Why I reallocated most of my tech and retail to pharma and cash
Updated
Today the market surged higher despite the worst jobless claims data since September 2017 and also despite reports that Trump has no intention of delaying the December 15 tariff deadline. Investors apparently are betting that an eleventh-hour deal will get made before Sunday, but personally I'm not willing to gamble on that.
If the US does impose $150 billion of new tariffs on consumer goods from China, retail companies and tech companies will be disproportionately affected. I shuffled some of my tech and retail shares into weed stock Aurora Cannabis and pharmaceutical companies Amyris and Lannett this morning after seeing some positive headlines about those companies. I also bought small positions in a gold miners fund and an inverse oil fund just for funsies. Those should both gain if no trade deal materializes.
Most of my money is now in cash, however, and I will choose a re-entry once I know what's going on with tariffs. I will definitely miss some profit if a deal gets made, but that's okay. I take safer bets; I don't play Trump roulette.
If the US does impose $150 billion of new tariffs on consumer goods from China, retail companies and tech companies will be disproportionately affected. I shuffled some of my tech and retail shares into weed stock Aurora Cannabis and pharmaceutical companies Amyris and Lannett this morning after seeing some positive headlines about those companies. I also bought small positions in a gold miners fund and an inverse oil fund just for funsies. Those should both gain if no trade deal materializes.
Most of my money is now in cash, however, and I will choose a re-entry once I know what's going on with tariffs. I will definitely miss some profit if a deal gets made, but that's okay. I take safer bets; I don't play Trump roulette.
Note
Well, my exit from the market didn't last very long. XD I got back in when the news broke that the US offered not only to delay new tariffs, but also to repeal half the existing tariffs.Note
I am out of the market again this morning after comments from the Chinese suggesting they're not on board with the deal yet. Until and unless we get confirmation of a deal, we're going to keep getting rejected from this trend line. If the press conference today indicates the Chinese are interested in the deal the US has offered, then we might break through the line. If they signal disinterest, we will fall away from the line. I think I'll just watch what happens and reconsider on Monday. Have a great weekend, everyone!Note
Okay, it appears we have a Phase 1 deal, confirmed by both the US and China. Initial market reaction is underwhelming. It appears the deal will disproportionately affect retail, agriculture, and energy.
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