Presentation – Being A Contrarian

I’m sharing a presentation which I spoke to this week.

The topic is contrarianism where I show long-term charts (on a weekly basis) and quantified extreme moments using three measures, being:

– the 200 week moving average

– the Relative Strength Indicator (signalling Overbought and Oversold readings) and 

– Bollinger Bands showing when prices traded to 2.5 standard deviations (either above or below its rolling weekly mean)

I attempted to highlight the case for lower interest rates and inflation (as they are themselves trading at ‘extreme’ levels) by showing a host of correlations and I believe moderation is aided with further mean reversions amongst various prices, while many other commodities have already done so. As reported inflation figures lag, lower readings are expected to appear in the coming 4-10 months.

There is also a series of charts showing recent buying ‘windows’ and where I’m waiting for some others to enter my buying territory.

Towards the end of the presentation I touch on how a scramble to secure supply led to price spikes and parabolic price moves in commodities such as Lumber and Steel, where such parabolas were (and often) followed by sharp declines.

I think there is much finished product still held as inventory, thus tying up working capital and should lead to discounting wars. This will be deflationary and assist in abating inflation and interest rates.

To be clear, I’m calling for interest rates and inflation to abate, not collapse.

September 2, 2022

by Rob Zdravevski

rob@karriasset.com.au