Now we have benefit of hindsight lets see how good/bad my timing guess on a stocks (russel2000) correction was:
In April i said risk reward was bad with bitcoin at 30k in April, disgustingly accurate how i nailed that high. Also said gold is bad at 2000 shortterm, nailed that high too., crashed to 1800 after. Stocks High was in July Crash was in September and October 5months before that crash i said:" i expect a crash into August in Russel2000 and maby September in Nasdaq" id say i nailed that better than 100% of other forecasters In June, 1month before the high i forecasted that crash again saying:"I wouldnt be surprised to see corrections in price in many stocks from June highs down to July or August/September/October lows" Jap nailed that low. My vision for recession however seems to have been from too far out in the future and hasnt happened yet. Fail. Quote:"And of course im gonna buy the next correction in Crypto sometime in July-November 2023 im a buyer, as i was in 6. January 2023 (expecting the market to anticipate a Fed pivot to a pause)" But at least in this blog i forgot to post the renew crypto purchase, so it cant count to my performance numbers.....FAIL Seems from years of success ive become lazy to post, maby because theres no feedback and because ive already proven to myself that i do beat most other professionals at this game, year in and year out with 0 staff, bursts of work effort when it counts and then months with just 1hour a day of work. And ive already gained the wisdom that flexibility and freedom is worth a lot, and more and more money is pretty much worthless in persuit of happyness. And ive also realized noone can change the world, as human brains will always born in this fucked up way, wired for survival and mating, instead of pease and happyness....so we will ALWAYS fuck up ANY system our wise ancestors have put in place....and Legacy is also bullshit as communists become evil, as rich people become hated capitalists, as spiritual gurus become forgotten or their work stolen and copied, families give birth to spoiled grandchildren, strong christian families give birth to drug addicted hippies, Some people believe we need "fuck you money" whereas i believe we just need to say fuck you to any product we dont really need. If we can train our brain to not need distraction, and simlify our lives extremely and keep some valuable social contacts around, then we really dont need much effort to keep our lives balanced and financed. Ferrari -) public transport -) just dont go anywhere cause you live in a beautiful place Paying lots for wagyu steaks every day as i do -) just cook tough meat in a pressure cooker for 1 hour til its like jelly -) grow and smoke your own fish. Most USA Stocks have been ripping, pricing out any hard or soft landing
quoting myself from april: "finally come here to give my guess how this might go down: So if May is a high in the Russel2000 , nasdaq potentially high in june, if we get this setup, then from there i expect a crash into August in Russel2000 and maby September in Nasdaq" d
So now its June and we did get the high in the Nasdaq! :) First part of my prediction correct, now will we get a correction/crash and when? I think the economy of USA and other countries(germany,sweden and more) will slip into recession towards the end of the year, and i think some stocks will price that in, the problem is, rates will also come down as i expect inflation to come down. So i wouldnt look in growth stocks for problems, rather in the Russel. But the russel2000 kinda has priced in a recession by making new lows in May when measured in Swiss Francs and staying at its lows in USD for 6 months~ so i wouldnt short it either, people are already too bearish on the RUT russell2000 index So then i wouldnt be surprised to see corrections in price in many stocks from June highs down to July or August/September/October lows And how i would invest here in June 2023 is, just wait in Bonds but this time not short term bonds, rather instead taking the currency risk and the duration risk as now yields are very high, so choose something like a 2y-5y Bond and then continue to sell it at a profit if an attractive buying oportunity develops in a stock that i like, sometime from July-November Then 2024 i expect to be a great year, where people will invest based on the belief that liquidity gets injected, and it probably will be. And i think returns will be good. So this is really the last chance to pickup assets for a good price, when they price in the recession more and more as we head towards the end of 2023. But like i said, rates will come down, so growth stocks might be repriced higher because of that. But other stocks who see actual earings declines continuing or get close to bankruptcy will be pricing in the recession more. Also many market participants will be surprised that the central banks are not stepping in, not printing money, rather prefer to watch the recession begin in ernest and focus on lagging inflation metrics. In Junk Bonds id expect to have a good chance to see their yields spreads (difference between US treasury yields vs Junk Bond yields) rise. And of course im gonna buy the next correction in Crypto sometime in July-November 2023 im a buyer, as i was in 6. January 2023 (expecting the market to anticipate a Fed pivot to a pause) So im officially putting a Bond trade on. Buying half 2y Bonds and half 5y Bonds here in 4.June2023 But lazy to do the math for those paltry returns. From my analysis it looks like Risk / Reward is pretty bad for being long Risk Assets right now
Bitcoin at 30.000 4 days ago SP500 double top at 4170 4 days ago Gold at 2000 usd I think the prudent thing to do is just be in cash or very short maturity Bonds right now And wait for a buying oportunity in June-September timeframe I think the chatter about recession will increase from now on again, even dough service sector is still very strong. January2023 i warned about Banks and Credit Risk, suddenly two months later many big banks nearly went bankrubt, due to bankruns, it seems millions of people read my blog haha
i still expect growth to slow and liquidity to tighten, so its high risk to own any risk assets so im now only in Bonds that i intend to hold til maturity (so only USD currency risk)
by july the narrative should have shifted negatively enough to be a buyer again but now i sell the whole crypto position bought 15k usd ETH at 1269 on 6. January and selling here at 1600 thats 3900usd gains or 3,9% of whole portfolio Adding the Bond yield Profits this is already looking like im gonna beat most Money Managers yearly performance again and its only February and i had 80% Bonds haha they are just that bad at their job Quote: "However, in 2022 while the S&P 500 is down 15.5% year to date through Nov. 25, hedge funds as a whole have outperformed. Year to date through Nov. 25, the Barclay Hedge Fund Index, which tracks the net returns of 3,040 funds, is only down 9.6%." I hope they arent starting to be proud when loosing money lol, literally being in short duration Treasuries during rate hiking cycle was too hard for them to figure out? Or oil stocks during War? Or Gold stocks during War with Russia? Or Cash? like....seriously down 9% the whole year? Like, every month, oh were wrong, next month, oh were still wrong, oh lest not change our strategy its going so well, look were outperforming the index hahahahaha 4th best performing Hedgefund 2022 was : "Chris Rokos’ Rokos Macro Fund tallied in at #4, surging 51% after losing 26% in 2021....(how can anyone loose money in 2021????) Quote:"None of the top 10 performers from 2021 made the cut. Top performers from that year included Third Point’s Dan Loeb, Pershing Square’s Bill Ackman, and SRS Investment Management’s Karthik Sarma." soooo.... it was just luck guys ha? "He has always been playing with risky investments and ideas that involve a high conviction. Bill Ackman stock holdings occupied by LOW at 21.7% and the lowest by SBUX at 10.1%" High conviction into looser stocks Bill....seriously dough, Owning Starbucks into a worldwide Recession??? ehm fired , so totally fired Ok now back to hard work again, cause hard work is where my performance and my results are coming from. Banks have done extremely well during this downturn! Commerzbank kept rallying the whole time, JPMorgan didnt decline at all
Last years trades of short Euro and short Stocks gave 9% gains plus the other half that was in shortterm Bonds. Pretty lame year but im proud i got those trades right while everyone lost their shit haha ;)
Europe is mostly in Recession Asia is mostly in Recession USA manufactoring and Tech is in Recession Brazil just came out of recession and its not clear yet if they will fall back into recession again, dough stimulus is planned As i said before, i expect the USA Federal Reserve Bank to raise rates in February by 25bps or even 0 and that i see as the pivot, where the FED stops raising rates, we have to observe the 02y yield to see if the market wants higher rates still or not and they are around 4,29% while the effective Fed Funds RAte is at 4.33% https://www.newyorkfed.org/markets/reference-rates/effr So there really is no need to keep raising rates anymore than 0.25bps The markets already expect rate cuts after june and even in Europe inflation has finally peaked, so its just a matter of time until European central banks also can relax about inflation fears. By the way, many many talking heads and finanial analysts keep saying inflation is sticky and isnt going down to 2% again, i call bullshit and say we will see 2% inflation on a 3month annualized basis this year already. And i think Cryptos are sniffing all of this out and will rally for a few months this year And i think Bonds will rally this year, dough bit difficult to time the exact perfect entry So my portfolio for 2023 is Bonds an Bitcoin 85.000 usd in US 02Y Bonds (4.25% price 99.957) https://www.boerse-frankfurt.de/bond/us91282cgd74-united-states-of-america-4-25-22-24 15.000 usd in ETHER Cant be sure when exactly Rates will come down Cant be sure exactly When Crypto will rally But im sure both will happen in 2023 this year so just sit back and wait for gains :) I want to add, this is the hardest year ever to predict what will happen. Thats why this is probably my least risky asset allocation since beginning of this blog..... I think theres still more room to the downside for stocks.
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AuthorPascal |