta shake out the laser-eyed speculators.
  • Hedgeye turned bullish on China, for the first time in years.  I am not buying, partially because I got no cash left.  If I did, it would be a trade.

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