This gets boring and monotonous. Some of you might think ‘how could making money get boring?’ I’ve done this my entire life, for as long as I could remember. When my stupid friends were outside hanging off trees, I was playing ‘stock market games’ with paper and pencil, sort of like Dungeon and Dragons, but for stocks. I’m not a guru or the best trader/investor you’ll ever meet. I like to consider myself a highly functional, competent, person, who is able to cut through the bullshit and see things clearly.
Look, it didn’t take a rocket scientist to figure out the recent struggles in the market were a fiction. Okay? They were concocted by crazy people with small account balances. Now that we’ve received yet another flurry of worse than expected economic data and a subsequent decline in Fed rate hike chances, shorts are scrambling to cover.
September chances are now 12%
Remember, the Fed has NEVER hiked without the market already giving a 100% chance of it happening. Okay?
Even the December rate hike scare mongers are backing off that bet.
So what is the best way to play this?
Stocks? Absolutely not.
Look, if you’re a great trader and can navigate the ups and downs, go for it. But most advisors I know are bumbling fools and do not have the flexibility with their books to trade too often. Most advisors take positions and rebalance once per quarter or once per month. For those of you running money, just reflect upon what has worked best in 2016.
Stocks are up 5-6%. Bonds are up 15%. Gold is up triple digits, at least the miners. Utilities and REITs are up anywhere from 15-35%, for the year.
An easy Fed and crazy BOJ and ECB means yields will continue to drop, especially with the backdrop of a weak economy. Growth is non-existent in most areas of the economy. From my vantage point, the highest growth opportunities lie in the uncertain nature of the economy and political landscape. If QE is the best central banks can do to give GDP a jolt, then you have no choice than to own the one asset that is the alternative and hedge against volatile FX markets.
Gold.
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Biotechs and 3x levered ETNs are my preferred cash burning vehicles.
Duhn duhn duhnnnnnnnnnn…
Yup. Gold. Nuff said.
Can you hold my hand on this one… What’s the best way to own gold ?
GDX
I must say, Trump is coming off extremely well on this John Paulson hosted q&a at the econ club in NYC. I thought he sucked big time on CBS 60 minutes, maybe because how they edited the thing but he is gonna kick that old woman down the steps with this one.
Question – you mentioned chances of a Sept hike are down to 12%, but that is for a 50-75 bps hike. The watch tool shows 88% for a 25-50 bps hike and this number has been rising slowly over the past week. Are you thinking that IF they raise rates, they wouldn’t bother with a mere 25 bps and would be more likely to do 50?
Current fed funds rate is 0.50. The 12% reflects a 25bps move