Time Stamps What Happened Last Week – 00:16 What’s Happening Next Week – 09:28 Nick’s Update – 19:21
5 Responses
Thanks – new to the site. Can someone bring me up to speed on why you guys are so defensive on equities? Is there a brief synopsis explaining why you think equities are going to go down as the curve un-inverts? What are signs that un-inversion has begun in earnest?
I suggest you watch the episode from 5th August. That should explain it pretty well. And the one before that one too, which warns of why. That is when we went max. defensive for the reasons mentioned. Our minimum is 20% allocation to stocks and without that minimum we would have gone to 0%.
As far as curve, that is a classic signal of impending recession. The dilemma is that it is happening as a bear steepener as opposed to a bull steepener, so the signal might not be as reliable. But it is a compound thing: we are bearish for other reasons and this just increases the caution.
I have had since the beginning of your 2GB service allocation in 2 defense funds (ITA and XAR) plus Fidelity Select Energy Fund (FSENX). Do you (Andy and/or Nick) have any feedback on this ones? Is it worth owning them at this point for long term? Thanks for any opinions. I always learn a great deal by your explanations.
If they are part of your overall equity allocation, they are just fine. I think al 3 will at worst keep pace with DIA and SPY and likely even outperform a little over time, from these levels.
5 Responses
Thanks – new to the site. Can someone bring me up to speed on why you guys are so defensive on equities? Is there a brief synopsis explaining why you think equities are going to go down as the curve un-inverts? What are signs that un-inversion has begun in earnest?
I suggest you watch the episode from 5th August. That should explain it pretty well. And the one before that one too, which warns of why. That is when we went max. defensive for the reasons mentioned. Our minimum is 20% allocation to stocks and without that minimum we would have gone to 0%.
As far as curve, that is a classic signal of impending recession. The dilemma is that it is happening as a bear steepener as opposed to a bull steepener, so the signal might not be as reliable. But it is a compound thing: we are bearish for other reasons and this just increases the caution.
Another spectacular episode- thank you gents as always!
I have had since the beginning of your 2GB service allocation in 2 defense funds (ITA and XAR) plus Fidelity Select Energy Fund (FSENX). Do you (Andy and/or Nick) have any feedback on this ones? Is it worth owning them at this point for long term? Thanks for any opinions. I always learn a great deal by your explanations.
If they are part of your overall equity allocation, they are just fine. I think al 3 will at worst keep pace with DIA and SPY and likely even outperform a little over time, from these levels.