So, the question posed here was what is the market betting on going forward. Lower unemployment? Another rate hike? I'm at the point where I'm really not bothered. Last week the market was back on the AI bubble thing again, this week costs of micron chips are going up 500%, and $NVIDIA(NVDA)$ is to double its production... so it's not a bubble, but probably the waffle of Wall Street will contradict itself again several more times this month. I'm over it!
I'm from a tiny country at the bottom of the world called New Zealand, so I have to hold a world view, compared to an "American" world view. Case and point, the World Series that Americans hold in their country that only includes America. Not trying to be obtrusive here, I was married to a Californian girl for 20 odd years, spent a ton of time in the USA, and not trying to be insulting at all, just making a point that when Americans say "world" they mean America.
But let's circle back to my investment thesis. I don't really care what "the market" is betting on. Because in this context it's not the world market, it's the American market.
Been amused with the whole TACO concept, I guess laughter is the best medicine here, and the TACO index... well the pick below illustrates the insanity perfectly. To be fair, the New Zealand government takes around two months off over the Christmas period, and the economy still carries on regardless. But, let me lay out my thoughts about the world economy going forward for the next two years. Then I will lay out how I have, and will continue to restructure my portfolio to remain resilient.
My biggest concern is geopolitical upheaval. It was truely horrific when Russia invaded their neighbors, and have eyes set on others. Was it not enough that Europe is facing significant turmoil. Now with trump attacks on Iran, all the Arab states have similar issues. I am very disappointed in human nature, we have obviously learned nothing from history.
Time to buy war stocks? Probably yes, but personally I'm not funding this insanity because that would make me a Hippocrate. So instead I'm backing decency, while also limiting my exposure to geopolitical risk.
Let's Get specific. My wheelhouse is infrastructure and the picks and shovels that assist. Mining, oil, gas, electricity, logistics, tec. For a start, history teaches us that wars are lost because the war machine can not longer refuel said machines or the infrastructure.
One example here would be less obvious, it called Canadian heavy crude. Interestingly the tariff's the USA impose are not 50% but 10%. Why? Because A number of the American refineries are set up to explicly refine Canadian heavy crude only. So sorry America, you still have to Eat the tariff, does not cost Canada a cent, it costs the American people at the gas pump. And Canada is signing deals with the EU as I type, so in addition to paying more, you will likely get less.
Oh then there is another thing. Last time I checked, Canada is still part of the commonwealth, as is New Zealand, Australia, obviously the UK and it goes on and on. Anyway I'm ranting.
I'm buying Canadian companies like $Agnico Eagle Mines(AEM)$ $Canadian Natural Resources(CNQ)$ $Wheaton Precious Metals(WPM)$ $Suncor(SU)$ and selling American retailers like snap on Costco, McDonalds...
Also accumulating Aussie stocks like BHP that mine coal, copper, fertilizer, etc. plus still accumulating New Zealand stocks in renewable energy, infrastructure, and logistics.
I could go on but I think mite be enough for this post. As always, my the odds be ever in your favor. EM out
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