No Diving – (Pool)back is Shallow

While many of my indicators are either confirming (or near doing so) a turn lower in many asset prices…..ranging from Copper, Soybeans, Wheat, Corn, Coffee, Australian Dollar (vs USD & JPY) and the S&P 500.

except for Gold (in AUD), Pork (Lean Hogs) and Lumber…..the latter has risen 40% again, over the past 2 weeks.

Albeit I have already positioned portfolios for a decline (by moving to 35% cash and additional index and specific stock put option hedges)……

rather than speculating on the myopic business of ‘shorting’, my guidance is to prepare acquiring securities in sectors which will present attractive risk/reward opportunities.

Some industries to watch include Oil, Gas and Insurance, to name a few.

I’m re-iterating to clients that I am not lacking investment ideas. It’s more of a function of which ones to exclude.

I expect this pullback in equities to be shallow.

Spain’s IBEX and the U.K.’s FTSE 100 have already declined 8% from their January 10th high (a date which coincided with my “Cashing In Your Chips” note.

January 30, 2021

by Rob Zdravevski

rob@karriasset.com.au