NAS100 pepperstone [M]update feb-mar 2023
Continuation short, fibs are based off NQs 2200(price) gain back in 2010'
Very, very long timeframe fib retrace in play.
Supporting narratives? capital crunch from boomers exiting capital + deglobalisation pushes due to conflicts based on demographic declines, deglobalisation pushes due to growing reluctance to freely share Intellectual Property or freely secure transportation or cooperate with international maritime laws and standards.
Free capital shortage until millennials reach the production class stage, (large generation to provide capital again)(maybe 10-15 years)
Why I chose to short NQ? being the most speculative and averaging higher than reasonable p/es its safe to assume that capital will exit these asset classes before more productive or illiquid assets could. Less ballsy then shorting Bitcoin, but I think i've found a sweetspot
Tech stocks are quiet literally based on assumed sustained exponential rates of development, while in general investors ignore the luxuries that have provided the tech industries foundations. I.e cheap capital, unhindered outsourcing/subsidisation, and unhindered free trade (subsidised trade).
If you can't secure resources or their transportation
If you can't secure cheap capital indefinity
If you can't secure cooperation with multiple countries and multiple supply chains
Then the system will need to go through a phase of Darwinian re-exploration to re-define efficiency. Its the most logical outcome which will conclude with a period of lower valuations until capital becomes more readily available atleast.
Things to watch?
Nations will be reindustrialising and renationalising because it will be mandatory. Periods of higher inflation will be evident, maybe akin to something more 'natural' without subsidiation abroad. (higher than the past 20 year average). Higher inflation is normal because a. reindustrialisation is the most inflationary stage of economic development because you are quiet literally rebuilding the road.
Redesigning an efficient, self sustaining path will cost in the short term, but in the long term it will create a much more secure environment, that's why i say its darwinian.
BUT, yes all we need to do is wait for the millennials to come into the production stages of their lives (40s-50s) and economic booms should follow (so late 50s earlys 60s will be their wealthiest). It will be the same for their offspring, so capital booms will arise when the millennials reach their early 60s, and when their offspring reaches their early 60s and so on. One thing to note is if we continue down the path of smaller and smaller generations, we could very well be living right now (or the past 5 years) in the most capital rich (relatively) era in recorded history.
Coming from.. well i believe I'm a zoomer right? (24 this year) its quiet daunting to think about, but this play is literally the only 'invest for the long-term' play that I have.
Want to thank Peter Zeihan for his continued works, and for his astute insights on current affairs, and for providing a great outline or general trend on where the world is going in the years to come.
