[Year End Thoughts] My 2020 Outlook.Rather than chasing the US equity bubble up here, I want to gross up when I can (on dips) in Energy, Real Estate, and Gold.
Energy is one of my best idea longs for the beginning of 2020.
- XOM is at 12-year rock bottom prices and will pay you a dividend to wait for the eventual uptick in Oil.
- The Fed is determined to "run inflation hot" even though CPI is already over 2%. We are going to get more inflation.
- Recent presentations by Mike Gordon on Hedgeye: www.youtube.com
- and on MacroVoices: www.youtube.com
- and a BofAML note: pbs.twimg.com
CNQ has already begun severely outperforming the US energy sector. They are a Canadian Oil Sands producer with excellent fundamentals:
Attached to the long Energy thesis is long Russia. Russia is a huge energy producing country and will benefit from increased prices.
Weekly chart of Russia ETF (RSX):
Related, Sberbank:
And Gazprom:
I like real-estate in an inflationary environment. In particular, tech-related Real Estate:
And of course Gold. I expect Gold to continue its bull run soon, within a week or two. However as one of the most manipulated markets, it can be very difficult to trade. I suggest slowly buying physical every time it goes down.
I believe the US stock market would have already collapsed, owing to liquidity problems indicated by the extreme spike in Repo rate to 10%. Had the Fed not begun throwing the kitchen sink at the problem, we would have already seen a deflationary bust. It seems like that money has flown into the S&P and AAPL:
I'm not entirely convinced that this WON'T end in a Venezuelan or Argentina style hyperinflation. So, I think foreign diversification (Russia and Gold) are essential holdings.
