Portfolio Update. Broken Record.

 Markets up again, stocks up.

Position changes:

• Sold some South-East Asian stocks.  Moved them into trading the US market.  Buy stuff thats going up.
• Increased exposure to LATAM.
• Reduced crypto, and sold Bitcoin.  Shorted Microstrategy.

Might change these soon:

• Reduce exposure to China and healthcare.  Chin has done well but the next quarter's outlook is negative.  Healthcare keeps getting whipped around by Trump.
• Increase my Microstrategy short, as it rebounds tonight.

I am just buying stuff thats going up and not overbought.  Its boring, and it doesn't give me much to write about, but I'd rather make money.  The stock market is not a place to look for excitement in life.

My aim is to ride the bull market up, then sit out or short the next bear or correction.  Possibly in 2Q26.  If I can do that, I can quit my day job.

Portfolio Update

Market is up, portfolio is following it, so I'm happy:

  - Gold making new highs: My 2 gold royalty stocks (sandstorm and EMX) have received buyout offers, unfortunately shares not cash.  Will probably hold the acquirers' shares - still wanna be long gold and there's not much left in the mid-cap royalty space to buy.  My other gold stock (Equinox) merged with another company, then hit new highs after relasing better than expected results. I got all these from Mining Stock Monkey's substack (he also has a free youtube channel)

  - LATAM all up.  Holding Chile/Columbian banks, waiting for the next election for the governments to turn to the right.  Nubank (Brazil) released excellent results - but next year's election is a coin toss - hold for now.

  - Small China position (Didi) up.  Fundamentally it can still double from here, especially if it can re-list in HK.  I'll hold it till Hedgeye signals to sell (KBA).  China is always a trade for me.

  - My fat-fingered Ethereum trade up bigly.  Will start selling around 5K, or when Hedgeye's signal weakens.

  - Nam Cheong up.

‌

Whats NOT working:

  - SEA.  Indonesia and Malaysia:

     * Indonesia riots.  Will probably sell my longer term Indonesian holding, country is a poor, corrupt powder keg.  Against this, medium term, it'll go up if the USD falls.

     * Hartalega (gloves).  Hit ten year lows!  Probably Trump.  Malaysia has signed a trade deal with Trump (19% tariffs), but they are courting China.  There is political risk here.  Malaysia is the perfect small, inconsequential country for Trump to smack around a bit to show what happens if you sit on the fence....after he's finished with India and Canada.   Not sure if I should keep this one, its hard to value a cyclical.

    * Delfi results sucked as expected, from high cocoa prices.

  - Oil stocks.  Especially CNQ (Canada).  Probably Trump Tariffs again, combined with the newly-elected gay Canadian government - most Canadian oil is exported/refined in the US.  My Norwegian oil stock is flat.  Hedgeye's trend for oil recently went bullish, dunno if it will stay that way.  I can hold these 2 stocks long term.

  - US Gas Pipelines: Flat, paying dividends,fairly valued not over-valued yet.  Just hold.

  - Turkey (TUR), I fucked up, bought a 2% position too high, fomo.  To cut loss.

  - Probably sell my Seatrium, a 1% position too small to monitor.

Quick Update

Sold my Uranium stocks (from June), as Hedgeye's trend turned bearish.  I don't know if its a false signal, but since I bought using Hedgeye's trend signals, I'll sell by them.  Could be from the possibility of peace with Russia.  Made 12% over 2 months, which is OK.

Also sold my small position in LEU, a US uranium enricher which I bought last year.  It was a tiny 0.5% position which went up 3x.  Can't complain.

I bought 8% Ethereum in the brief (couple-of-days) correction at the start of August.  Also bought more IWM and Q's in the current correction.  I want to me more than fully invested for this bull market.  I'm now 119% invested.

Quick Update

Correction

I was caught by surprise, but still think this is a short term correction.  The market went up too far and some FOMO has to be shaken out.  It might be over on Monday, or may last 2 weeks.  Everything still points to the bull continuing: VIX at 20, the economic outlook for the next 6 months, and Trump needing to pump after that.

I am 112% invested.  Bought a little ETH and Q's on Friday.  Would like to load up on more ETH.

Other Risks

Trump's reversal on Russia and the passing of the 'Russia Bill' - giving him authority to levy a 500% tariff on countries that import Russian oil after 8th Aug - are good for oil stocks, but bad for India, China and (maybe) Brazil.  It makes it less likely for a trade deal to be reached, more likely for the world to spilt into different trading blocks.

• Russia produces ~9m bpd, out of approximately 105m bpd used worldwide.
• Trump still wants to keep the oil price down, and the Saudi's will help.  We may see oil up to $100, but I don't see it getting any higher.
• A 50% tariff decreases the chance of a US-China trade deal.  
• Non-Aligned countries, like India/Brazil have more incentive to go over to China's side.
• India hit.  How much of their recent hot GDP growth has been from cheap Russian energy?
• Increases the change of an Iran deal.  Iran is currently not a threat, even to Israel.  Israelis gotta finish their war quickly.  Short term peace in the ME.  Not lasting peace, while the Iranian regime is still around.
• If countries don't buy Russian oil/gas, what happens to it?  Either the pipe/ship it all to countries that don't care (like China), or stop production.
• And if so, Russia runs our of money.  What can they sell?  Gold down?
• Buyers buy from the US instead.  And the whole world wants US LNG ro reduce their bilateral trade deficits.  Longer tanker or LNG Carrier routes.
• What if the US navy starts enforcement against 'dark fleet' ships carrying Russian oil/gas.

My oil stocks should do well.  I have no India exposure, but some China and Brazil.

No Sign of the US Bull Market Ending

 From Hedgeye:

• We're in Quad 2
• Implied Volatility falling.  eg; SPY, IWM, Bitcoin
• 1-month realised SPY vol still below 3-month vol. 
• USD is now rising (short term).  However gold, copper, oil correlations to USD have dropped.  Gold and copper bullish trend.  Oil's trend whipsawing.  Industrial commodities, China, Korea and semis bullish.  The rising USD affects some EMs - they are now short Philippines (which I am still long through the Philippines Stock Exchange), and India (I no longer hold through FIH.U).

Made some short term trades, small positions.  Bought some:

• Crypto stonks
• 1-month calls on IWM.

Most of my Asian stocks are going up.  They're all different, company-by-company.  I'm a few percent over 100% long:

Yes, there are signs of exuberance, especially for tech/AI.  But we haven't seen Hawk Tuah, Cum Rocket or ETH Rock or levels of stupidity yet. No signs the bubble pops yet.  Enjoy it while it lasts.

Buying more

The correction I expected did not happen:

• The Market corrected Monday night, after being overbought
• That night Trump released "Tariff Letters" promising new tariffs by 1st Aug to 14 countries, including Japan, South Korea, Malaysia, Indonesia and Thailand.  But the next day, Asian markets didn't care.  
• The US market recovered the next day, even as Trump promised more Tariff Letters.

When the market doesn't fall on bad news its time to buy.  Last night I bought more Latam stocks and Didi (paid report) - I am finally buying China as there are rumours that Xi has lost power, and they have projected growth this quarter...so if I can find any China stocks I would like to hold, I may as well.  There is a chance they announce that Xi is being given a ceremonial post far away somewhere in August.

Also topping up on silver, and considering some energy related companies.   I am now over 100% invested and would like to reach 110%.  Themes are inflation, commodities and EMs.  And just a little bit of China.

Sandstorm

Sandstorm, one of the gold royalty companies I own, has had a takeover offer.  That is the reason why their price has been continually rising the past month.  The offer, if accepted by 2/3rds of shareholders, will give me shares of Royal Gold in exchange.  I'll probably accept the RGLD shares, either partially or fully.

Cut back some exposure

Cut back some exposure, because there may be a correction next month.  Hedgeye is signalling a probable quad 4 for July.  And Trump's 90-day tariff pause ends on the 8th.   Trump needs to be tougher to remove his chicken label.  The market is ignoring this now.  

Sold Bitcoin & Mexico at small profits.  And adding a small short position.

If we get a correction - and I am not sure - then I think its a quick one, and a buying opportunity

Quick Update. Oil, Gold, Uranium, Poland.

Quick Update.  Showing how I use the Hedgeye signals to choose when to buy and sell.

Oil

Hedgeye's trend signals for WTI/Brent went bullish on 10th June, I bought 1% Var Energi.  Like magic, oil shot up two days later:

My quick thoughts:

• The Saudis are still over supplying oil, Iran only exports 1m+ bpd (officially?), so I don't expect the spike to go higher.  No hundred dollars oil.
• Israel and Iran are too far apart to fight a real war.  Don't think Israel will hit Iran's oil export facilities, as this may damage Saudi tacit support.  Don't think Israel can stop Iran getting nuclear weapons.  This is existential for them, so they gotta try anyway.  They may be attempting regime change.  Long term, this can go any number of ways: 1) Iran regime change, oil down short term, middle-east boom, oil up long term.  2) Iran makes deal, back to status quo.  3) Iran tests and deploys nuclear device, quickly followed by the Saudis.

Now holding ~10.5% oil stocks: Var Energi and CNQ.  Long term I think we have a shortage of oil, but there may be a glut between now and then.

Gold

Bought a gold miner after it dipped on bad Q1 results, and increased my exposure to another royalty company.  Will buy a bit more.  GDX is still bullish Hedgeye trend, but flip-flops a bit.  Maybe because the trend has been bullish so long that everyone knows about it.  Long term I'm still bullish gold and gold miners.  Now holding 11.5% gold miners/royalties.

I subscribe to Mining Stock Monkey for fundamental analysis of gold stocks to buy.

Uranium

I find the best Hedgeye signals are bearish-to-bullish ones after a long bear market.  For example:

Didn't buy URA itself, instead I subscribed to Uranium Insider and bought a bunch of Uranium stocks.  Which are up more than URA.

Poland.  And GPW.

Hedgeye's trend signal for Poland (EPOL) went bearish recently.  GPW (Poland stock exchange) tracks this quite well.  I've been holding it since I bought it just before the Ukraine invasion.  Do I keep holding?  Hedgeye signals can flip-flop a bit - if it was something I wanted to sell I would sell now, but thats not the case here.  It has reasonable fundamentals, so I could buy-and-hold:

• Typical stock exchange: most costs are fixed, so as revenue increases, profits increase more.  And vice versa.
• Pays out 80-90% of its earnings as dividends.  So its not a compounder but does reward shareholders.
• The real question for me is valuation.  Its at a 2024 PE of 15, but 1Q EPS is up 27%.  So the PE might be 11 or 12-ish.  But possibly at the cycle peak.

Honestly, I'm not sure, its not a definite buy or sell here.  I'll probably sell, theres stuff with more upside I can buy as we continue into growth/stagflation for the next few quarters.

Portfolio Update

 Since previous update:

• Increased BTC to 5%.  Bitcoin has since blasted off.  To me, Bitcoin is always a trade, based on Hedgeye's trend signals.
• Sold Equinox Gold (miner), as GDX went bearish trend in Hedgeye.  This has been my weakest performing gold stock.   Gold itself (GLD) is also no longer bullish trend.  Kept Sandstorm (gold royalty company), which I'll hold through the cycle.  Since gold has gone up for about a year-and-a-half, it may spend a few months/quarters consolidating or correcting.  Like Uranium did.
• Bought EWW.  A trade.
• Bought a couple of Latam banks.
• Sold my holdings in SPUT Uranium, the physical Uranium trust, and replaced it with a basket of YOLO Uranium miners.  Higher beta.  Hopefully these companies will one day be able to mine something.
  

I am 100% invested, and everything I have is going up.  Except oil and Hartalega.  Its 'risk on' as we head into June.  July might be a bad month, I'll probably just hold through it depending on the Hedgeye trend signals.

Longer term, the bigger risk is NOT being invested.

Quick Updates

 I was expecting a slowdown, and for the bear market to continue, but it has not:

• Covered all my shorts yesterday.
• Have gone long bitcoin, as a trade, still adding to it.  It broke out 2 weeks ago.  Lets see how long it continues.
• Bought 5%
  position in Fairfax India (paid link).  India is doing well, with a 5% real growth rate.
• I had some some WMB and KMI during the downturn.  Yesterday bought 3% in a Latam Gas pipeline company.  Its around 1/2 the valuation of WMB, and has more growth potential.  More risk though.

Still 8% cash and looking for stuff to buy.

My timing hasn't been great, I didn't buy the dip.  But thats the cost of missing big bear markets.

Quick Updates

1. In the last 2 weeks I went short Mag 7.  Its only a 5% position.  In the green now.  I'll write more about it if its successful.  Happy abut it so far, though it doesn't provide much of a hedge when the markets puke.
2. Raised some cash.  Sold Diageo, and a little KMI, WMB, GPW. Now I have 20% cash (excluding the cash from shorts).  I might buy back those same companies later.
3. Building a shopping list.  Of falling knives I can catch if the turmoil goes on.
4. Bitcoin looks interesting.  As a trade.
5. Gold is overbought, so I will sell my weakest gold company (GROY) here.  After that, I'll have 9% allocated to gold miners/royalties.  And 24% cash.   I may buy some small cap gold companies.  As the rally extends, smaller companies get swept up in it.

I think the bear market continues for a few months, until the first trade deal is worked out.  I think it takes a while, maybe more than the 90 days.  Even for reasonable friendly countries like Japan, Poland or India.  All sides are negotiating to set their countries up for the next 50 or 100 years - this is like NAFTA, WTO or Bretton Woods.  3 months is not realistic for negotiations covering currencies, trade surpluses and defence.  And these negotiations probably break the EU.

And the US was heading into a slowdown anyway, as Biden's endless stimulus was turned off.  Meanwhile a lot of US small business reduce operations due to increased working capital requirements from tariffs. Adjustment takes time.

If everything works, I expect a recovery starting 3Q or 4Q, and a boom next year.  Trump is trying to serve the medicine now, to make the patient better by Nov 2026.

--- Update 23rd April ---

Used proceeds from the GROY sale to buy more Sandstorm, Equinox and a small cap royalty company.  Gold is still strongly trending.

Also bought 1% bitcoin, though its overbought.

Now I'm 19% in cash.  Look to cover my shorts on the next dip.

Going short

I've entered some short positions on last weeks rebound. I'm ~9% short, mostly Mag7, Energy and BTC.  I'm 96% long vs 9% short.

I don't know weather the rebound lasts only for a week, or a few weeks.  I'm prepared to short more.  Best guess so far is that this is a slowdown over 1H25, probably not a recession.

Thank God for daylight saving.

Edit 18-Mar: Now 16% short, 4% cash, 96% long.  The shorts are mostly Mag7, followed by Energy, and a little BTC.  I don't know how long the rebound lasts, it could go on another few weeks.

Edit 30-Mar: Covered my energy and bTC short 2 weeks ago as the Hedgeye signals changed.  Covered remaining shorts last week at a small loss.  A kangaroo market may be changing into a bull market. It I want to re-short, NVDA is the weakest of the Mag7. 

As of 30th March, YTD performance is OK.  My portfolio correlates with SPY.  Biggest gainers have been WMB and KMI due to soaring natty.  Biggest loser is Harta.

Where are we in the Palm Oil Cycle? Sold United Plantations.

I've been holding United Plantations (KLSE:2089) and valuations are looking stretched.  At RM3/share, its got a PE of 20 at an ASP of RM 4.2K per tonne.  A 5% yield at a 99% payout ratio.

Should I keep holding?  The key is the price of palm oil.  Can we predict it?

Demand has too many moving parts:

• Economic growth
• Price of substitute oils (eg: rapeseed, sunflower, soybean)
• Biodiesel

Supply is easier.  Palm oil trees produce no fruit for the first two years, then rapidly increase production until they are 5-6 years old:

Source: MP Evans

So a supply response from newly planted trees takes 3-6 years to hit the market.  Usually when a commodity's price skyrockets, people are incentivised to produce more.  But in the short term, prices move higher due to the delay in bring on new production.  The supply response, delayed at first, eventually leads to a glut.  High prices are the cure for high prices.

Have we seen the start of a supply response yet?

The two main suppliers are Indonesia with 2/3rds global production, and Malaysia with 1/3rd:

• Indonesia had a moratorium on new plantation from 2018 to 2021.  Land use grew 2% over that period (p21).  In 2022 it grew 4.9%, in 2023 3.8%.  We don't have 2024's numbers yet.  Palm oil from the 2022 trees should start hitting the market now.  

Source: Indonesian Oil Palm Statistics 2023 (BPS Statistics Indonesia)

• The Indonesian President urged massive expansion of oil palm plantations early this year, but if implemented, the supply from this won't hit for at least another 2 years.

• Malaysia has not planted new trees, but has decreased its palm oil plantation size (down 4% from 2020 to 2024).  Production fell 3% in that period.  Malaysia has decided to focus on sustainability and productivity, instead of plantation size.

So Malaysia has no increase in production, and decreasing plantation size.  Indonesia had a 4.9% increase in plantation size in 2022: oil from those plants should start tricking in to the market this year and increase for the next 4 years.

Conclusion

• There's no obvious massive flood of palm oil coming yet.  But we've seen the start of the supply response.  If Indonesia did ramp up in 2024 and keeps doing so this year, I may be shorting palm oil stocks in a few years time.
• At a PE of 20, too much good news is priced in for United Plantations.  With a 99% payout ratio, its not a compounder, just a cyclical.

Sold my shares in UP at RM 23.10.  Profit was around 160% over 4 and a half years, including dividends.  Its been a good run.

I was thinking of only selling half, as the Palm Oil Bull market may still have some legs.  But decided to sell all as the US market and economy looks shaky.

References:

• Google for "Indonesia Oil Palm Statistics 202X". (eg: 2023)
• Google for "MPOB Overview of Malaysian palm oil industry" (eg: 2023's result)
• Alternative production and land use figures from the US FAS.  You can Select "Indonesia or Malaysia" and Palm Oil".

Portfolio

After the market euphoria of Trump's Election has faded, we are looking at slowing growth and inflation.  I don't know how long for.  I'm rebalancing my portfolio away from commodities and towards towards poor corrupt growing countries EMs.  It depends on what stocks I can find.  Now I'm a quarter in EMs:

I'd consider shorting the US market, but too busy at work to stay up and place trades.  US market hours interfere with my sleep cycle.  Much as I would love to gain experience shorting - I need to make money in all markets - its not worth it now.

Bought Pakuwon Jati

Pakuwon Jati is an Indonesian real estate company that develops and sells residential properties, while keeping and renting out the malls they surround.  A good (free) 2021 deep dive is from Asian Century Stocks.  Since then the've moved into a net debt position.  In their most recent 9 months, recurring income (mall/office rental, management fees and hotels) was 80% of their earnings.  Half their income is from Surabaya, around 40% from Jakarta, and 8% from Yogyakarta.  Most of their recurring income is from large, new malls, with a few hotels and offices.

At IDR 420, it trades at ~11X recurring earnings (ie: ignoring property sales).  Why is it cheap?  Indonesia has been hammered (along with high USD debt countries India, Thailand, Philippines) by a high USD in the Trump rally.  I think this is reversing now, and emerging markets catch a break.  I bought just before/after it broke out at an average cost of IDR 403.

How can I lose money buying property at 11X rental earnings in a country with a growing population and 5% real GDP growth?

• Indonesian political risk and corrpution.  Its a fledgling democracy and the new president is from the military.
• Jakarta and Surabaya malls have an occupancy rate of around 75%.  All except one of Pakuwon Jati's malls has occupancy rates in the 90's (slide 6), probably because they are big and new.
• Indonesia is a twin deficit country, the currency constantly depreciates.  Except when commodity prices are high.  Too much of my portfolio is based on commodities.
• Family controlled companies don't have to act in the best interest of shareholder, and Asian ones don't even have to pretend to.  So far Pakuwon Jati has been OK - they've been growing the company while paying a small 2% trailing dividend.  They said dividends will be "much larger" this year.  The founder's age is a risk, what happens when control is transferred to the rest of the family?
• In the short term (weeks or months), a US market crash (Mag7 bubble bursting, with VIX in the 30's) could drag down the rest of the world's stock markets.

Its 4% of my portfolio, which I'm comfortable with, given the above risks.  Might go up to 5% if I get a chance.

Other Notes:

• Property sales are recognised when the property is transferred.  Not by percentage of completion.  Makes it more lumpy.
• GIC held a stake until 2015.

Bought more GPW

Bought more of the Polish stock exchange (GPW), 1% last Monday as it fell, and 2% last night, as Poland moved into Hedgeye's bullish trend.  Now its a 5% position in a boring, cyclical exchange-type business that pays 80% of its earnings as dividends.

Considerations:

• Europe has been in recession for the past three years, and is now moving into a period of higher growth.  Poland should benefit from a Ukraine peace deal.
• The post-election Trump euphoria for both the USD and Mag7 has reversed.  Now its tariffs and DODGE.  And a lower USD, starting with lower interest rates.  I am looking to increase my EM exposure, especially countries with high USD debt (Indonesia, Philippines).
• Risk off.  Bursting of the Mag7/crypto/momo bubble may drag the other S&P 493 stocks down with it.  If its messy enough, with VIX in the 30's, it may drag the rest of the world's markets down too.  I am betting such a mess would be over in a month or two.
• Moving to disinflation.  Instead of buying commodity producers, I'm looking for companies that use commodities.
• Energy is getting killed.  Especially my Canadian energy (CNQ).
• My US oil pipelines are moving down slowly, though I intend to hold them long term.  Should benefit from a re-industrialising US in years to come, but it may be a bumpy patch in the next few months.  These stocks have an outsized impact on my portfolio because they've grown so much.
• Hartalega got killed by worse-than-expected results.  The position has moved from a 100K profit to a loss.  Its more volatile than bitcoin.  Win some, lose some.

Rough allocation:

Sold SCCO

Long term I am no longer bullish on copper:

• China housing bust
• Solar panes and wind farms are now uneconomic.  Switch to natty and nuclear.
• Hybrid vehicles are growing faster than EVs.  

Sold my 2% Southern Copper corporation this week, as Hedgeye's copper signal went bearish.  Unfortunately it went bullish a few days after.  Short term, shit happens.  Longer term, I'm not interested in a company trading at a 20+ PE (with copper at $4+).

Am now 2.5% cash.  Expecting a dip in the market in Feb/March, looking for things to buy:

• Platinum: Its trading below its cost of production, like Uranium was years ago.  But not low enough.  Uranium was trading at 1/3rd of its marginal production cost in the early 2020's.  Platinum is around 30-40% below the South African producers' AISC (est. USD 1200 to 1300).
• EMs (ex China).  I've got some Latam stocks, now looking at SEA.  eg: Pakuwon Jati.  Indonesia and the Philippines are cheap, and Malaysia has high projected GDP growth in the next few quarters.  But there's no rush.  Unlike Latam (upcoming 2025/26 elections), SEA does not have a catalyst.  EMs have underperformed for years, and we are still in the USD-up-EMs-down phase of the Trump rally.

Small update: Bought Latam stocks and Sandstorm

Bought 3 stocks in a Latam country, 1% each:

• Single digit PEs.  Where the PE can be counted on one hand.  Double digit dividends.
• May go up 2-3X when the political situation normalises, elections in 1 or 2 years.
• Small chance that the political situation goes to shit and they go to zero.

I want to increase holdings in EMs (ex China).  I think we get a falling USD over the long term, and go up after years of underperformance.  But no rush....its years of underperformance, so could easily go on another year.

A sudden fall in USD (like 10% from a "Mar-Largo accord") is not something I'm well positioned for.   Nearly 40% of my portfolio is domestic US companies.  The US could alternatively unilaterally devalue its currency (printing money and buying bonds) over the next year.

Bought another 1% of Sandstorm Gold.  A company that has future streams of gold and current debt is another way to play a falling USD.