Week 93 Squared

Brokers Statement
Portfolio
Transcript

Squared Conversation

Timestamps
What Happened Last Week – 00:16
What’s Happening Next Week – 6:47

Squared Portfolio Update

Squared Comments

5 Responses

  1. Hello Nick,
    thank you for a great video. I just watched Andy’s interview on Maggie Lake channel here: https://www.youtube.com/watch?v=gJwC2AOoJLg&t=837s where Andy said he was short bonds since September Fed and I was wondering if you discuss positioning together at all, as you specifically advised on TLT to stay put.
    Secondly, Inflation breakevens seem to be moving up since September. Do you see any value in buying TIPS if/after the curve steepens?
    Thank you!

    1. I don’t always agree with him. Sometimes he is right, sometimes I am right. I did not think the market would react this violently but I guess I have seen the light. Happens.
      When we get nearer 2% TIPS would be on my radar for sure.

  2. 1) It is precisely the wrong time for a lot of risk. 2) You would not be surprised to see a bear steepening accompanied by a woosh down in equities. We have a bearish tilt, are under allocated US equities but still net long. What conditions would have to materialize, from upcoming earnings guidance or bond market movements or other developments to strengthen your resolve to turn net short equities?

    1. We will never turn net short, because this is long only. We could go to zero, but that would only happen if:
      1. The economic numbers weaken (unemployment up, retail sales down, GDP forecasts down, etc.)
      2. Curve continues bear steepening because of perception of budget deficit being out of control.
      We really need at least 1. to happen to go to zero allocation in equities. 2. by itself could cause 1., but we are still a long way from there.

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