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tangman
Dec 21, 2019 6:51 PM

[Year End Thoughts] My 2020 Outlook. Long

SPDR Select Sector Fund - Energy Select SectorArca

Description

Rather than chasing the US equity bubble up here, I want to gross up when I can (on dips) in Energy, Real Estate, and Gold.

Energy is one of my best idea longs for the beginning of 2020.

- XOM is at 12-year rock bottom prices and will pay you a dividend to wait for the eventual uptick in Oil.
- The Fed is determined to "run inflation hot" even though CPI is already over 2%. We are going to get more inflation.
- Recent presentations by Mike Gordon on Hedgeye: youtube.com/watch?v=dhc6vyxVsDs&t=2386s
- and on MacroVoices: youtube.com/watch?v=0Qe4px0oI8g&t=2265s
- and a BofAML note: pbs.twimg.com/media/ELOWZsYWsAA1N-K?format=jpg&name=large

CNQ has already begun severely outperforming the US energy sector. They are a Canadian Oil Sands producer with excellent fundamentals:


Attached to the long Energy thesis is long Russia. Russia is a huge energy producing country and will benefit from increased prices.
Weekly chart of Russia ETF (RSX):


Related, Sberbank:


And Gazprom:


I like real-estate in an inflationary environment. In particular, tech-related Real Estate:


And of course Gold. I expect Gold to continue its bull run soon, within a week or two. However as one of the most manipulated markets, it can be very difficult to trade. I suggest slowly buying physical every time it goes down.


I believe the US stock market would have already collapsed, owing to liquidity problems indicated by the extreme spike in Repo rate to 10%. Had the Fed not begun throwing the kitchen sink at the problem, we would have already seen a deflationary bust. It seems like that money has flown into the S&P and AAPL:



I'm not entirely convinced that this WON'T end in a Venezuelan or Argentina style hyperinflation. So, I think foreign diversification (Russia and Gold) are essential holdings.

Comment

The XOM link up top is broken for some reason.
Here it is:

pbs.twimg.com/media/ELOWZsYWsAA1N-K?format=jpg&name=large

Comment

Ok It doesn't like me posting links weird.

[img]pbs.twimg.com/media/ELOWZsYWsAA1N-K?format=jpg&name=large[/img]

Comment

Last try? May have to just copy & paste

pbs.twimg.com/media/ELOWZsYWsAA1N-K?format=jpg
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