I remember when JR talked about shorting the home builders and thought at the time that was a pretty good bet, especially given the time frame.
But the crazy thing, in my mind, is that even though we’re two years closer to the “inevitable” market correction things seem muddier than ever to me.
About a third of the country are hopeful and happy now (and probably have most of the investment funds) and that kind of sentiment could extend things for even longer.
I like the idea of shorting about 5-10%, but personally I have more confidence that gold and the miners have a much better than even chance of going up significantly going forward.
Not only do they capture the bullish sentiment that seems to be in play, but I think gold in particular will continue to “rise” (in dollar terms) for several reasons, and the miners as a group are one of the only stock classes that isn’t over- (or even fairly) valued, and that increases the likelihood of an outsized upside both near and long term. Similarly for commodities and resource stocks, but less so.
Financially speaking, the miners are a leverage play on the gold price, and I think it’s heading higher for several macro and structural reasons.
For one thing, there are many reasons why the US dollar needs to weaken relative to other currencies, and Trump is trying to do that. The trade deficit needs to go down for the tariffs to work as intended, and a weaker dollar will make US exports more affordable. A weaker dollar would be reflected by a higher gold price (but also price inflation.)
Another thing I think Trump will get around to is looking at the “balance sheet” of the US and seeing that it has many assets that aren’t priced “mark-to-market.” Things like government owned land and - importantly - gold. Doing that would reduce net US liabilities (aka the national debt) by many trillions, at least on paper.
I think it’s also possible that Trump might re-establish a gold standard for the dollar as a way to deal with the de-dollarization efforts globally. It’s highly debatable what the gold price would have to be to back the dollar but even the most simplistic estimates would put it well over $10,000 per ounce. Just imagine if that is “leaked”: Gold would go up even if backing never occurs. In fact, that could be a great (and most sound) way to determine the “true” gold price. The market would decide, just like interest rates should be established.
The phrase 'The End is Nigh' derives from a man who could often be seen walking up and down London's Oxford Street wearing a sandwich board, or carrying a placard on a pole, bearing the phrase.
Don't be like him John.
Has Trumpy given us a date yet for carpet bombing the other 3 nations at the 4 Nations Hockey Tournament?
I remember when JR talked about shorting the home builders and thought at the time that was a pretty good bet, especially given the time frame.
But the crazy thing, in my mind, is that even though we’re two years closer to the “inevitable” market correction things seem muddier than ever to me.
About a third of the country are hopeful and happy now (and probably have most of the investment funds) and that kind of sentiment could extend things for even longer.
I like the idea of shorting about 5-10%, but personally I have more confidence that gold and the miners have a much better than even chance of going up significantly going forward.
Not only do they capture the bullish sentiment that seems to be in play, but I think gold in particular will continue to “rise” (in dollar terms) for several reasons, and the miners as a group are one of the only stock classes that isn’t over- (or even fairly) valued, and that increases the likelihood of an outsized upside both near and long term. Similarly for commodities and resource stocks, but less so.
Financially speaking, the miners are a leverage play on the gold price, and I think it’s heading higher for several macro and structural reasons.
For one thing, there are many reasons why the US dollar needs to weaken relative to other currencies, and Trump is trying to do that. The trade deficit needs to go down for the tariffs to work as intended, and a weaker dollar will make US exports more affordable. A weaker dollar would be reflected by a higher gold price (but also price inflation.)
Another thing I think Trump will get around to is looking at the “balance sheet” of the US and seeing that it has many assets that aren’t priced “mark-to-market.” Things like government owned land and - importantly - gold. Doing that would reduce net US liabilities (aka the national debt) by many trillions, at least on paper.
I think it’s also possible that Trump might re-establish a gold standard for the dollar as a way to deal with the de-dollarization efforts globally. It’s highly debatable what the gold price would have to be to back the dollar but even the most simplistic estimates would put it well over $10,000 per ounce. Just imagine if that is “leaked”: Gold would go up even if backing never occurs. In fact, that could be a great (and most sound) way to determine the “true” gold price. The market would decide, just like interest rates should be established.
The End Is Nigh:
The phrase 'The End is Nigh' derives from a man who could often be seen walking up and down London's Oxford Street wearing a sandwich board, or carrying a placard on a pole, bearing the phrase.
Don't be like him John.
Has Trumpy given us a date yet for carpet bombing the other 3 nations at the 4 Nations Hockey Tournament?
Hmmmm, maybe the end really is nigh.
It’s a great idea. 5% is a low enough number that no one is going broke. I followed you into those KRE puts 👍